Legislation relating to Houses in Multiple Occupation (HMO) has long existed to ensure landlords follow the necessary requirements when renting out properties to multiple people. All HMOs are subject to legislation about how they are managed and certain larger HMOs (3-storeys or more with 5 or more occupants) are required to have a license.
In the recent case of Woking BC v Johnson (unreported), 10 October 2017, (QB (Administrative Court)), a two-storey self-contained flat situated above a restaurant was occupied by more than five people who did not form part of the same household. Whilst it was clear that this was indeed an HMO, the question for the magistrates was whether the property fell within the description of an HMO, which was required under the statutory scheme to be licensed.
Article 3(3) of the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 (SI 2006/371) provides that a property requires a license where:
- It is occupied by five or more people.
- The HMO or any part of it comprises three storeys or more.
- It is occupied by persons living in two or more households.
The local authority alleged that the respondent had committed an offence under section 72 of the Housing Act 2004 (HA 2004) by failing to obtain an HMO license in respect of the property. The local authority argued that the restaurant (below the flats) should be included within the number of storeys considered when calculating the requirements under Article 3(3). The magistrates relied on the decision in Islington LBC v Unite Group Plc  EWHC 508 (Admin) in which it was decided that it was the HMO itself that had to comprise three storeys and not the building in which it was situated. The magistrates decided that the restaurant did not form part of the HMO and therefore did not require a license. The local authority appealed by way of case stated.
The issue for the High Court was whether the magistrates had been correct to exclude the restaurant when calculating the number of storeys.
The appeal was subsequently allowed by the High Court. It was held that the magistrates should not have relied on Islington LBC v Unite Group Plc as the circumstances differed to the present case. In Islington, the property comprised a five-storey block of purpose built self-contained flats. The ground floor consisted of a shop and the four upper floors were residential accommodation. Most such accommodation was in the form of cluster flats with four to six bedrooms with en-suite bathrooms and a communal living room and kitchen. Each flat was on one storey. The cluster flats were each a house in multiple occupation (HMO) within the meaning of the Housing Act 2004. In contrast, in the present case the property was a two-storey self-contained flat above a commercial premises.
The correct approach should have followed the explanatory note to the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006, which requires that commercial premises above or below living accommodation, except where they were located in the basement, should count towards the calculation of storeys.