Licence to rent

The team at Woodstock has recently been alerted to another case where a landlord was fined more than £58,000 for allowing tenants to occupy a 16 bedsits in Southport without a HMO licence. The building had a leaky roof, faulty fire alarms, blocked escape routes and a fire door that had been locked shut.

A spokesperson for the Council said “We want to send a clear message to the small number of landlords who compromise the safety of their tenants that this is not acceptable and can end up in a court case. As proved today, large fines will be imposed by the courts and we will always act to protect our residents.”

Given the substantial penalties for letting a property without a licence its important to remind ourselves exactly when a licence is required.

The first step is to look at the definition of HMO:

An HMO is a property occupied by three or more people comprising two or more households who share facilities (such as a kitchen and bathroom) and occupy the property as their only or main residence. The occupiers satisfy the ‘one household’ test if they are all members of the same family, including people who are married or living together and people in same-sex relationships.

However, not all HMOs require a licence. Let’s look at the licensing schemes in England:

Mandatory licensing:

You need a mandatory HMO licence if your property meets the standard test, self-contained flat test or converted building test HMO definition in section 254 of the Housing Act 2004 and is occupied by five or more people. In other words, you need a licence for any house or flat that is occupied by five or more people who are not all related and live in the property as their main home.

Since 1 October 2018, the requirement for at least 3 or more storeys in height has been removed. Therefore, far more landlords are caught within the mandatory licensing provisions.

Selective licensing:

Council’s can designate certain areas to be subject to selective licensing if the area is deemed to be one of anti social behaviour. It applies to all private rented properties and does not specifically relate to HMOs. The Council will usually have a map on their website showing which areas require a licence.

Additional licensing:

Additional licensing applies to certain HMOs that fall outside the scope of the mandatory HMO licensing scheme .

If there is any doubt whether a licence is required, we strongly urge you to contact the Council for clarification. Landlords operating a HMO that should be licenced without a licence are liable for an unlimited fine. The tenant can also apply for a rent repayment order and a landlord is prevented from issuing a section 21 Notice.

If you have any questions on HMO and licensing then please feel free to contact us and one of the team will be happy to help.