CIL exemption revoked due to lodgers

[k dawg]

I completed a self build and after 6 months of living in it decided that I wanted to get lodgers in my house due to the cost of living crisis, I had applied for a cil exemption as this is my main residence but have been told my exemption has been removed as i had changed it to a hmo. I've now got 28 days til my cil bill will arrive. Note I live in said residence and have 3 lodgers. What can I do, is there any way to fight back or convince council otherwise.

 

[nod]

I probably wouldn’t have informed the authorities about the lodgers Unless they are claiming housing benefit then you had no choice 

I’d move them out quickly and hope they show a bit of compassion 

[SteamyTea]

I don't think you will get very far with this, only thing worth looking at is the legal definition that the LA uses for "lodgers".

I got caught out on a similar thing and my LA (Cornwall) uses the term 'Boarder' (well we are a surfing area).  They claimed that it is all explained in the Housing Act.

As it was, they had made a mistake and I got my cash back (was when I was a student and except council tax, but my lodger was not, so they claimed the full amount not the 75%) by putting up the lodgers rent.  Took 7 years though.

 

This may seem harsh, but the CIL is there to pay for local infrastructure caused by an increase in local population, the 'self build' exception is a bit of a political fop and probably comes about as councils are meant to offer a number of plots for self builders.

[newhome]

You are allowed up to 2 lodgers before a property is classed as an HMO. Unfortunately as you have taken in 3 lodgers you have unknowingly created an HMO in your house and have thus breached the self build exemption. 
 

https://www.gov.uk/rent-room-in-your-home/houses-in-multiple-occupation#:~:text=Your property may be classed,to more than 2 people.

 

Be warned that there are many other regulations that govern an HMO that they might now come after you for! 

[Mr Punter]

38 minutes ago, newhome said:

Unfortunately as you have taken in 3 lodgers you have unknowingly created an HMO in your house and have thus breached the self build exemption. 

 

That is interesting as the OP did not take in the lodgers until 6 months after moving in.  Any idea how long they would have needed to wait before letting to avoid liability?

[newhome]

53 minutes ago, Mr Punter said:

 

That is interesting as the OP did not take in the lodgers until 6 months after moving in.  Any idea how long they would have needed to wait before letting to avoid liability?

3 years after completion. You can lose the exemption any time during the 3 years via selling the property, letting it out, not using as main residence etc. 

[Temp]

I think I would read the wording of the CIL regs carefully and perhaps appeal. As I recall it requires you to remain in occupation but I don't remember it saying anything specifically about changes to the status of the property. I might be wrong but I'm away from my PC and can't look it up right now.

 

 

[Temp]

 I will assume you filed the completion paperwork within 6 months and you still live in it.

 

I've had a look at the regulations here.. 54A &D..

 

https://www.legislation.gov.uk/uksi/2014/385/regulation/7/made

 

 

 

Quote

 

Withdrawal of the exemption for self-build housing

54D.—(1) This regulation applies if an exemption for self-build housing is granted and a disqualifying event occurs before the end of the clawback period.

(2) For the purposes of this regulation, a disqualifying event is—

(a)any change in relation to the self-build housing or self-build communal development which is the subject of the exemption such that it ceases to be self-build housing or self-build communal development;

(b)a failure to comply with regulation 54C;

(c)the letting out of a whole dwelling or building that is self-build housing or self-build communal development;

(d)the sale of the self-build housing; or

(e)the sale of the self-build communal development

 

I don't think b,c,d or e applies so we only need consider a?

 

Quote

 

Exemption for self-build housing

 

54A.—(1) Subject to paragraphs (10) and (11), a person (P) is eligible for an exemption from liability to pay CIL in respect of a chargeable development, or part of a chargeable development, if it comprises self-build housing or self-build communal development.

 

(2) Self-build housing is a dwelling built by P (including where built following a commission by P) and occupied by P as P’s sole or main residence.

Snip

 

 

Para 10 and 11 are irrelevant.

 

There is nothing specifically about HMO that I can see. Eg I don't see why it becoming an HMO means it's not also still a qualifying self build. 

 

My guess is they are arguing its no longer a self build covered by 54A(2) because its not all occupied by you. However 54D(c) appears to allow you to let out part of the building just not the whole building.

 

I think I would find yourself a solicitor familiar with the CIL exemption and run this past them pronto.

 

 

 

 

 

Edited March 25, 2024 by Temp

[Alan Ambrose]

@Temp - nice find.

[ProDave]

This is NOT a HMO.  That requires planning permission and licencing to let rooms to multiple people.

 

Letting a room or 2 in your own house to a lodger does not and you are still using it as your main residence.

[k dawg]

7 hours ago, Mr Punter said:

 

That is interesting as the OP did not take in the lodgers until 6 months after moving in.  Any idea how long they would have needed to wait before letting to avoid liability?

I'm thinking 3 years, this is truly a nonsense.  Next time i build I will make sure I leave all 4 rooms empty whilst people beg for housing.

[k dawg]

2 hours ago, Temp said:

 I will assume you filed the completion paperwork within 6 months and you still live in it.

 

I've had a look at the regulations here.. 54A &D..

 

https://www.legislation.gov.uk/uksi/2014/385/regulation/7/made

 

 

 

I don't think b,c,d or e applies so we only need consider a?

 

 

Para 10 and 11 are irrelevant.

 

There is nothing specifically about HMO that I can see. Eg I don't see why it becoming an HMO means it's not also still a qualifying self build. 

 

My guess is they are arguing its no longer a self build covered by 54A(2) because its not all occupied by you. However 54D(c) appears to allow you to let out part of the building just not the whole building.

 

I think I would find yourself a solicitor familiar with the CIL exemption and run this past them pronto.

 

 

 

 

 

It's funny I interpretated the law the same way you did,  but I'm biased.

[k dawg]

Just now, k dawg said:

It's funny I interpretated the law the same way you did,  but I'm biased. Yes I submitted the required paperwork as required

 

[Alan Ambrose]

>>> I think I would find yourself a solicitor familiar with the CIL exemption and run this past them pronto.

 

+1

 

I think the CIL people just try it on sometimes. Mine sent a wacky 'CIL liability' notice to me, the guy that originally owned the land, and almost certainly the guy in between.

 

This is for a design that will never be built by me and cannot be built by the previous landowners .... because they don't own the land now, duh

 

I'm sure the LPA's 'Total CIL Liability Collectable' is a very impressive number. Garbage, of course, but there you go - the CIL people are doing a great job

Edited March 26, 2024 by Alan Ambrose