HMO Licensing
HMO licensing.
The 2004 Housing Act 2004 introduced licensing of some HMOs. So making sure you know at what point a licence is needed and what needs to be done is critical. This has been created as a general guide to licensing. Local authorities are also able to licence other types of HMOs as a way of dealing with problems that may occur in these types of properties and or restricting the amount of them in one area.
Licensing is intended to make sure of the following.
A landlord is a fit and proper person (or employs a manager who is).
The standard of management of the property is adequate.
In the case of HMO licensing, each HMO is suitable for occupation by the number of people allowed under the licence.
As of 1st October, 2018 mandatory licensing applies to HMO’s which
Occupied by 5 or more persons, living in two or more households.
The people occupying the property share some facilities e.g. kitchen, bathroom or WC.
Source: National Landlords Association
Other HMO’s may also require a licence as a result of a local authority scheme.
Applying for a licence.
If you own or manage a licensable HMO then you have to apply to the local authority for a licence.
The local authority must give a licence if it is satisfied that the
The proposed licence holder is a fit and proper person or that the proposed manager, if there is one, is fit and proper.
The proposed licence holder is the most appropriate person to hold the licence.
The proposed management arrangements are satisfactory, the person involved in the management of the HMO is competent.
In the case of HMO licensing, the HMO must be reasonably suitable for occupation by the number of people allowed under the licence, or capable of being made suitable. This will require the local authority to look at the amenities that are available and the number of people who are sharing those amenities. There are national minimum amenity standards but local authorities can apply their own higher standards if they wish.
An HMO licence application must list the maximum number of people that the landlord wishes to house in the property. The licence may be granted for that number of people or for a different number, depending on how many the property is suitable for.
Licence conditions, cost and duration
Licences are generally granted for a maximum period of 5 years however in some places the local authority may impose a shorter period for example to regularise planning status.
The local authority usually charges a fee to cover the administration cost, however, this and the amount will differ depending on the authority. These fees must be charged in two parts, Part 1 for the administration of determining the application, Part 2 to cover the enforcement after a licence has been granted.
A licence will be granted with conditions attached. The following conditions must apply to every licence:
A valid current gas safety record, which is renewed annually, must be provided (for properties that have a gas supply)
A requirement that the landlord keeps any electrical appliances and furniture that he provides in a safe condition and gives a declaration to the local authority, on request, of that safe condition.
A requirement that the landlord installs smoke alarms and keeps them in proper working order and gives a declaration to the local authority, on request, of that safe condition.
Each occupier must have a written statement of the terms on which they occupy the property. This may be but does not have to be, a tenancy agreement.
If the licence is a selective licence then it must also include the condition that the landlord will ask for references from potential tenants.
If the licence is for an HMO it will specify the maximum number of people who may live in the property.
The local authority may also apply other conditions of their own. These may include, but are not limited to, any of the following:
Restrictions or prohibitions on the use of parts of the HMO by occupants
Requirement on the licence holder to take appropriate action to deal with the behaviour of occupants or visitors
Ensuring the condition of the property, its contents, such as furniture and all facilities and amenities (e.g. bathroom and toilets) are in good working order and to carry out specified works or repairs within certain time limits
A requirement that the licence holder attends an approved training course in relation to any approved code of practice.
If the landlord does not agree with the additional conditions that the local authority has decided to attach to the licence he has the right to appeal against them to the First-Tier Tribunal (Property Chamber).
Source: National Landlords Association.
It is very important to read the licence and all the details thoroughly as there is only a 14 day period in which to make representation to your local Council before they issue the final licence. After the final licence is issued a landlord may appeal to the First-Tier Tribunal.
It is a criminal offence to operate an HMO without a licence and also to fail to comply with the conditions. Fines can be up to £30,000 per offence
Changing circumstances: varying or revoking a licence
While a licence is active the property or the associated management situation may change. An example could be an extension being built which would increase the size of the property and would potentially enable another person to live in the property compared to the current licence.
Also, the landlord or manager could be convicted of an offence, this could impact on them by not being a fit and proper person and reconsider the decision to grant the licence.
If the local authority wishes to alter or revoke the licence they must consult with the licence holder and others with an interest in the property before making a final decision. At this stage, there is no requirement to consult the tenants of the property.
Once the authority has made a decision it is open to the licence holder or anyone else with interest in the property to appeal in the decision if they disagree. If a variation on the licence has been made then the council is not permitted to charge an additional fee for this.
Sale of a licensed property
A licence is not transferable, If the owner of a licensed property wishes to sell, then the new owner must apply for a new licence if the property is still a type which is in need of one (not changed from its pre-sale condition) A licence can not be altered to change the name of the licence holder from old to new.