Government publish long awaited guidance on changes to mandatory HMO licensing

Wednesday, June 20th, 2018 - MHCLG

The government have today (20 May) published guidance to help local authorities implement changes to mandatory HMO licensing. The new arrangements apply across England and will come into force on 1 October 2018.

Under the new rules, mandatory HMO licensing is being extended to almost all Houses in Multiple Occupation (HMOs) that are occupied by five or more people and where there is some sharing of facilities. The licensing scheme was previously restricted to properties that were three or more storeys in height.

One of the few exemptions will apply to multi-occupied flats in purpose built blocks, if the block contains three or more self-contained flats. However, the flats may still need licensing if the council have implemented an additional or selective licensing scheme in the local area.

Time is running out to get applications submitted

With less than four months until the new regulations come into force, the guidance makes clear that landlords and agents who fail to apply for a licence by 1 October 2018 will be committing a criminal offence and could face enforcement action.

With the government estimating an extra 160,000 properties will require licensing and with minimal promotional activity having been undertaken, this may come as a surprise to many people. Councils may find themselves facing a large influx of enquiries and applications as the deadline draws near.

With a recent Better Connected survey finding 65% of council websites contain poor or unsatisfactory information about property licensing (read here), it is important that councils act quickly to get the message out.

The government have made clear that councils must promote licensing in their local area and must start to accept and process applications before 1 October.

Landlords and agents that fail to apply on time risk being prosecuted and given a hefty fine, or issued with a civil penalty of up to £30,000.

Even if the council takes no action, the tenants could apply for a Rent Repayment Order to reclaim up to 12 months rent, and whilst the property is unlicensed, the landlord can’t use a section 21 notice of seeking possession to evict the tenants.

Transitionary arrangements

The government have clarified the transitionary arrangements for properties that are currently licensed under an additional or selective licensing scheme but will fall within the new mandatory HMO licensing criteria.

In relation to additional licences, they will remain valid and no action is needed until they come up for renewal.

In relation to selective licences, the existing licence will be automatically passported into mandatory HMO licensing without any action needed. The licence conditions will remain unchanged until the licence comes up for renewal.

New minimum room sizes will be introduced on 1 October

To coincide with the changes to mandatory HMO licensing, new absolute minimum rooms sizes for licensed HMOs will also be implemented on 1 October 2018

New minimum bedroom sizes in licensed HMOs will be introduced on 1 October 2018

Under the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, the new absolute minimum bedroom sizes will be:

  • 4.64m2 for a bedroom occupied by a child under 10 years old
  • 6.51m2 for a bedroom occupied by a person over 10 years old
  • 10.22m2 for a bedroom occupied by two people over 10 years old

These minimum room sizes will apply to all mandatory HMO and additional licences that are approved or renewed on or after 1 October 2018. Whilst councils will have discretion to require larger room sizes, they will have no discretion to permit smaller rooms to be occupied.

If a property is found be over-occupied when the licence application is approved, the council can allow up to 18 months for the issue to be resolved, either by evicting the occupant or carrying out internal alterations to make the room larger.

The MHCLG guidance makes clear that the minimum room sizes will not apply to visitors or to charities that run night shelters or provide temporary accommodation to certain client groups. The sizes will also not apply to council or RSL accommodation as it does not fall within scope of the licensing scheme.

Widening of HMO licensing criteria may driving up licence application fees

Signs are starting to emerge that the widening of the mandatory HMO licensing criteria could lead to an increase in HMO licence application fees.

For example, Cambridge City Council have announced their intention to increase fees from £580 for HMOs with up to 9 rooms to a flat fee of £950 per property, regardless of size. For most applications this will represent an increase of almost 64%. The council have said they expect to receive an extra 1,000 applications and will need to recruit additional staff.

New waste disposal licence condition

From 1 October 2018, all new mandatory HMO and additional licences will also contain a condition requiring the licence holder to comply with the council’s storage and waste disposal scheme, if there is one.

However, the government has also expressed their view that HMOs are residential properties and so the council’s waste collection service should be offered free of charge, with no commercial fees levied.

A copy of the MHCLG guidance can be viewed here.

London Property Licensing has published a free guide to mandatory HMO licensing which is available here.

The new Prescribed Descriptions Order and minimum room size regulations can be viewed here.

London Property Licensing operates a licence application handling service in the London area, details here. With demand running at a high level, anyone wanting applications prepared before 1 October is urged to contact us now to avoid disappointment. Other licensing companies can also be found in our landlord suppliers directory here.

For all the latest news and events, you can sign up for the free London Property Licensing newsletter here.