Lisa Simon, Partner and Head of National Residential Lettings, offers a practical view on residential letting issues currently in the news.

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An extension of mandatory House in Multiple Occupation (HMO) licensing will require some landlords to license properties which did not previously require a licence. The new rules (an Amendment to Schedule 4 of the Housing Act 2004) are contained within a Statutory Instrument which comes into effect on 1 October.

Imminent changes

The new regulations:
•    Extend mandatory licensing to HMOs which:
o    Provide living accommodation to more than one household, and at least two households share basic amenities; or the living accommodation is lacking in basic amenities (‘The Standard Test’).
o    Are occupied by five or more people forming more than one household and the flat lacks basic amenities; or more than one household shares basic amenities (‘The Self-Contained Flat Test’).
o    Have been converted and one or more of the units is not a self-contained flat (‘The Converted Building Test’).
•    Introduce national minimum sleeping room sizes:
o    For one person aged over 10 years, not less than 6.51 square metres
o    For two persons aged over 10 years, not less than 10.22 square metres
o    For one person aged under 10 years, not less than 4.64 square metres
o    Any room with a floor area of less than 4.64 square metres must not used as sleeping accommodation
•    Introduce mandatory refuse disposal facilities.

The individual HMO is required to be licensed rather than the building in which the HMO is situated.  Therefore a building which has two flats and each is occupied by five persons living in two or more households requires a two HMO licences.

Exceptions
The exceptions are:
•    Converted blocks of flats (Section 257 HMOs) – however, individual flats within that building will require a licence if they meet ‘The Standard Test’.
•    Purpose-built flats within a block containing three or more self-contained flats.
•    Flats which already have a licence under Additional or Selective Licensing Schemes (though landlords of such properties must apply for a new license when their existing licence expires – see below).

New or potential landlords should note that rules vary across local authorities:  under Part 3 of the Housing Act 2004, some councils require that all privately rented properties be licensed and councils may introduce Additional Licensing Schemes for properties which fall outside the scope of the new rules.

Timing
Landlords and managers of properties affected by the extension to the licence requirement must make an application to the relevant local authority.  Although the roll-out of the new regulations may vary across the country, landlords should assume that the new license will be required by 1 October.  Failure to register for a license where it is required is a criminal offence.

If a property is currently licensed under a mandatory or additional scheme, the existing licence will remain valid until it expires.  Therefore local authorities should only enforce the existing conditions of the licence until its expiration, at which point the new mandatory licensing conditions will apply. Landlords who fall into this category should expect to receive advice from the local authority prior to the expiration of their current licence.

Similarly, the new conditions in relation to room sizes and refuse disposal should be met by 1 October.

Non-compliance

Consequences for landlords and letting agents where licences for licensable properties are not in place include prosecution in the magistrates’ courts, fines under the Housing Act 2004 and civil penalty notices of up to £30,000.  Repeat offenders may also be subject to a banning order prohibiting them from letting properties in future.

The Mayor for London, Sadiq Kahn, developed the Landlord and Agent Checker in cooperation with six London boroughs (Brent, Camden, Kingston, Newham, Southwark and Sutton) and it launched with ten council members in December 2017.  More recently, all 33 London boroughs have signed up to the scheme and we could therefore see this approach adopted elsewhere in the UK.

The Landlord and Agent Checker is an online tool which enables potential tenants to find out about any housing offences relating to landlords or letting / managing agents. Its secondary function is to share information among local authorities to assist in bringing about enforcement action against rogue landlords who operate in more than one borough. Records of fines and successful prosecutions are submitted by the participating local authorities. In addition, information is supplied by the London Fire Brigade, the Property Redress Scheme and the Property Ombudsman.

The database contains information about landlords who have been successfully prosecuted or fined by a London council; successfully prosecuted or given a prohibition notice by the London Fire Brigade, or expelled from a mandatory consumer redress scheme. Information remains visible on the database for 12 months but records will be retained confidentially by the GLA for anything up to ten years.

The following information can be viewed by tenants:
•    The full name of landlord or agent
•    The partial address of the landlord
•    The offence committed
•    The action taken, including any fines
•    The authority which took the enforcement action
•    The address of the property.

So how does the system work? Initially, a rogue landlord or agent is reported using the GLA’s online database. The information required includes the landlord’s details, the property address and the nature of the complaint along with any supporting evidence. The enforcement authority then decides whether representations will be accepted. Landlords and agents are notified by the GLA of their proposed inclusion on the database and given the opportunity to make a representation to have their details removed. If they are listed because convicted but were later successful in appealing against the conviction, they should contact the GLA as soon as possible to have their details removed.  Similarly landlords believing the information held to be wrong must make a representation in writing with supporting evidence.

The initiative has been welcomed by agents, through some have voiced concerns that it falls short of tackling the causes of the problem; that rouge landlords will simply continue to operate under the radar, and that tenants could use the tool in a vindictive and inappropriate manner. However, landlords are not listed until they are found to be at fault and tenants’ comments do not appear on the register.

In addition to the London scheme, the Government has recently launched a separate rogue landlord database although it is currently only available in a selection of local authorities (more information here).

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Lisa Simon
MARLA
Partner - Head of Residential Division
0207 518 3234 email me about Lisa
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Lisa Simon heads up our Residential Division, which includes sales, new homes, lettings and property management across our National network. She joined Carter Jonas in 2011. Her twenty years plus experience has been largely in London and the Home Counties working with Landlords and Tenants. Lisa oversees the day to day running of our residential branches and acts as a key contact for some of our portfolio clients. She also runs our corporate services department liaising and promoting our properties to companies and their relocation agents. Lisa resides in West London with her husband and two daughters.

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