Certificate of Lawful Development

Certificate of what?  You may say.  Wasn’t that a Certificate of Lawful Use?  I thought it was. Well, it’s referred to as either, or something similar, even by the local council.

And why am I rambling on about this?  About a year and a half into property, a lot of scatter gun approach (as between us, we can do anything) and two refurbishments later, we decided to choose a high yield property strategy.  Some amount of eeny meeny mini moe later, trying to choose between serviced accommodation (we did want to buy a hotel in 2022) and HMOs, in November 2023, after we sold our flip, we finally chose HMOs (shared houses, Houses in Multiple Occupation, for those, who were wondering).

In January we suitably hit the ground running, viewed a bunch of properties fitting our plans, we offered on one and thought we were on a winner.  We might still be, but my word, it is not straight forward.  As it’s our first one, every step is a learning curve.  Which is fine.  But when others put spanners into the works, that makes it a little difficult. 

Anyhow, we embarked on this aforementioned, long learning curve.  As with everything, it doesn’t matter how much people tell you about ‘it’, you only learn when you experience it.  So, this post is solely about the CoLED.  After some careful consideration (and way too many conversations with mortgage brokers….) we finally applied for a bridge to let mortgage in late March.  Among the 6-page enquiries from the Lender’s Solicitor, one was asking for proof of HMO use.  My solicitor told me what we need a legal proof and in due course, he requested it from the Vendor’s solicitor, who bluntly refused it. 

I, clever clog, thought, it’ll be alright, let’s not delay, we can apply for it after purchase!!!  But as I mentioned this to more and more people in my network, EVERYONE advised against it, and everyone came up with pretty good reasons.  Some two months down the line, waiting for the valuer to stop messing us around (that story is for another blog…), we were ready to exchange contracts, but this piece of information was still missing.  The Vendor gathered some information due to my encouragement, but my Solicitor kept saying we can’t get the lending without it.  In the meantime, I even started getting quotes from Planning Consultants, just to get it done, until I came across this on Plymouth City Council’s website:

“Certificate of Lawful Use / Existing Development

Where planning permission has not been obtained, or cannot be evidenced, you can submit an application for this certificate. These may be needed when selling or mortgaging a property.”

Interpreting ‘you’ as ‘the owner’, the penny finally dropped that it is really the owner, who needs to get it in place prior to sale. 

Interestingly, since being in the middle of this palaver with the certificate, conversations with others also purchasing HMOs, or buildings that will be perfect HMOs, have had similar issues, where they are assisting the owner to get the Certificate in place prior to completing on the purchase, as the Lender is requesting it. 

The moral of the story?  It is shocking how underinformed people are.  HMO owners, Estate Agents selling HMOs and indeed, Solicitors acting for a Vendor.  There are still too many people involved with HMOs, who don’t recognise that planning and licencing are two separate issues and having a licence in itself doesn’t prove the property was USED as an HMO.  And yes, the Vendor’s Solicitor was technically right, legally the Vendor doesn’t have to provide a Certificate of Lawful Use, but if the Lender’s Solicitor is asking for it, and without it they won’t approve the mortgage for the Buyer, then there is no purchase. 

Or at least that’s how I understand it now.

Thank you for reading. 

All the best,

Ildiko