Changes to HMOs

The basic position

The law that applies to local authority licensing of HMOs was changed in October of this year, the changes affected landlords of smaller HMOs, and the ability of those landlords to seek possession of their property.

What changed?

The 2004 Housing Act imposed licensing on property housing five or more unrelated occupants in two households over three or more stories where the dwellings are not self-contained. Typical accommodation includes large property that is converted into bedsits and student “cluster” flats that have shared facilities. There are 60,000 such properties in England and Wales. In addition, local authorities have the power to introduce rules for further local licensing schemes.

From October this year, new mandatory licensing rules were applied to house-shares of two storeys or less which have five or more unrelated occupiers in two or more households. Different sources suggest that there are 160,000 or 175,000 such properties. Whichever of these estimates is correct, the expansion of the mandatory licensing regime is significant. The image of a three-bed semi that has been divided into ground and first floor flats springs to mind.

Additionally, purpose-built flats where there are up to two flats in the block and one or both of the flats are occupied by five or more persons in two or more separate households will be brought into scope. This brought certain flats above shops on high streets within mandatory licensing as well as small blocks of flats which are not connected to commercial premises.

The new rules extending mandatory licensing came into force in October 2018, but it is a phased introduction with phase one lasting six months. During this time local authorities will publicise the new licensing regime, process applications and issue licences. Landlords will not be prosecuted during phase one for failure to license a licensable HMO and will not be exposed to rent repayment orders.

However, landlords will be expected to apply for a licence during the six-month grace period. Landlords will not be able to serve valid section 21 notices seeking possession until an application for a licence has been made.

Disclaimer - all information in this article was correct at time of publishing.