A landlord who believed he had secured an ideal tenant was threatened with significant financial penalties after his four-bedroom property was secretly converted into an unlicensed House in Multiple Occupation (HMO). The tenant had initially stated the house was for himself and his family.
The tenancy agreement prohibited subletting and stated the house was for a single household. However, the tenant converted reception rooms into bedrooms, fitted locks on doors, and offered individual rooms to unrelated occupiers. The tenant collected rent from these occupiers and handled repairs, appearing to them as the landlord.
The arrangement came to light after the local authority investigated the property. Officers discovered several unrelated individuals renting separate rooms and identified the tenant as their landlord. The council began investigating possible offences related to an unlicensed HMO and breaches of management regulations, including the owner as a potential party managing or controlling the HMO.
The property-owning company obtained professional advice and argued that it was neither managing nor controlling the HMO, and had a reasonable excuse as it was unaware of the tenant's actions. The council subsequently cancelled the proposed financial penalties.