Student Property
Discussion
I hope someone with relevant knowledge might be able to help on this one. Apologies if long winded but need to provide a bit of background
I have a client who owns a hotel, I have turned some of his other hotels into student houses, everybody happy, run really well, however he has one property that is in an embargo zone known locally as "Article 4 Area". Essentially it means unless its a newbuild or has history prior to Dec 2010 as an HMO, no HMO use will be permitted by the Council.
The planners have resisited all applications to turn hotels to HMO within the Article 4 area.
It strikes me that when DSS put people long term into a B&B hotel they occupy the building in a similar way to that which students could. The operational side doesn't worry me, communal space available, use of kitchen not a problem; if we absolutely have to in order to "be a hotel", providing breakfast is possible.
So Finally here is the question:..........
Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
I accept there will be some other downsides to operating in this way, such as having to pay rates as I doubt the student exemption to Council Tax can be used. Alas so many new Premier Inn type operations are either just open or in build that the £60 per night family run hotels are struggling and not really a saleable proposition.
Many Thanks in advance
I have a client who owns a hotel, I have turned some of his other hotels into student houses, everybody happy, run really well, however he has one property that is in an embargo zone known locally as "Article 4 Area". Essentially it means unless its a newbuild or has history prior to Dec 2010 as an HMO, no HMO use will be permitted by the Council.
The planners have resisited all applications to turn hotels to HMO within the Article 4 area.
It strikes me that when DSS put people long term into a B&B hotel they occupy the building in a similar way to that which students could. The operational side doesn't worry me, communal space available, use of kitchen not a problem; if we absolutely have to in order to "be a hotel", providing breakfast is possible.
So Finally here is the question:..........
Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
I accept there will be some other downsides to operating in this way, such as having to pay rates as I doubt the student exemption to Council Tax can be used. Alas so many new Premier Inn type operations are either just open or in build that the £60 per night family run hotels are struggling and not really a saleable proposition.
Many Thanks in advance
If you are running a business don't you think that you should pay for professional advice? Seeking business freebies from a car forum seems a tad cheesy, and in any event what if you get some advice, it turns out to be wrong, and following the advice costs your business a lot of money? Professional adviser fees are tax deductible if incurred for the purpose of the business. Don't be so cheap!
surveyor said:
BV is right.
Although it sounds awfully like you are trying to give 48 weeks tenancy without giving 48 weeks tenancy...
Absolutely want to give 48 weeks tenancy, feel a bit sorry for my client who has been trying to sell this hotel so that he can retire as he is now 71. Due to the influx of Premier Inn type hotels, although it makes a profit, no buyers for it. It cannot be turned into residential, similar buildings 200m away have been turned into student houses but due to a line on a map this is not possible.Although it sounds awfully like you are trying to give 48 weeks tenancy without giving 48 weeks tenancy...
I would just like to be able to go to my client and suggest to him there may be an option and to speak to his lawyer about it. I don't want to have him incur cost if its an absolute non starter hence asking the question. Thought there may be a way of ensuring a student tenant has security for a term that suits them.
I'm not sure how you client wanting to sell his hotel has any bearing on whether he is able to operate it as a HMO. If he is wanting to sell a Hotel, having the place full of Students on the basis of some dodgy AST based unsecured income isn't going to improve its attractiveness to a purchaser, in fact it's probably the polar opposite.
Should have said, as he cannot sell it , having students in it will provide enough income to keep the place going, allowing him to keep it.
The lack of hotel buyers has made them almost unsellable, another recent one had been for sale for £600,000 for 2 years as a hotel, when I got him an HMO licence I had multiple offers at £675,000 as a student house; its now bringing in £62,000 per annum, with no cost of staff etc
The lack of hotel buyers has made them almost unsellable, another recent one had been for sale for £600,000 for 2 years as a hotel, when I got him an HMO licence I had multiple offers at £675,000 as a student house; its now bringing in £62,000 per annum, with no cost of staff etc
Rangeroverover said:
I hope someone with relevant knowledge might be able to help on this one. Apologies if long winded but need to provide a bit of background
I have a client who owns a hotel, I have turned some of his other hotels into student houses, everybody happy, run really well, however he has one property that is in an embargo zone known locally as "Article 4 Area". Essentially it means unless its a newbuild or has history prior to Dec 2010 as an HMO, no HMO use will be permitted by the Council.
The planners have resisited all applications to turn hotels to HMO within the Article 4 area.
It strikes me that when DSS put people long term into a B&B hotel they occupy the building in a similar way to that which students could. The operational side doesn't worry me, communal space available, use of kitchen not a problem; if we absolutely have to in order to "be a hotel", providing breakfast is possible.
So Finally here is the question:..........
Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
I accept there will be some other downsides to operating in this way, such as having to pay rates as I doubt the student exemption to Council Tax can be used. Alas so many new Premier Inn type operations are either just open or in build that the £60 per night family run hotels are struggling and not really a saleable proposition.
Many Thanks in advance
What about running it as serviced apartments? I seem to recall that you'd remain within the same use class that way (C1), so no planning issues.I have a client who owns a hotel, I have turned some of his other hotels into student houses, everybody happy, run really well, however he has one property that is in an embargo zone known locally as "Article 4 Area". Essentially it means unless its a newbuild or has history prior to Dec 2010 as an HMO, no HMO use will be permitted by the Council.
The planners have resisited all applications to turn hotels to HMO within the Article 4 area.
It strikes me that when DSS put people long term into a B&B hotel they occupy the building in a similar way to that which students could. The operational side doesn't worry me, communal space available, use of kitchen not a problem; if we absolutely have to in order to "be a hotel", providing breakfast is possible.
So Finally here is the question:..........
Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
I accept there will be some other downsides to operating in this way, such as having to pay rates as I doubt the student exemption to Council Tax can be used. Alas so many new Premier Inn type operations are either just open or in build that the £60 per night family run hotels are struggling and not really a saleable proposition.
Many Thanks in advance
You'd need to actually be offering service obviously, because if you aren't the LA will see through you.
The contract would be different, because you would be creating a licence not a tenancy. The difference between the two basically hinges upon whether the occupier has exclusive possession of the accommodation. With a tenancy they do, with a licence they don't.
Contractually, I can don't see a problem particularly. The students would book a room for 48 weeks and pay monthly / quarterly / in full for the stay. Cleaning and laundry services would be included probably.
I develop a lot of large scale student accommodation so have some understanding of the processes involved.
I'm not convinced 13m's advice will work, not least because of BV's astute comments about there generally being rules against obvious sham arrangements.
Also, don't confuse a HMO license with a planning permission. The council is using planning powers to control the issuing of HMO licenses, but it's not the planners who issue licenses as I'm sure you know.
C1 is quite specific in its definitions and that includes limiting the length of any 'rents' to hotel type lengths. Good luck arguing a contrived duck/chicken structure further down the line. Not just from a planning point of view, but also from a when it burns down and somebody dies point of view as well.
Of course you only require an HMO license if the 'property' is an HMO. If it were a block of flats (C3 use) then the flats could be let to whomever as long as the individual flats were only occupied by a single household (student/couple). You will fall foul of HMO requirements if you have cluster flat arrangements where say several students share a common kitchen. A block of student studio flats does not require an HMO (as long as you hit certain criteria such as having individual addresses for example), a block of student cluster flats does.
You can move a C3 to a C4 (HMO) use under PD rights, however I suspect that the Article 4 you mention restricts this.
I'm not convinced 13m's advice will work, not least because of BV's astute comments about there generally being rules against obvious sham arrangements.
Also, don't confuse a HMO license with a planning permission. The council is using planning powers to control the issuing of HMO licenses, but it's not the planners who issue licenses as I'm sure you know.
C1 is quite specific in its definitions and that includes limiting the length of any 'rents' to hotel type lengths. Good luck arguing a contrived duck/chicken structure further down the line. Not just from a planning point of view, but also from a when it burns down and somebody dies point of view as well.
Of course you only require an HMO license if the 'property' is an HMO. If it were a block of flats (C3 use) then the flats could be let to whomever as long as the individual flats were only occupied by a single household (student/couple). You will fall foul of HMO requirements if you have cluster flat arrangements where say several students share a common kitchen. A block of student studio flats does not require an HMO (as long as you hit certain criteria such as having individual addresses for example), a block of student cluster flats does.
You can move a C3 to a C4 (HMO) use under PD rights, however I suspect that the Article 4 you mention restricts this.
Breadvan72 said:
That sounds like a Street v Mountford dodge.
Why would you say that?If the OP is:
1. Genuinely providing accommodation that is serviced.
2. The occupier does not have exclusive possession (lift and shift, right of access by staff for cleaning and bed changing without notice)
3. The occupier has a different permanent address (Mum and Dad's house).
That's a licence I suggest.
ben5575 said:
I develop a lot of large scale student accommodation so have some understanding of the processes involved.
I'm not convinced 13m's advice will work, not least because of BV's astute comments about there generally being rules against obvious sham arrangements.
Also, don't confuse a HMO license with a planning permission. The council is using planning powers to control the issuing of HMO licenses, but it's not the planners who issue licenses as I'm sure you know.
C1 is quite specific in its definitions and that includes limiting the length of any 'rents' to hotel type lengths. Good luck arguing a contrived duck/chicken structure further down the line. Not just from a planning point of view, but also from a when it burns down and somebody dies point of view as well.
Of course you only require an HMO license if the 'property' is an HMO. If it were a block of flats (C3 use) then the flats could be let to whomever as long as the individual flats were only occupied by a single household (student/couple). You will fall foul of HMO requirements if you have cluster flat arrangements where say several students share a common kitchen. A block of student studio flats does not require an HMO (as long as you hit certain criteria such as having individual addresses for example), a block of student cluster flats does.
You can move a C3 to a C4 (HMO) use under PD rights, however I suspect that the Article 4 you mention restricts this.
Thank youI'm not convinced 13m's advice will work, not least because of BV's astute comments about there generally being rules against obvious sham arrangements.
Also, don't confuse a HMO license with a planning permission. The council is using planning powers to control the issuing of HMO licenses, but it's not the planners who issue licenses as I'm sure you know.
C1 is quite specific in its definitions and that includes limiting the length of any 'rents' to hotel type lengths. Good luck arguing a contrived duck/chicken structure further down the line. Not just from a planning point of view, but also from a when it burns down and somebody dies point of view as well.
Of course you only require an HMO license if the 'property' is an HMO. If it were a block of flats (C3 use) then the flats could be let to whomever as long as the individual flats were only occupied by a single household (student/couple). You will fall foul of HMO requirements if you have cluster flat arrangements where say several students share a common kitchen. A block of student studio flats does not require an HMO (as long as you hit certain criteria such as having individual addresses for example), a block of student cluster flats does.
You can move a C3 to a C4 (HMO) use under PD rights, however I suspect that the Article 4 you mention restricts this.
It seems the local Council are so unjoined up that they will happily grant an "HMO Licence" for any property that ticks the correct boxes for how many smoke alarms, sinks, kitchen facilities etc.
Many property owners think that because they have an HMO licence from the council (environmental health dept) that all is well. I try and explain gently that unless they have change of use from Planning they might get away with operating, as enforcement seems to be zero but will not be able sell the property as an HMO/student house and strictly speaking are operating illegaly
This one has 18 en suite bedrooms, there would be two communal kitchens and three reception rooms, as a student house it would bring in £130 per week per room for 48 weeks.
We manage about 300 student spaces ranging from newbuild studios and cluster flats to converted terraced houses and flats. The owner of this hotel is over 70 and wants to retire, with alot of discounting and staff cuts it turns a small profit. Currently there are quite a few premier inn type developments in build locally so the pressure will only increase..........so who would like to buy a hotel in an increasingly competitive environment thats also in a listed building....not many.
I'm hoping that if the student rooms are "serviced" by cleaners and linen changes etc to be occupied by tenants sharing the building/facilities. Could this be enough to make it possible to grant each student a licence rather than an AST.
13m said:
Breadvan72 said:
That sounds like a Street v Mountford dodge.
Why would you say that?If the OP is:
1. Genuinely providing accommodation that is serviced.
2. The occupier does not have exclusive possession (lift and shift, right of access by staff for cleaning and bed changing without notice)
3. The occupier has a different permanent address (Mum and Dad's house).
That's a licence I suggest.
Serviced accommodation does not mean that it is not a tenancy. Also the hotel owner will need to ask himself the question whether there is a market for student accommodation of that type as serviced apartments usually command a higher rent than ASTs because the associated costs have to be covered. If lift and shift doesn't actually happen in practice (even students might not be willing to be regularly shunted from room to room) the courts are likely to see it through it as a sham.
HMO is a distraction imo because that is primarily about safety and the landlord's responsibilities. I don't believe that in itself it is determinative of whether the occupants are tenants or licencees.
The nub of the matter is below.
Rangeroverover said:
So Finally here is the question:..........
Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
Proper professional advice will be needed to answer this question. I am no expert in such matters but as it looks like wanting to have the cake and eat it as well. I suspect the answer will be no.Normally students sign a 48 week AST, obviously if legally we are still an hotel no AST possible. Is there an instrument we can use to commit them to 48 weeks while also giving them 48 weeks security, that is not an AST and will not undermine "hotel status" and gives us a security/damage deposit.
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