Insights on UK’s Property Licensing Reforms

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Starting October 1, 2018, mandatory licensing for Houses in Multiple Occupation (HMOs) extends to previously exempt buildings. Landlords must now ensure bedrooms meet specific size criteria, and tenants comply with local waste disposal regulations.

HMOs serve various housing needs, but concerns about overcrowding in two-story houses or flats designed for families prompted regulatory updates. The government aims to protect residents from unscrupulous landlords and addresses issues like insufficient rubbish storage impacting local communities.

Two key regulations, “The Prescribed Description Order” and “The Mandatory Conditions Regulations,” are effective from October 1, 2018, impacting HMOs. Landlords renting private property must understand these reforms and their responsibilities post the mentioned date.

Who is affected?

The Housing Act 2004, Part 2, mandates local housing authorities to license HMOs meeting specific criteria. Initially for three-storey properties, the new Prescribed Description Order extends to one or two-storey buildings with five or more people from separate households. Licensing is now required for flats passing the self-contained flat test, except purpose-built ones. Registration is necessary for properties meeting the converted building test, indicating conversion since the original construction, covering not only bed-sit conversions but also cases where part of a family house has been converted.

Exemptions:

The recent extension of HMO licensing requirements brings more properties into its scope. However, existing exemptions outlined in Schedule 14 of the Housing Act 2004 persist, providing relief for landlords. Notably, buildings managed or controlled by a body registered as a social landlord under Part 1 of the Housing Act 1996 or categorized as social housing under Part 2 of the Housing and Regeneration Act 2008 remain exempt from HMO classification, alleviating the need for an HMO license.

New Mandatory License Conditions

Changes to the Housing Act 2004 empower local housing authorities to set specific conditions on licensed HMOs, covering management, use, and occupation. The Mandatory Condition Regulations, effective from October 1, 2018, introduce waste disposal requirements and national minimum sleeping room sizes. Landlords must comply with the council’s waste disposal scheme, with non-compliance constituting a license breach and a criminal offense.

Minimum sleeping room sizes include 6.51 m² for one person over 10 years old, 10.22 m² for two persons over 10 years old, and 4.64 m² for one child under 10 years old. Rooms below 4.64 m² cannot be used for sleeping, and landlords must inform the local housing authority. Violations may result in unlimited fines or a penalty of up to £30,000 without prosecution. While local housing authorities can set higher standards, they lack the authority to establish lower ones.

Transitional provisions

Landlords of HMOs falling within the new definition must apply for a license or temporary exemption by October 1, 2018, to avoid committing a criminal offense. The Prescribed Description Order and Mandatory Conditions offer transitional provisions, allowing existing licenses to remain valid with conditions applicable until expiration.

The extended mandatory conditions, including minimum sleeping room sizes and waste disposal requirements, come into effect upon license renewal. Non-compliance prompts a notification from the local housing authority, specifying conditions and providing up to 18 months for compliance. The new licensing regime aims to enhance health and safety standards and curb landlords offering subpar accommodation for increased profit, requiring all landlords to understand and adhere to the new requirements and obligations.

What are the extended mandatory HMO licensing requirements?

In April 2018, Parliament approved secondary legislation reshaping the mandatory HMO licensing regime. The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 broadens the scope of section 55(2)(a) of the Housing Act 2004, now applying mandatory HMO licensing to properties with less than 3 storeys.

The Prescribed Description Order 2018 also addresses the passporting of licenses from additional and selective licensing schemes into the mandatory licensing regime. This process is detailed further in chapter 2. Another significant development is the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, amending Schedule 4 of the Act. These regulations introduce new conditions for licenses granted under Part 2, including mandatory national minimum sleeping room sizes and waste disposal provision requirements.

The occupation requirement

The 2018 Prescribed Description Order keeps the occupation requirement unchanged. For mandatory licensing, an HMO (or Flat in Multiple Occupation) must still be occupied by 5 or more individuals from 2 or more separate households.

Additional HMO licensing

The local housing authority can designate an area for additional HMO licensing if they believe certain HMOs (like section 257 HMOs or purpose-built flats in blocks with three or more self-contained flats) require licensing beyond the mandatory scope. This designation follows the statutory requirements outlined in Part 2.

Implementation

Landlords should be aware that the Prescribed Description Order 2018 takes effect from October 1, 2018. This allows time for preparation and obtaining a licence. Failing to apply for a licence or temporary exemption by this date could result in criminal charges for landlords of HMOs falling under the new definition.

The Mandatory Conditions Regulations 2018 include transitional provisions, detailed in Paragraph 2.6, to facilitate compliance with the new rules within a specified timeframe.

Local housing authorities, as per Section 55(5) of the Act, are obligated to effectively implement mandatory licensing in their districts. They must actively promote licensing, process applications before October 1, 2018, and ensure timely determination of all licence applications. Planning permission should ideally precede licence issuance, and local authorities must ascertain that there are no relevant housing conditions functions under Part 1 of the Housing Act 2004 concerning HMOs for which they have received a licence application.