Legal advice for Kent parents of students

Legal advice for Kent parents of students

Our house

If you are tempted to buy your student son or daughter a house while they are at university and collect the rent from lodgers, you need to be aware of the legal and financial implications

Eagle-eyed readers may remember an article written by my partner, Robert Coombe on this very topic two years ago.

The example given was some friends who had a daughter at Exeter University who were planning to buy a property. The proposal was that their daughter and probably three friends would share the house and the friends would pay rent.

They would each have their own bedroom (although another person could be squeezed into another room if necessary) and they would share the kitchen, bathroom, living room, etc.

The answer to the question Is there anything from a legal perspective that we should be aware of? was Yes, quite a lot actually.

The proposed arrangements are potentially subject to both licensing and planning requirements as the house will be a house in multiple occupation (HMO).

They do not constitute a single household and although they may only occupy the house for part of the year (and live at home with their parents for the remainder), they are treated as occupying it as their only or main residence.

This is particularly important as it is a criminal offence to manage or have control of an HMO which should be licensed, but is not.

It is compulsory to licence any HMO that is three or more storeys and is occupied by five or more people. Some Councils require smaller HMOs to be licensed and this should be checked.

It will, of course, be a question of fact as to how many storeys the building is and how many people are sharing and this would need to be considered.

Moving on to the planning requirements, it will be classified as a house in multiple occupation under Use Class C4.

If the house has previously been used as a single dwelling, then they will need planning permission to change it to an HMO.

Rather perversely, once their daughter has finished university, if she decides to carry on living there on her own, or with a partner/husband, then she will not need planning permission to revert back to Class C3 as a dwelling house.

It would, of course, be possible to buy the house in her sole name as she could then be an owner/occupier and take in two full-time lodgers without planning permission but, perhaps, unsurprisingly, they were not sure they wanted to let her have total control over such a valuable asset just yet!

The friends decided to go ahead and buy but if they were to ask the same question now there would be additional issues to consider:

Even though you may be letting to friends, a proper tenancy agreement should be signed and a deposit taken. That deposit must be protected through a recognised scheme.

If the property is subject to a mortgage, you may need the consent of your mortgage provider before you can let out the property and they may impose conditions.

Changes have been suggested by the government to give local authorities more flexibility to charge full rates of Council Tax for second-home owners.

If the daughter and her friends plan to watch or record television programmes, whether online or on a TV or even on a laptop, it is likely that each of them will need their own television licence.

The rent paid by the tenants will be treated as income and taxed accordingly.

So, having told them the pitfalls, the answer to the question is it a good idea? would be the classic lawyers response: Maybe

VICKY STOODLEY

Vicky Stoodley is Head of Planning at Whitehead Monckton and joined the firm as a partner in 2012. She trained in London and subsequently has been an associate and partner at two prominent Kent law firms. Vicky was admitted in 1988 and advises on all aspects of planning law. For more advice, email: vickystoodley@whitehead-monckton.co.uk