HMO and Residential Property Licensing Reform

Nikka Sulton

HMO and Residential Property Licensing Reform

Commencing October 1, 2018, mandatory licensing for Houses in Multiple Occupation (HMOs) expands to include previously exempt buildings. This regulatory update necessitates landlords to ensure that bedrooms meet specific size criteria, and tenants adhere to local waste disposal regulations.

HMOs play a pivotal role in addressing the diverse housing needs of students, young professionals, migrant workers, and vulnerable members of society. Recognizing this, the government aims to protect residents from unscrupulous landlords seeking profit at the expense of suitable accommodation for tenants. The focus extends to two-story houses or flats, originally designed for families but increasingly used for HMOs, raising concerns about overcrowding.

In addition to individual housing situations, the government acknowledges the broader impact of HMOs on local communities. Insufficient rubbish storage has led to concerns such as increased vermin presence, prompting the government to address these issues to ensure the overall well-being and safety of the community.

Effective from October 1, 2018, two key regulations come into force concerning Houses in Multiple Occupation (HMOs): “The Prescribed Description Order” and “The Mandatory Conditions Regulations.”

It is crucial for landlords renting private property to comprehend these licensing reforms and their ensuing responsibilities post the mentioned date.

Who and what is affected?

In essence, the Housing Act 2004, Part 2, mandated local housing authorities to license HMOs meeting specific criteria. Initially, this applied to three-storey properties with five or more people from two or more households. The new Prescribed Description Order expands this to include one or two-storey buildings accommodating five or more people from separate households sharing amenities.

Flats passing the self-contained flat test will also need licensing, unless purpose-built. Registration is required for properties meeting the converted building test, indicating conversion since the original construction, regardless of containing self-contained flats. A converted building is one where living accommodation has been created post the original construction, encompassing not only typical bed-sit conversions but also cases where only part of a family house has been converted.

Exemptions:

The recent extension of HMO licensing requirements brings more properties into its scope. However, existing exemptions outlined in Schedule 14 of the Housing Act 2004 persist, providing relief for landlords. Notably, buildings managed or controlled by a body registered as a social landlord under Part 1 of the Housing Act 1996 or categorized as social housing under Part 2 of the Housing and Regeneration Act 2008 remain exempt from HMO classification, alleviating the need for an HMO license.

New Mandatory License Conditions

Amendments to the Housing Act 2004 grant local housing authorities the authority to impose specific conditions on licensed HMOs concerning their management, use, and occupation. These mandatory conditions, as outlined in Schedule 4 of the Housing Act, cover elements such as smoke and carbon monoxide alarms, gas safety, and the safety of electrical appliances and furniture.

Effective from 1 October 2018, the Mandatory Condition Regulations introduce waste disposal provision requirements and mandatory national minimum sleeping room sizes. Landlords must adhere to the council’s waste disposal scheme as a mandatory condition, with non-compliance constituting a breach of the license terms and resulting in a criminal offense.

The prescribed minimum sleeping room sizes include 6.51 m² for one person over 10 years old, 10.22 m² for two persons over 10 years old, and 4.64 m² for one child under 10 years old. Rooms below 4.64 m² cannot be utilized for sleeping, and landlords are required to inform the local housing authority of such rooms. Violating these sizes may lead to unlimited fines or a financial penalty of up to £30,000 without prosecution.

While local housing authorities possess discretion to establish higher standards within license conditions, they lack the authority to establish lower standards.

Transitional provisions

Landlords of HMOs falling within the new definition must apply for a license or temporary exemption by October 1, 2018, to avoid committing a criminal offense. The Prescribed Description Order and Mandatory Conditions offer transitional provisions, allowing existing licenses to remain valid with conditions applicable until expiration.

The extended mandatory conditions, including minimum sleeping room sizes and waste disposal requirements, come into effect upon license renewal. Non-compliance prompts a notification from the local housing authority, specifying conditions and providing up to 18 months for compliance. The new licensing regime aims to enhance health and safety standards and curb landlords offering subpar accommodation for increased profit, requiring all landlords to understand and adhere to the new requirements and obligations.

What are the extended mandatory HMO licensing requirements?

In April 2018, Parliament approved secondary legislation reshaping the mandatory HMO licensing regime. The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 broadens the scope of section 55(2)(a) of the Housing Act 2004, now applying mandatory HMO licensing to properties with less than 3 storeys.

The Prescribed Description Order 2018 also addresses the passporting of licenses from additional and selective licensing schemes into the mandatory licensing regime. This process is detailed further in chapter 2. Another significant development is the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, amending Schedule 4 of the Act. These regulations introduce new conditions for licenses granted under Part 2, including mandatory national minimum sleeping room sizes and waste disposal provision requirements.

The occupation requirement

The Prescribed Description Order 2018 maintains the occupation requirement unchanged. To fall under mandatory licensing, the HMO (or Flat in Multiple Occupation) still needs to be occupied by 5 or more individuals from 2 or more separate households.

Additional HMO licensing

The local housing authority can designate an area for additional HMO licensing if they believe certain HMOs (like section 257 HMOs or purpose-built flats in blocks with three or more self-contained flats) require licensing beyond the mandatory scope. This designation follows the statutory requirements outlined in Part 2.

Implementation

Landlords should be aware that the Prescribed Description Order 2018 takes effect from October 1, 2018. This allows time for preparation and obtaining a licence. Failing to apply for a licence or temporary exemption by this date could result in criminal charges for landlords of HMOs falling under the new definition.

The Mandatory Conditions Regulations 2018 include transitional provisions, detailed in Paragraph 2.6, to facilitate compliance with the new rules within a specified timeframe.

Local housing authorities, as per Section 55(5) of the Act, are obligated to effectively implement mandatory licensing in their districts. They must actively promote licensing, process applications before October 1, 2018, and ensure timely determination of all licence applications. Planning permission should ideally precede licence issuance, and local authorities must ascertain that there are no relevant housing conditions functions under Part 1 of the Housing Act 2004 concerning HMOs for which they have received a licence application.