Licensing of Houses in Multiple Occupation

Information about the licensing of houses in multiple occupation.

The Housing Act 2004

The Licensing of Houses in Multiple Occupation

The Act introduces the licensing of Houses in Multiple Occupation (HMOs). It will be  compulsory for the local authority to license the larger, higher-risk HMOs.

Why do HMOs have to be licensed?

Larger HMO’s, such as bedsits and shared houses, often have poorer physical and management standards than other privately rented properties. The people who live in HMOs are amongst the most vulnerable and disadvantaged members of society. As  HMOs are the only housing option for many people, the government recognises that it is vital that they are properly regulated.

Licensing is intended to make sure that:

• Landlords of HMOs are fit and proper people, or employ managers who are.
• Each HMO is suitable for occupation by the number of people allowed under the
  licence.
• The standard of management of the HMO is adequate.
• High risk HMOs can be identified and targeted for improvement.

Where landlords refuse to meet these criteria the Council can intervene and manage the property so that:

• Vulnerable tenants can be protected.
• HMO’s are not overcrowded.
• Council’s can identify and support landlords, especially with regeneration and
  tackling antisocial behaviour.

Do all HMO’s have to be licensed?

No. Only those that are:

• 3 or more storeys high,
• have five or more people in more than one household, and
• share amenities such as bathrooms, toilets and cooking facilities.

Please note that licensing only applies to HMOs where rents or other considerations are payable.

The Act does make discretionary provisions for the local authority to introduce other forms of licensing of rented properties

How will it work?

Anyone who owns or manages a HMO that must be licensed has to apply to the
Council for a licence. The Council must give a licence if it is satisfied that the:

• HMO is reasonably suitable for occupation by the number of people allowed under the licence.
• Proposed licence holder is a fit and proper person.
• Proposed licence holder is the most appropriate person to hold the licence.
• Proposed manager, if there is one, is fit and proper.
• Proposed management arrangement are satisfactory, the person involved in the management of the HMO is competent and the financial structures for the
  management are suitable.

What does a ‘fit and proper person’ mean?

The Council will carry out checks to make sure that the person applying for the licence is a fit and proper person. In deciding whether someone is fit and proper the Council must take into account:

• Any previous convictions relating to violence, sexual offences, drugs and fraud.
• Whether the proposed licence holder has broken any laws relating to housing or landlord and tenant issues.
• Whether the person has been found guilty of unlawful discrimination.
• Whether the person has previously managed HMOs that have broken any approved code of practice.

What is in a licence?

The licence will specify the maximum number of people who may live in the HMO. It will also include the following conditions, which apply to every licence:A valid current gas safety certificate, which is renewed annually, must be provided.

• Proof that all electrical appliances and furniture are kept in a safe condition.
• Proof that all smoke alarms are correctly positioned and installed.
• Each occupier must have a written statement of the terms on which they occupy
  the property, for example, a tenancy agreement.

Councils may also apply the following conditions:

• Restrictions or prohibitions on the use of parts of the HMO by occupants.
• The landlord or manager must take steps to deal with the behaviour of occupants or visitors.
• To ensure that the condition of the property, its contents, such as furniture and all facilities and amenities, bathroom and toilets for example, are in good working
  order.
• To carry out specified works or repairs within a particular time frame.
• A requirement that the responsible person attends an approved training course.

How long will it last?

A licence will normally last for a maximum of five years, although it can be for a shorter period.

How much will it cost?

Landlords will have to pay a fee to cover the administration costs of the licence
procedure. This will vary depending on the amount of time and resources that are
needed to satisfy all the licensing conditions.

Can the Council refuse to licence my property?

Yes, if the property does not meet the conditions set out above and/or the landlord or
manager is not a fit and proper person.

What will happen then?

If a landlord fails to bring a HMO up to the required standard, or fails to meet the fit and proper person criteria, the Council can issue an Interim Management Order (IMO), which allows it to step in and manage the property. The owner keeps their rights as an owner. This order can last for a year until suitable permanent management arrangement can be made. If the IMO expires and there has been no improvement, then the Council can issue a Final Management Order. This can last up to five years and can be renewed.

Can I appeal?

You may appeal if the Council decides to:

• Refuse a licence.
• Grant a licence with conditions.
• Revoke a licence.
• Vary a licence.
• Refuse to vary a licence.

You must appeal to the Residential Property Tribunal, normally within 28 days.

Temporary exemption from licensing

If the landlord or person in control of the property intends to stop operating as a HMO or reduce the numbers of occupants and can give clear evidence of this, then she or he can apply for a Temporary Exemption Notice. This lasts for a maximum of three months and ensures that a property in the process of being converted from a HMO does not need to be licensed. If the situation is not resolved, then a second Temporary Exemption Notice can be issued. When this runs out the property must be licensed, become subject to an Interim Management Order, or cease to be an HMO.

Are there any other penalties?

It is an offence if the landlord or person in control of the property:

• Fails to apply for a licence for a licensable property, or
• Allows and property to be occupied by more people than are permitted under the licence.
• A fine of up to £20,000 may be imposed. In addition, breaking any of the licence
  conditions can result in fines of up to £5,000.

Rent Repayment Orders

A tenant living in a property that should have been licensed, but was not, can apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of 12 months). Councils can also reclaim any housing benefit that has been paid during the time the property was without a licence.

If you need further information please contact us

HOUSING SERVICES
Fylde Borough Council
Town Hall
Lytham St.Anne's
Lancashire
FY8 1LW

Tel 01253 658658
Email housing@fylde.gov.uk