Landlords need to be aware that rule changes to HMO properties are leading to an increase in the threat of ‘ambulance chaser’ firms targeting landlords David Whittaker, chief executive of Keystone has claimed.
Speaking at FSE Midlands, Whittaker (pictured) warned that HMO landlord clients could be targeted by ‘ambulance chaser’ solicitor firms who are looking for new sector opportunities following the end of the period when PPI claims can be made.
Whittaker said: “Ambulance chasers are moving from PPI to HMOs and they are targeting tenants suggesting that their landlords don’t have the necessary licence and they can take them to court.
“There is big money to be made here and these ambulance chasers are suggesting to tenants they can take landlords for £20-£30k, and they’ll be taking 10% of this.
“This will be bad news for your customers if they don’t know what they’re doing.”
Whittaker outlined how cases have already been brought against HMO landlords including a recent case where four students in Leeds successfully sued their landlord and won £15,000 in reclaimed rent.
He said this was a consequence of landlords not obtaining an HMO licence which means that landlords cannot evict a tenant and tenants can reclaim the rental income they have already paid.
The rules, introduced in October 2018, have left thousands of new properties requiring HMO licences because of the removal of the three-storey rule and the introduction of minimum room sizes.
Whittaker added that councils need to improve their dealings with HMO licence applications.
He said: “Councils need to increase staffing capacity to handle the increase level of licence applications.
“In Kingston-upon-Hull, for example, they have a three-person HMO team; one lady is on maternity, one is on long-term sick, and the head of department is answering the phones. That’s not a good situation to be in.”
Whittaker concluded that many councils had backlogs, whilst others were suggesting it would take a number of months to process the application.