**BEWARE if your house is let to 3 or more unrelated tenants - YOUR HOUSE WILL BE A HMO!

Mar 30th 2010

USE CLASSES ORDER

You will be aware that the Government has been working on amending the Use Classes Order (UCO) so that any landlord looking to change the use of a house from a private dwelling to a HMO (three or more unrelated individuals) will require planning permission. The UCO has now been amended to allow this to happen and the new legislation will take effect from April 6th 2010.

After April 6th 2010, if you rent a house or flat which was previously occupied by a single person or a family, to a group of three or more unrelated individuals, you may need planning permission.  You will need planning permission if the new changed use is such to amount to a 'material change of use'. How these new rules will be interpreted and applied is far from certain and remains to be seen.

The law will not be retrospective so if on April 6th the house is occupied or if vacant last occupied by a group of unrelated individuals, you will not have to apply for planning permission.

The new law is intended to apply where there is a change of use of a house or flat (which has been previously been occupied by a family whether it is owner occupied or rented) to shared use between three and six unrelated individuals. It only applies where the new use of the house or flat is a shared use by unrelated individuals who are not members of the same family/relatives. This can include lettings by owner/occupiers of their own homes involving three or more individuals who are living with them. The new rules do not apply to the social sector (ie. lettings of Council houses or properties rented out by Registered Social Landlords). For planning consent to be needed there must be a material change of use. Use by more than six tenants may have needed planning permission under the old rule. This will continue to be the same and this also applies to the social sector as well as the private sector.

WARNING - Under the new rules there is an automatic right to change the use of a shared house or flat (occupied between three and six unrelated individuals) back to a single dwelling occupied by a family or a single person. This can be done without planning permission. 

However, there is no corresponding automatic right to change the use back from a single dwelling to a shared house or flat without specific planning permission. This applies even though there was an established right for the shared use of the house or flat because it was used as such on April 6th 2010 (or even if you subsequently obtain planning permission for the shared use). There is therefore a risk that your house or flat could be worth less because it has lost the attached rights it enjoys for shared use.

If you are in the process of renovating a property that was not a HMO before April 6th 2010 and you are intending to use it as a HMO after April 6th 2010 we suggest that you rent your property to a group of three or more unrelated individuals before that date otherwise you may need planning permission.