The Housing Act 2004 introduced licensing for houses in multiple occupation (HMOs).
Definition of a House in Multiple Occupation
A HMO is a building or part of a building (e.g. a flat):
- in which more than one household shares an amenity (or the building lacks an amenity) such as a bathroom, toilet or cooking facilities or
- which is a converted building that does not entirely comprise self contained flats (whether or not there is also a sharing, or lack, of amenities or:
- which is comprised entirely of converted self contained flats and where the standard of conversion does not meet the minimum that is required by the 1991 Building Regulations, and more than one third of the flats are occupied under short tenancies.
The Residence Test
For a building to be classed as a HMO it must also be occupied by more than one household as their only or main residence.
A household consists of either a single person or members of the same family who are living together. This includes:
- people who are married or living together
- people in same sex relationships
- relatives who are living together e.g. parents, grandparents, children, step-children, uncles, aunts, nephews, nieces, cousins and foster children
- certain live-in domestic staff such as au pairs, nannies, nurses or other carers
Exemptions to the HMO definition
Buildings that are exempt from the HMO definition include:
- those occupied by the resident landlord and a maximum of two other persons who are not part of his/her household; and
- those occupied by no more than two persons
Licensing of HMOs
Under the Housing Act 2004 there are two types of HMO licensing, mandatory licensing and additional licensing.
Licensing is mandatory for all HMOs which have three or more storeys and are occupied by five or more persons forming two or more households.
Councils have discretionary powers to extend licensing to other categories of HMO which are not subject to mandatory licensing. This is known as additional HMO licensing. Before designating an area to be subject to additional licensing, a local council must consider that a significant proportion of HMOs in that area are causing problems for tenants or the neighbourhood due to poor management. The use of this power will also be subject to consultation with those who would be affected by the designation, and approval from Government. Once an additional licensing designation has come into force it is a requirement that HMOs that are subject to it are licensed.
Applying for a Licence for an HMO
An application form can be obtained form the local council responsible for the area that the HMO is in.
The Act requires that various relevant persons (who have an interest in the HMO) be notified and the council are to be notified of those persons details.
The relevant persons are:
- the owner of the HMO
- the future licence holder
- the mortgagee
- any person who is a long leaseholder
- the proposed managing agent (if any)
- any person who has agreed to be bound by the conditions of the licence.
A Licence normally lasts for five years and will need to be renewed before the end of that period. A local council can shorten that time period if they feel it necessary.
A non-refundable fee is payable to the council and each council sets its own fees.
Granting a Licence for a HMO
The council must look at the following factors:
- the suitability of the HMO for the number of occupiers
- the suitability of the facilities within the HMO, such as toilets, bathrooms and cooking facilities
- the suitability of the landlord and/or the managing agent to manage the HMO (This is called the "fit and proper" test and is mainly concerned with whether the landlord or manager has any relevant convictions or has acted in a way that would indicate his or her unsuitability to manage this type of residential accommodation.); and
- the general suitability of managing arrangements.
The Council must be satisfied that the Licence holder is the most appropriate person to hold the Licence and that they are fit and proper.
Licence conditions for a HMO
When a Licence is granted it will have mandatory conditions attached which will require the Licence holder to:
- produce an annual gas safety certificate
- keep electrical appliances and furniture supplied by the landlord in a safe condition and to supply declarations of their safety to the local council on demand
- install smoke alarms and keep them in proper working order and to supply to the local council, on demand, a declaration of their positioning and condition; and
- give the occupiers a statement of the terms on which they occupy the HMO.
The council may also specify conditions such as those relating to the facilities in the HMO, its condition and the management of the building, including how the Licence holder deals with the behaviour of occupiers.
When an HMO Licence is refused
If the council refuses to grant a Licence, they will try to solve the issues with Licence holder or managing agent. If nothing can be worked out and a Licence is still refused, an appeal can be made to a Residential Property Tribunal.
If a council refuses a Licence they must make an interim management order which will enable it to take over management of the HMO. They can do so for a maximum of 12 months. If at the end of the 12 months a Licence still cannot be granted, the council must make a final management order. The final order puts in place long-term management by the council for the HMO, which can last a maximum of five years. When a final order ends, either a Licence can be granted or the council makes a new final management order.
For more information regarding HMO law please contact Don Peel, Head of Litigation and Partner, on 0115 9888 777 or email email@example.com