Property Guardianship falls foul of HMO rules

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Property Guardians:

A property guardian is somebody who lives in a property
which would otherwise be vacant in order to secure it, and in particular to
protect the property against unauthorised occupiers such as squatters.

In recent years several companies have sprung-up offering
guardianship services to owners of properties, most commonly vacant commercial properties,
and these services have been very well received by property owners.

In the round the guardianship proposition seems a win-win
situation: the property owner enlists the services of a property guardian
company to secure an empty property. This works out far less expensive than
employing 24/7 traditional security services; and for those property “guardians�
who live in the property, they do so at much less than the average cost of
living in the private rented sector.

However, the guardianship companies have increasingly come
up against the residential letting regulations with regard to occupier safety
and security of tenure.

For example, Shelter, the homelessness charity have claimed
that the license (or guardianship agreement) commonly used by these companies often
contain terms that may be unenforceable when considered under the principles of
the housing, landlord and tenant, and consumer law.

Likewise, some local authorities have taken guardianship
companies to task over HMO regulations, arguing that any temporary guardianship
letting must meet the exacting safety standards required of a standard HMO. This
of course is difficult and may be expensive to achieve in say a factory or
office building, and when the letting may be only temporary, may put the
project into the realms of non-viability.

In the matter of security of tenure and safety, the government has offered guidance by way of advice on guardianship agreements – Property guardians: a fact sheet for current and potential property guardians – see here

But perhaps more worrying for guardianship companies is the pursuit
of these companies over the licensing HMO regulations. Colchester Borough
Council has prosecuted Camelot Guardian Management Company Ltd (Camelot Europe)
for failing to licence an HMO and for multiple breaches of HMO management
regulations. On 28 March, Camelot pleaded guilty to 15 charges.

As well as the failure of Camelot to apply for an HMO licence
for a former care home operated by Camelot having up to 30 guardians living in.
A local authority inspection found that there was a faulty fire alarm system,
blocked fire escapes and sealed doors. In addition, guardians only had one
kitchen and the shared bathrooms lacked hot water, charges to which Camelot
also pleaded guilty. They have yet to be sentenced to determine the levels of
fines likely in these situations, but in theory they can be unlimited.

It also transpires that a number of the former guardian
occupants of the property had already brought applications for Rent Repayment
Orders arguing that the property being an unlicensed HMO was illegally let. These
claims had been settled out of court by Camelot before the hearing at the FTT.

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