An Extension to HMO Licensing
Date of Article
Oct 10 2018
Residential services

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@ Lisa Simon
Lisa Simon
Partner, Head of Residential
020 7518 3234 Email me About Lisa
Lisa Simon heads up our Residential Division, which includes sales, new homes, BTR, lettings and property management across our national network. She joined Carter Jonas in 2011 and has over thirty years' experience largely in London and the Home Counties working with Landlords and Tenants. Lisa oversees the day to day running of our residential offices and acts as a key contact for our Christies International Real Estate Affiliates and some of our lettings portfolio clients. She also oversees our corporate services department liaising and promoting our properties to companies and their relocation agents.

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.

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.

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.

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.