Housing Act 2004 - HMO licensing

Housing Act 2004 - HMO licensing

The Housing Act introduces two new licensing regimes for private rented properties. There is a new requirement for sellers or estate agents to produce a home information pack before marketing any residential property for sale along with provision for an ombudsman scheme for estate agents. The Act makes other provision about housing, including changing the right to buy scheme, strengthening the rights of park home owners, extending the power of the Housing Corporation to give social housing grant to non-registered social landlords and enabling local authorities to secure occupation of long-term empty private sector homes. It also establishes tenancy deposit schemes to safeguard deposits paid in connection with assured shorthold tenancies. Finally, it requires local housing authorities to assess the accommodation needs of Gypsies and travellers in their area, and produce a strategy on how these needs can be met.Although the Housing Act covers various housing issues, the basis of this brief is to provide more information on HMOs (Houses of Multiple Occupancy) and how it effects my clients and other Landlords . This part of the Act comes into effect in April 2006 and it only affects properties in England and Wales. The Welsh will be implementing the legislation after England and cannot give a specific date as yet. Scotland and Northern Ireland have their own legislation. DefinitionAs from October, the definition of an HMO became:A building, or part of a building which is entirely occupied by more than one household and in which more than one household shares an amenity (or the building lacks an amenity) such as a bathroom, toilet or cooking facilities; or,Which is occupied by more than one household and which is a converted building which does not entirely comprise self contained flats (whether or not there is also a sharing or lack of amenities); orWhich comprises entirely of converted self contained flats and the standard of conversion does not meet, at a minimum, that required by the 1991 Building Regulation and more than one third of the flats are occupied under short tenancies.And is ‘occupied’ by more than one household:- as their only or main residence, or, - as a refuge by persons escaping domestic violence, or, - during term time by students, or,- for some other purpose that is prescribed in regulations.And the households comprise:- Families (including foster children)and current domestic employees- Single persons - Co-habiting couples (whether or not of the opposite sex).Certain types of buildings will not be HMOs for the purpose of the Act, other than Part one Housing Health and Safety Rating System (HHSRS) and are, therefore, not subject to licensing. These include those:Buildings or parts of buildings, occupied by no more than two households each of which comprise a single person (i.e. two person flat sharers’).Building occupied by a resident landlord with up to 2 tenants.Managed or owned by a public body (such as the police or the NHS) or an LHA or a Registered Social Landlord.Where the residential accommodation is ancillary to the principal use of the building e.g. religious establishments, conference centres etc.Student halls of residence, where the education establishment has signed up to an Approved Code of Practice.Buildings regulated otherwise than under the Act, such as care homes, bail hostels etc, and the description of which are specified in regulations.Buildings entirely occupied by freeholders or long leaseholders.Compulsory Registration as HMOs.There are certain categories of HMOs that must be licensed by Local Housing Authorities (LHAs) and these comprise of three storeys or more and are occupied by five or more persons, who comprise two or more households. In calculating three storeys, regard should be had to attic or basement accommodation used, or capable of being used, for residential purposes. It is also intended that any part of a building not used for residential purposes, such as commercial premises on the ground or upper floor of a building, will form part of the HMO for determining the number of storeys, but shall be excluded for all other purposes. Basements in purely commercial use will not be included.A LHA can make an additional licensing scheme that may apply to HMOs (other than those that are exempt from licensing/ definition or subject to mandatory licensing) in its area, or any part of it. The additional licensing scheme may apply to such categories of HMOs as the LHA considers appropriate.

Fines The licence holder or manager of an HMO who allows it to be occupied by more persons than are permitted under the licence commits an offence and can be fined up to £20,000. If that person otherwise breaches or fails to comply with a condition of the licence he will also commit an offence and may be fined up to a maximum of £5,000. CessationA licence may be revoked when a house/property ceases to be an HMO. It is also ends automatically after 5 years or after the period specified in the licence (if that is different).A licence ceases to be in force on the death of a licence holder and for the first three months following the death of that person no licence is required as if a temporary exemption notice had been issued and was in force.Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000This differs from the Housing Act 2004 in that it was introduced from October 2000. The definition is:A house is an HMO if it is the only or principal residence of three or more qualifying persons from three or more families.FinesIt is a criminal offence to operate an HMO without a licence. The maximum penalty is level 5 (currently £5000).Information taken from the Scottish Executive website.The Housing (NI) Order 2003Definition of House in Multiple OccupationThe Housing (NI) Order 2003 revised and clarified the definition of HMO to;"A house occupied by more than 2 qualifying persons, being persons who are not allmembers of the same family".The person registered as the manager of the HMO must be resident in Northern Ireland.Information taken from the Northern Ireland Housing Executive website.

Information taken from
http://www.opsi.gov.uk