Consultation on the Extension of Mandatory Licensing for HMOs

The Department for Communities and Local Government (DCLG) has released its latest consultation paper on Houses in Multiple Occupation and residential property licensing reforms. Chapter 1 of the paper explains proposals to extend mandatory licensing of Houses in Multiple Occupation following the Government’s technical discussion paper published in November 2015.

Current requirements for Mandatory Licensing

The Government proposes to extend the definition on mandatory licensing from 2017, subject to Parliamentary approval. The definition of a mandatory licensable HMOs is set out in Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 (SI 2006/371). The requirements state that any property which:

• comprises of 3 or more storeys; and
• has 5 or more occupiers living in 2 or more single households; and
• contains shared facilities such as a kitchen, bathroom or toilet must be licenced.

This definition must not be confused with the definition of a HMO under s254 Housing Act 2004, which covers many more properties.

Extension of Mandatory Licensing

The Proposals seek to remove the “3 or more storeys” requirement so that any HMO with 5 or more occupiers, regardless of how many floors, will fall within the scope of mandatory licensing. Some local authorities already operate similar schemes through additional licensing schemes. For example, the London Borough of Southwark operates a borough wide additional licensing scheme which requires all HMOs which do not fall within the remit of the mandatory licensing scheme to be licensed.  These additional schemes will fall by the wayside and be subsumed into mandatory licensing. Those already licensing under such schemes will continue to have licences under the new extended mandatory licensing regime.

In addition, the Government intends to extend mandatory licensing to flats which are occupied by five or more persons living in 2 or more households if:

• it is in a converted building;
• where part of a building is used for commercial or other non-residential purposes.

The intention of the expansion is to ensure that flats in multiple occupation, or other HMOs, fall within the remit of mandatory licensing is if the residential premises is above commercial premises but not if:

• the flat is in a purpose built block comprising entirely of self-contained flats; or
• where the flat is in a block which contains commercial premises, but also comprises three or more purpose built flats.

It is estimated that the current proposals will make an additional 174,000 HMOs subject to mandatory licensing.

If the proposals are brought into force then there will be a six month grace period for landlords to comply with the new requirements.

Failure to obtain the correct licence after the end of the grace period would allow the local authority to initiate criminal proceedings with unlimited fines imposed on those found guilty of an offence and the possibility of rent repayment orders being made. Once the new Housing and Planning Act comes into full effect in early 2017 this would also allow for fixed penalty notices of up to £30,000 to be made as well.

The consultation period is open until 13 December 2016.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*