RESIDENTIAL LANDLORDS – Are you committing an offence?

From the 6th April 2006, the Housing Act 2004 reformed the regulatory regime surrounding Houses of Multiple Occupation (HMO’S), and made obtaining a licence a mandatory requirement in certain circumstances.

An HMO is defined in the Act as a building or part of a building occupied by persons who do not form a single household, and who share basic amenities.

Not all HMO’s have to be licensed. Licensing only applies to HMO’s where rent or other considerations are payable. Some HMO’s are completely exempt from the licensing requirement. They include, 2 person flat shares, buildings with a residential landlord and up to 2 tenants, properties managed by public bodies, buildings where residential accommodation is not the primary purpose, student residences and freehold or long leasehold.

 There are 3 types of Licensing:

COMPULSORY: Properties that are 3 or more storey’s high, have five or more people in more than one household and share amenities are required by law to be licensed.

ADDITIONAL:  Councils have a discretionary power to require certain HMO’s, which are not caught within compulsory licensing to be licensed.

SELECTIVE:   Councils have a discretionary power to selectively license privately rented properties in designated areas, which are suffering from low housing demand and/or anti social behaviour
The Local Housing Authority has absolute discretion in determining whether or not an HMO is required to be licensed. If your property requires a licence, it is an offence not to have one.

The proposed Licence holder must be a fit and proper person, and the management arrangements for the property must be suitable, as must any proposed manager or agent.

The property must be suitable for occupation by the number of persons specified in the Licence.

The licence may be revoked or the terms varied on application by the holder or by the Local Housing Authority on their own initiative.

It is an offence to have control of an HMO that is unlicensed and should be, and it is punishable by way of a fine of up to £20,000. It is also an offence if a licence holder or person subject to licence restrictions fails to comply with any such restrictions contained in the licence.

A landlord who fails to comply with the licensing requirements will not be able to serve notice and regain possession of the property until the expiry of the tenancy agreement.

A landlord may be required to repay rent to the tenant as a result if non-compliance.