Nottingham City Council v Parr: Supreme Court considers HMO suitability and students

Can a local authority impose a licence condition restricting occupation of a house in multiple occupation (HMO) to a particular class of occupant? The Supreme Court considered this question in the recent case of Nottingham City Council (Appellant) v Parr and another (Respondents) [2018] UKSC 51. The Supreme Court dismissed the local authority’s appeal and held that it was lawful for a licence condition to limit occupation to students in full-time education.

This decision will interest HMO landlords especially those involved with student lettings. It confirms that the ‘mode of occupation’ is relevant to determining the suitability of a HMO for a particular number of persons. The decision is important even in light of recent HMO reforms and the introduction of mandatory minimum room size licence conditions. While these conditions prohibit the use of smaller rooms that fall below the fixed minimum size, a holistic assessment will still be required when determining the property’s overall suitability. This may require a consideration of not only the HMO’s physical layout but also the way in which it is occupied.

Background to Decision

The landlord, Trevor Parr Associates Ltd, owned two HMOs in Nottingham which were let to students. Both properties contained attics which had been converted into bedrooms. Due to the attics’ sloping ceilings the usable floor area in the bedrooms was below the size deemed appropriate by the local authority. Nottingham granted the landlord HMO licences for the properties but included licence conditions prohibiting the use of the attic rooms as sleeping accommodation until the useable floor area was increased to 8sqm with a minimum ceiling height of 1.53m.

The landlord successfully challenged the licence conditions in the First-tier Tribunal. The Tribunal found that the rooms provided adequate space for study/bedrooms and there were sufficient compensating features in the rest of the property to make them suitable for ‘student or similar cohesive occupation.’ The Tribunal directed that the licence should contain an alternative condition allowing the use of the attic bedrooms by a person engaged in full-time education for a maximum of 10 months in a year (this condition was subsequently applied to both properties by the Upper Tribunal).

Nottingham’s appeal to the Upper Tribunal was dismissed. The Deputy President, Martin Rodger QC, stated that it was lawful for a licence condition to restrict the use of sleeping accommodation in part of a HMO to a person in full-time education. He recognised that space standards could be modified to reflect different ‘modes of occupation’ as different categories of occupiers used accommodation in different ways. The licence condition could therefore be tailored to these different modes of occupation making the property suitable for a greater number of persons. The licence did not need to account for all potential occupants. In this case, the cohesive nature of the students’ occupancy meant that the HMO, when looked at as a whole, was reasonably suitable for the number of persons sought by the landlord.

The Court of Appeal upheld the Upper Tribunal’s decision confirming that a licence condition could refer to the ‘general characteristics and activities of an occupier’ and there was nothing unlawful restricting occupation to a class of persons, for example, students. However, the Court of Appeal decided to vary the licences to include further conditions requiring the communal areas to be kept as communal space and prohibiting any of the bedrooms at the property from being let to persons other than full-time students.

Supreme Court Appeal

Nottingham appealed to the Supreme Court who had to consider two issues:

1. Whether local authorities could impose licence conditions limiting the class of persons for whom the HMO is suitable; and
2. Whether the conditions imposed by the lower courts were irrational and unenforceable.

Nottingham argued that the Housing Act 2004 did not allow exceptions to be made for full-time students. The law was concerned with the number of persons who could occupy the HMO and not who these persons were and their characteristics. By making exceptions for students, this particular group could be forced to accept lower standards, thus defeating the purpose of the legislation which was designed to improve living conditions in HMO accommodation.

The Supreme Court considered the relevant provisions of the 2004 Act. The legislation states that when deciding whether or not to grant a licence the local authority must consider whether “the house is reasonably suitable for occupation by not more than the maximum number of households or persons or that it can be made so suitable by the imposition of conditions”. The licence may include conditions that the local authority considers appropriate for regulating “the management, use and occupation of the house concerned, and its condition and contents.” Those conditions may include “conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it.”

The Supreme Court decided that conditions could be imposed limiting the class of persons for whom the HMO was suitable. The Court found that the inclusion of the term ‘occupation’ in addition to ‘use’ extended the scope of the condition to give the local authority power to regulate how and by whom the property was occupied. Considering the proposed mode of occupation when determining the HMO’s suitability was entirely appropriate and permissible under the 2004 Act and this did not mean that certain groups of occupiers would have to accept lower standards.

In response to Nottingham’s argument that the conditions were irrational and unenforceable, the Supreme Court was satisfied that the condition limiting occupation to students was sufficiently precise to achieve the object of restricting occupation to those living together cohesively. However, the Supreme Court did agree that the 10-month time limit was irrational and deleted this requirement.

Why is this decision important?

It is often argued that when deciding whether an HMO is reasonably suitable for a particular number of persons, the local authority should take into account how the HMO is occupied. For example, is it occupied by a cohesive group such as students sharing communal facilities or is it occupied by individuals on a room-by-room basis without any sharing of amenities.

The Supreme Court has now confirmed that such conditions regulating mode of occupation are lawful. This decision dealt with students and is most likely to be relevant in the context of student house-shares but the reasoning in the decision could be applied to other classes of occupiers such as young professionals. The decision illustrates that a flexible approach is required by local authorities. HMOs are occupied in many different ways and a one-size-fits-all approach does not always work. That does not mean that students should be forced to accept lower standards but that certain properties may be more suitable for a particular way of living than others.

What about the new mandatory licence conditions regulating room size?

On 1 October 2018 the regulations introducing national minimum room size conditions came into force. They apply to any new HMO licence granted on or after 1 October 2018 including renewals. The HMO licence will require any room used as sleeping accommodation to comply with certain minimum standards, for example, a single room for a person over 10 years old must not be less than 6.51sqm.

Had these conditions been brought into force earlier then the Parr appeal may not have reached the Supreme Court, but the decision is not rendered academic by the new regulations. While the introduction of minimum room size conditions provides clarity on what rooms are now absolutely prohibited from being used as sleeping accommodation, there will still be debates between landlords and local authorities regarding other bedrooms. For example, consider a bedroom of 7sqm that is above the national minimum room size but below the size standards recommended by a local authority. In such cases, the mode of occupation and compensating features available at the property may be very relevant to determining the suitability of the HMO. Local authorities will still need to show that they have carried out a holistic assessment of the property and, where appropriate, that they have looked beyond the physical features of the property to the manner in which it is occupied and the type of occupant.

Anthony Gold has particular expertise in tribunal appeals under the Housing Act 2004.If you are looking for assistance please contact us to discuss your case.