Section 257 HMO fees participation

SrSanguche

Hello everyone,

My wife and I recently bought our first flat in a 3-story Victorian house, and it happens to be a Section 257 HMO, notably because it is less than two-thirds owner occupied.

We are living in our flat, and have been participating in all the HMO fees so far (which are actually quite a lot). We are however starting to feel like it isn't very fair, given the fact that we are not renting our flat out, are not getting any benefit from this, and wouldn't have to pay such fees if any of the two other owners stopped renting their flat. I recently spoke with the council who confirmed we didn't have to match the HMO regulations in our flat if we were not renting it, which leads to the question: why would we have to participate in having the building match those regulations in that case?

Does anyone know if this is a receivable argument and if the fees could be shared between the landlords rather than between the owners (meaning we would pay again in the future if we decided to rent it out)?

Many thanks,

Camille 

eddddy

The bottom line is... If you don't believe your Service Charge is reasonable (because of HMO related charges), you can challenge it at a tribunal, and let the tribunal decide.

It would be a matter of putting together an argument - based on your lease, and based on the legislation - for why you are not liable for HMO related charges.  (I haven't come across any previous Tribunal cases which seem to directly address this question.)



Examples of the issues are:

• The legislation doesn't specifically mention HMO related charges (It doesn't go into that level of detail)

• I've seen tribunal decisions where Freeholders haven't been allowed to charge leaseholders for improvements - only repairs of what already exists.

• So is installing a fire alarm system in order to meet HMO regs (when no alarm existed when the lease was granted) an improvement?

• But does the lease say that the freeholder must comply with statutory notices? Does installing a fire alarm count as complying with a statutory notice?

• But if a tribunal decides that the cost of a fire alarm system (and other HMO costs) isn't recoverable under the terms of the lease as it stands, the freeholder will probably ask the tribunal for a statutory lease variation - to make future costs recoverable

• At that point I guess you could ask the tribunal to order that the lease variation takes account of those flats that are rented out, and those that are owner occupied

• (But that would be difficult to calculate - as flats might start/stop being rented out at any time during a Service Charge year. Or might be empty for 1 month in the year etc.)

I guess one approach is to just take a punt and pay the £100 Tribunal application fee with a simple statement of why you think your Service Charge is unreasonable - and see what the tribunal says.

SrSanguche

Thanks a lot for your help, much appreciated! I'll reflect on this and see what we can/want to do and whether it's worth the trouble, but that's very helpful. 

Thanks again!