Advice for Private Landlords Mandatory Licensing of Houses in Multiple Occupation

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1 Advice for Private Landlords Mandatory Licensing of Houses in Multiple Occupation Plymouth City Council Housing Services Community Services Directorate

2 Licensing applies to some (not all) houses in multiple occupation (HMOs). It is a duty imposed on both the owner and manager to ensure that HMOs which should be licensed comply with this law. What is Licensing? It is the requirement that these HMOs are licensed, safe and properly managed and have adequate amenities. It sets out in law what good landlords already do, and ensures that other landlords operate on a level playing field. What is a Licensable HMO? The Housing Act 2004 defines what an HMO means. The Private Rented Team has leaflets on this and other aspects of privately rented housing. Even if the property is not a licensable HMO, there are still requirements for its safety and suitability for occupation. In addition, the management regulations apply to all HMOs, whether licensable or not. A licensable HMO is: A house or flat which is occupied by 5 or more persons and Those people comprise 2 or more households. A household is a group of people who are related, or live together as husband and wife/same sex partners and The house or flat is arranged on 3 or more storeys and The building has not been fully converted into fully self contained flats (however, a flat in such a house may be a licensable HMO). To be a licensable HMO all four of these points must apply. A fully self contained flat is a flat which has all the amenities (bathroom, toilet and cooking facilities) and all the rooms of the flat can be accessed without leaving one room and crossing a common hallway to enter another. Storeys include all the floors used by the occupiers of the HMO. Where part of the building is used for commercial premises, it will also include those non residential areas. Where the HMO is a flat, it is the number of storeys within the flat which is relevant (plus the addition of any commercial storeys - see above). Two storey houses which have two mezzanines storeys at the rear count as two storeys, even if the rear storeys are at a different height.

3 Three storey houses and flats occupied as shared student accommodation by five or more students are HMOs and licensable. HMOs include some bed and breakfast accommodation; these may be licensable. Owner occupied houses can be licensable HMOs (for example where some of the rooms are let to other people). The laws on HMOs and Licensing are complex; this leaflet can not address all situations. If you are unclear about licensing please contact the Private Rented Team. You should submit an application for a second TEN (which will only be approved in exceptional circumstances) How does it work? Anyone who owns or manages a licensable HMO must ensure that the proper steps have been taken to operate lawfully. This will normally mean applying for a licence. The application form, guidance and standards are available from the Private Rented Team (and our website). Do all Licensable HMOs have to be Licensed? You can apply for a Temporary Exemption Notice (TEN). A TEN can be granted where a landlord is in the process of taking steps to remove an HMO from the need to licence. If approved, a TEN gives 3 months for carrying out these works; during this period you will be exempt from licensing requirements. If you submit a valid application for a TEN you will have complied with your Licensing obligations until the Council decides whether or not to approve it. When the 3 month period of a TEN expires; The HMO should no longer be licensable or You should submit a licence application or Do I have to carry out any work before applying for a Licence? You must provide certificates with your application form (more information on this is included in the application form). In addition, there must be a basic working fire alarm system, and the gas supply and fittings, furniture and electrical appliances must be safe. A basic alarm system comprises battery smoke alarms on each floor of the HMO. This is a temporary measure; in due course you will need to fit a full alarm system appropriate to the property. Where necessary, we will require other improvements during the course of the licence.

4 When does the Council approve a licence? The Council must give a licence if it is satisfied that the following apply: the HMO is reasonably suitable for occupation by the number of people proposed to live in it the proposed licence holder is a fit and proper person the proposed licence holder is the most appropriate person to hold the licence the proposed manager, if there is one, is a fit and proper person the management arrangements are satisfactory, the management is competent and the financial and management structures are suitable. the landlord s electrical appliances and furniture are safe (where gas is supplied) there is a current gas safety certificate What does a fit and proper person mean? In deciding whether someone is fit and proper the council must take into account: any unspent convictions relating to violence, sexual offences, drugs and fraud/other dishonesty any evidence of breach of housing or landlord and tenant laws whether the person has practised unlawful discrimination whether there has been a breach of an approved code of practice (this has yet to be produced by the Government). What is in a licence? The licence will specify the maximum number of people who may live in the HMO, and it may specify work to make the house suitable for that occupation. It will also include conditions imposed both by government and the Council. there are operational smoke alarms on each floor of the building all tenants have a written statement of terms of tenancy How long will it last? A licence will normally last for five years.

5 How much will it cost? Landlords will have to pay a fee for the costs of the licence procedure. This fee scale reflects the work to be carried out in administering licensing. We will calculate the fee from your application details, and advise you of the charge to be made. The basic licence fee is 550. Can the council refuse to license my property? Yes, if the house, proposed licence holder or management arrangements do not meet the criteria shown above (and we can not resolve the problem by negotiation). What happens if a licence can not be issued? If it is not possible to come to an agreement, we must issue an Interim Management Order (See Sanctions below). Can I appeal? Where an applicant does not agree with a Council decision, they may appeal to the Residential Property Tribunal (RPT). This can occur when the council decides to: refuse a licence grant a licence with conditions revoke a licence vary (or refuse to vary) a licence. What happens after a licence has been approved? The Council will inspect all licensed HMOs within the 5 year period of the licence. This is to: Check that the information given on the application form is accurate Assess compliance with the conditions of licence Inspect the HMO using Housing Health and Safety Rating System (HHSRS). This will identify any issues that affect the health and safety of the occupiers. The inspection may result in the need to carry out works and/or to change the conditions of licence. We will discuss any problems and try to agree action and timescales. Public registers The Government demands that the Council keeps a public register of licenses, TENs, (both approved and rejected) and management orders (see Sanctions below).

6 What happens if I decide to get rid of some of my tenants so that I no longer need to license? You can not use a Section 21 notice to evict tenants from a licensable property which is operating outside licensing law. Section 8 may still be used (for example where there is outstanding rent). Of course unlawfully evicting tenants is harassment and a criminal offence. This could result in an Interim Management Order being made (see below). Reducing the number of occupiers may lose over 10,000 across the 5 year term of the licence, as opposed to the current average fee of less than 500. Sanctions Generally Where a property is operated in contravention of licensing legislation then this is evidence of an offence. This will be taken into account in assessing whether the owner, manager or (proposed) licence holder are fit and proper persons. Should this be the case, it will not only affect the property in question, but also every other licensable property (whether in Plymouth or elsewhere) with which these people are connected. Penalties Where the landlord, manager or licence holder: fails to apply for a licence for a licensable property, OR allows a property to be occupied by more people than are permitted under the licence OR breaks any of the other licence conditions Or provides false or misleading information they can be prosecuted and fined (up to 20,000 in some cases). Interim Management Order (IMO). An IMO allows the Council to step in and manage the property for the owner. Although an Interim Management Order can only last for a year, the council can issue a Final Management Order (FMO) to extend this period by a further five years. These procedures can also be used where the health and safety of the occupiers is threatened. Rent Repayment Orders Councils can apply to the Residential Property Tribunal to reclaim any housing benefit that has been paid during the time the property was unlicensed (subject to a maximum of one years rent). A tenant can also apply to claim back the rent paid.

7 Section 21 Notice of Eviction Where a licensable HMO is being operated outside the licensing legislation, the landlord can not use a Section 21 notice to evict tenants.

8 Disclaimer The information and advice given in this leaflet is accurate to the best of our knowledge. However, you are advised not to rely exclusively on what we say here, as legislation or government advice may have changed since this leaflet was printed. If you have a particular problem you should take the advice of a qualified expert in the relevant area. Plymouth City Council will not accept liability for loss resulting from relying on advice from this leaflet This is one of a series of advice leaflets produced for tenants and private landlords. Links to these and all the documents referred to in this leaflet are available at If you have any difficulty in understanding this leaflet or are visually impaired please contact the Private Sector Housing Team on Tel This leaflet is available in other languages and formats, please telephone (01752) for further information. Housing Services Plymouth City Council Civic Centre Plymouth PL1 2AA Tel Fax Published March 2007 Ref Licensing HMO s A5

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