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Judges Rule Council’s HMO Licence Fees Unlawful

by guildy | 22 Aug 2018 | Houses in Multiple Occupation (HMO) (England), Houses in Multiple Occupation (HMO) (Wales), Licensing of Private Rented Properties (England), Licensing of Private Rented Properties (Wales), News | 5 comments

Judges rule council’s HMO licence fees unlawful

Landlords may be overpaying shared house licensing fees and could claim hundreds of pounds in refunds from local councils, according to a ruling from the High Court.

The shock decision came from a legal challenge by landlord Peter Gaskin, who refused to pay £1,799 house in multiple occupation licensing costs imposed by Richmond Council, London.

Gaskin rents out rooms in several properties, including a shared house in Richmond.

When he applied to renew his licence, the council demanded a fee that included a charge for running the council’s HMO licensing scheme and a payment for processing his application.

Gaskin agreed to pay the processing fee but refused to hand over the additional cost. The council prosecuted him for renting out rooms in an HMO without a licence.

Gaskin challenged the decision with a judicial review in the High Court.

There, three judges agreed the fee breached European Union rules as Gaskin provided a service under the EU Directive 2006/123/EC (the Services Directive).

The directive orders that the council could only charge an application fee for the licence and could not levy a payment towards the general management of the borough’s HMO licensing scheme.

“The court held that Gaskin, in purchasing, converting, extending the property, in managing it himself rather than using letting agents and in carrying out tasks such as arranging for insurance and maintenance work, was engaged in a self-employed economic activity provided for remuneration,” said lawyer Alexander Campbell, of Field Court Chambers, who was part of Gaskin’s legal team.

The decision means Richmond Council’s HMO licensing fee is unlawful because the charge was not limited to the cost of processing the licence application.

The High Court ruling could impact fees charged to HMO landlords across the country if they included any amount above the cost of processing the licence application. It’s likely (if not a certainty) that Richmond Council will appeal the decision.

Read the full case details (Peter Gaskin v LB Richmond Upon Thames [2018] EWHC 1996 (Admin))

5 Comments

  1. Gordon Hesp
    Gordon Hesp on 29/08/2018 at 9:06 am

    At last another individual who is brave enough to make a stand against the constant greedy government and local authorities who see our profession as a cash cow to be dipped into at will to fund their own coffers Well done Peter and I hope their anticipated appeal fails also

    It is also a sad indictment of our profession that I am the only one who has so far commented and congratulated Peter Gaskin on his successful win over Richmond council while the rest of you who have read this have stayed silent

    Could it be that you are now all just accepting whatever is thrown at us no matter how unfair or draconian it is and are now used being led around like sheep to the slaughter

    Wake up people fight back and take a leaf out of Peter Gaskin’s book I know I am doing that on a smaller scale and have had some success through grit and determination and would like to see other more brave people follow

    Remember the majority of you people out there are benefiting from the successes of people like Peter Gaskin while you sit there and do nothing

  2. ned smale
    ned smale on 15/09/2018 at 5:01 pm

    Well done to Peter Gaskin ,as Gordon Hemp commented where are all the other landlords who possibly stand to gain from this decision? Are they just accepting of what this desperate grabbing Government impose on them? Iam questioning how these charges were generated here with Cornwall County Council. And why the scheme was not rolled out across the country with the same charge for all. ie Cornwall County £999, Plymouth Council £680, how is that justified? Stand up for your rights landlords !!!! No surrender !!!

  3. A.khateeb
    A.khateeb on 17/09/2018 at 10:34 am

    What about the councils that are now requiring properties that are not an HMO to be licenced and charging similar fees.

  4. Jacky
    Jacky on 27/09/2018 at 2:28 pm

    Why are all London council charging different fees, Government should set same fees for all council in London. Many council web sites hide the fees, it is not a straight forward search! Same format for applications, there all different, why.
    Many councils declare an area is run down just to label a property as Selective Licencing and get a £540.00 fee for each flat.

    I get so cross and I don’t even own the property, just an admin assistant, I would go out and fight if they where my properties.

  5. Eddy Jawed
    Eddy Jawed on 01/10/2018 at 1:14 am

    Why are these councils constantly attacking HMO’s? Don’t they understand that HMO’s are actually not that profitable once you take the expenses and hassle of constantly replacing tenants into account. The HMO licence fees are not only extortionate, but there are the other expenses associated with them. For example I pay nearly £200 a year for fire safety tests, another £150 for gas a PAT electrical safety tests. The licence itself is £200 a year. Then we pay for tenant ads, time and money spent on viewings, extra maintenance and upkeep of the property regularly abused by people not taking responsibility. I have a friend who brought two standard normal lets for the price of my massive HMO. He has vetted tenants paying for years, no hassle, they look after it too and surprise surprise, no council breathing down his neck. Just one gas safety every year and constant rent with no gaps.

    I’m now desperately trying to sell my HMO. What a shame I guess lots of freelance workers and students out there will struggle to find accommodation as more landlords like me finish up. The stupidity of the local councils and this main Tory government holds no bounds. Too much hassle now renting HMO’s and a very bad business to be in.

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