Standards for houses in multiple occupation (HMOs)
11. Licensing of houses in multiple occupation
HMOs occupied by five or more persons who form two or more households will require a licence from the local authority.
11.1 Applying for a licence
The onus is on the HMO landlord to make an application for a licence, where one is required, but the local authority will take steps to ensure that landlords are aware of the need to apply.
The application for a licence is made by completing an application in the form prescribed by the local authority.
Regulations require the landlord to notify all people with an interest in the property eg mortgagees, head leaseholders etc, of your application.
It is a criminal offence to knowingly supply information that is false or misleading for the purposes of obtaining a licence. Evidence of any statements made in this application may be required at a later date. If we subsequently discover something that is relevant and that you should have disclosed, or which has been incorrectly stated or described, your licence may be cancelled or other action taken.
Operating an HMO that should be licensed without a licence or a valid application acknowledged by the council is an offence liable to an unlimited fine. In addition, a Residential Property Tribunal may make a rent repayment order requiring you to repay any rents due during the period for which the property was unlicensed.
11.2 Granting a licence
The Housing Act 2004 requires that in deciding whether to grant or refuse an application for a licence, the local authority must have regard to the following matters:
- whether the house is reasonably suitable for occupation by the number of persons specified in the application:
National amenity standards which set out the minimum requirements for numbers of bathrooms, wc, kitchen facilities etc, will be used to determine this.
- whether both the licence holder and the proposed manager or person having control of the house is a “fit and proper” person:
In considering this matter, the local authority must have regard (amongst other things) to evidence which shows that a person has committed any offences involving fraud, dishonesty, violence, drugs or sexual offences, practiced unlawful discrimination or contravened any housing or landlord and tenant law, or any Approved Code of Practice.
- whether the proposed management arrangements are satisfactory:
In considering this matter, the authority must have regard to whether a manager has a sufficient level of competence and whether any proposed management structures and funding arrangements are suitable.
Licences will be granted where the house is reasonably suitable for occupation as a HMO (or can be made suitable), the management arrangements are satisfactory and the licensee and manager are fit and proper persons. The applicant must be the most appropriate person to hold the licence.
The Act enables local authorities to charge a fee to accompany an application for a licence which may take into account their costs incurred in carrying out their licensing functions.
Fee levels are reviewed on an annual basis. Please contact the council to find out the current fee level.
11.4 Terms and conditions
Licences will be valid for up to five years and will specify the maximum number of occupiers or households. The number of occupants permitted by the licence will depend on the number and size of rooms and the kitchen and bathroom facilities.
All licences will be issued with the following mandatory conditions:
- to provide copies of gas safety certificates annually
- to keep electrical appliances and furniture safe
- to install smoke alarms and keep them in working order
- to install carbon monoxide detectors (where there is a solid fuel burning appliance) and keep them in working order
- to provide tenants with a written tenancy agreement
- to ensure that the statutory minimum bedroom sizes are not breached
- to comply with the council’s waste collection policy
Local authorities have powers to attach additional conditions as considered appropriate in relation to the management, use, occupation or condition and contents of the HMO.
11.5 Temporary Exemption Notices
The council may serve a Temporary Exemption Notice (TEN) where a landlord is, or shortly will be, taking steps to make an HMO non-licensable. A TEN can only be granted for a maximum period of three months. A second three-month TEN can be served in exceptional circumstances.
Applications for a TEN must be made in writing specifying the steps being taken which will mean that the house will not require a licence.
11.6 Penalties and Enforcement
Restriction on terminating tenancies
No section 21 notice may be served under the Housing Act 1988 in relation to a shorthold tenancy of part of an unlicensed HMO.
Revocation of licence
The local authority may revoke a licence where there are serious or repeated breaches of licence conditions or where the authority considers that the licence holder or manager is no longer a fit and proper person.
Prosecution and fines
The following breaches are criminal offences for which a landlord can be prosecuted. On conviction, an unlimited fine can be imposed by the courts. As an alternative to a prosecution, the council can impose a fine of up to £30,000 for each offence:
- operating a HMO which is required to be licenced without a licence
- allowing more people to occupy the house than is permitted in the licence
- failing to comply with a licence condition
- failing to comply with the HMO Management Regulations
Orders by the First-tier Tribunal
The local authority may apply to the First-tier Tribunal for the following penalties in respect of some licencing offences:
- Rent Repayment Orders
Where a landlord fails to license a HMO, the Tribunal may issue a Rent Repayment Order, requiring the landlord to repay up to 12 months rent to the council (if paid in housing benefits) or to the tenants.
- Banning Order
For the most serious breaches of management regulations or failure to licence an HMO, the Tribunal can issue a Banning Order which prevents a person from letting a house or engaging in letting agency or property management work for at least 12 months. (Banning Orders can also be issued in respect of a number of other housing and non-housing related offences such as theft, criminal damage, fraud, violence.)
- Management Orders
Where there is no prospect of an HMO being licensed (or a licence has been revoked) the Tribunal can permit the council to take over the management of an HMO and become responsible for running the property and collecting rent for up to a year. In some cases this can be extended to five years with the council also having the power to grant tenancies.
- Rogue Landlord Database
The council has powers to include details of any landlord who has been convicted of a Banning Order offence or has received at least two financial penalties on the national database of rogue landlords.