Marijana No Comments

Licensing lottery: Some councils unprepared for changes to mandatory HMO licensing

Too many local authorities are unprepared for the changes to mandatory licensing that are due to come into force in less than two weeks’ time, the RLA can reveal.

The changes will require landlords who let a property to five or more tenants forming two or more households to apply to their local authority for a licence, irrespective of building size. A licence is valid for up to five years, and each HMO property requires a separate licence.

Despite the legislation change set to affect over 177,000 properties, the RLA is concerned that there are still many councils unprepared for this change, and has now written to MHCLG about this.

A lottery

While some councils, for example Birmingham City Council, Newcastle City Council and Havering Council ARE prepared for the change to mandatory licensing, the RLA has discovered that many councils are completely unprepared.

Examples include Manchester City Council, which does not yet have an online system up and running for landlords to apply for a licence, and Hackney Council, which does not yet have the necessary forms available on its website for landlords.

Out of date information

Some councils also have out of date information around mandatory licensing on their websites. For example, in the definition of a HMO, they state the current ‘three storey rule’ – this is that HMOs compromise of 3 or more storeys, occupied by 5 or more persons from two or more households. However, the websites fail to state that as of 1st October 2018, this will change, with the three storey rule set to be phased out.

Yet others are issuing licences for a much shorter period than the standard 5-year licence.  All new HMO licences issued by Norwich will be for just one year, meaning a vastly increased amount of paperwork both the council and landlords have to deal with.

The RLA is therefore reminding landlords that if they have a HMO property that will fall into the extended scope of mandatory licensing which does not already have a licence, they MUST apply for one BEFORE the 1st October. There is no grace period, so it is imperative for landlords to apply for a licence, or else they could face a fine or prosecution and a rent repayment order.

What the RLA has been doing

In ongoing preparation for the changes, the RLA has written to over two hundred local authorities reminding them of the changes to mandatory HMO licensing. You can read the letter we have been sending to councils here

In addition to this, the RLA has also written to some local authorities in relation to licence fees. For example, Cheshire East Council has been increasing the cost of licences-which they say will ensure that they can respond to increased demand of properties which will soon fall into the scope of mandatory licensing.  You can read more about this here. 

What you need to do

If your property requires a mandatory licence, and you have not yet applied, you must get in touch with your local authority about this. Each local authority will have different communication strategies. As there is no grace period for the new law, you need to act now so that you are not in breach and at risk of being fined.

Source: RLA

Marijana No Comments

Extension of mandatory HMO licensing set for October 2018

The Government has confirmed that the extension of mandatory HMO licensing is due to come into force form 1st October 2018, subject to Parliamentary approval.

The regulations bring purpose built flats where there are up to two flats in the block, into the scope of mandatory licensing. They also remove the three storey rule -at present mandatory licensing applies to HMOs of at least three storeys and five occupants comprising of two or more family units.

How will it affect me?

Research from RLA PEARL has found that 16% of landlords rent to people in HMOs.  It is estimated that an additional 177,000 HMOs will become subject to mandatory licensing in England as a result of this extension.

Properties will be subject to mandatory licensing if they meet the following criteria:

  • It is occupied by five or more persons;
  • is occupied by persons living in two or more separate households; and
  • meets—
    • the standard test under section 254(2) of the Act;
    • the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or
    • the converted building test under section 254(4) of the Act.

The Order, which can be read here applies to HMOs in England, but does not apply to converted blocks of flats, to which section 257 of the Act applies. These are buildings that have been converted into and consist of self-contained flats where the building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them, and less than two-thirds of the self-contained flats are owner-occupied.

Six month grace period

There would be a grace period of six months to give landlords time to comply and local authorities time to process licences.

The RLA believes many of the changes are unnecessary and says they will put a huge strain on local authorities. The Association made its points in its formal response to the Government consultation.

Source: RLA

Marketing No Comments

New HMO Regulations for Mandatory Licensing – Effective 1st Oct 2018

Statutory Instruments
2018 No. 221

Housing, England
The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018

Made

20th February 2018

Laid before Parliament

23rd February 2018

Coming into force

1st October 2018

The Secretary of State makes the following Order in exercise of the powers conferred by sections 55(3) and 250(2)(a) and (b) of the Housing Act 2004(1).
Citation and Commencement

1.—(1) This Order may be cited as the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018.

(2) This Order comes into force on 1st October 2018.
Application

2. This Order applies in relation to an HMO in England(2).
Interpretation

3. In this Order “the Act” means the Housing Act 2004.
Description of HMOs prescribed by the Secretary of State

4. An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act if it—

(a)is occupied by five or more persons;

(b)is occupied by persons living in two or more separate households; and

(c)meets—

(i)the standard test under section 254(2) of the Act;

(ii)the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or

(iii)the converted building test under section 254(4) of the Act.
Transitional Provision

5.—(1) A licence issued under Part 3 of the Act has effect as if issued under Part 2 of the Act in respect of an HMO that—

(a)is licensed under Part 3 prior to 1st October 2018, and

(b)is required to be licensed under Part 2 from that date.
Revocation

6. The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006(3) is revoked.
Review

7.—(1) The Secretary of State must from time to time—

(a)carry out a review of the regulatory provision contained in this Order, and

(b)publish a report setting out the conclusions of the review.

(2) The first report must be published before 6th April 2023.

(3) Subsequent reports must be published at intervals not exceeding five years.

(4) Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this article must, in particular—

(a)set out the objectives intended to be achieved by the regulatory provision referred to in paragraph 1(a),

(b)assess the extent to which those objectives are achieved,

(c)assess whether those objectives remain appropriate, and

(d)if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5) In this article, “regulatory provision” has the same meaning as in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015(4).

Signed by authority of the Secretary of State for Housing, Communities and Local Government

Heather Wheeler

Parliamentary Under Secretary of State

Ministry of Housing, Communities and Local Government

20th February 2018

EXPLANATORY NOTE

(This note is not part of the Order)

This Order prescribes a description of a house in multiple occupation (“HMO”) to which Part 2 of the Housing Act 2004 (“the Act”) applies. Under section 61(1) of the Act every HMO to which Part 2 of the Act applies must be licensed unless it is subject to either a temporary exemption notice under section 62 of the Act or an interim or final management order under Chapter 1 of Part 4 of the Act.

The Order applies to HMOs in England but does not apply to converted blocks of flats, to which section 257 of the Act applies. These are buildings that have been converted into and consist of self-contained flats where the building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them, and less than two-thirds of the self-contained flats are owner-occupied.

Article 1 makes a commencement provision.

Article 4 prescribes a description of HMOs for the purpose of section 55(2)(a) of the Act. The standard test relates to HMOs which comprise of one or more units of living accommodation which do not consist of a self-contained flat or flats. The self-contained flat test relates to HMOs which comprise of a self-contained, purpose-built flat situated in a block comprising of no more than two self- contained flats (whether or not the block also contains non-residential premises). The converted building test relates to HMOs which are converted buildings.

Article 5 makes a transitional provision.

Article 6 revokes The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 which this Order replaces.

Article 7 makes provision for the review of these Regulations at the end of the period of 5 years beginning with the date on which they come into force.

An impact assessment has been prepared in relation to this Order. The assessment will be placed in the Library of each House of Parliament and made available on www.gov.uk. Copies may be obtained from the Ministry of Housing, Communities and Local Government, 2 Marsham Street, London, SW1P 4DF.
(1)

2004 c.34. For the definition of appropriate national authority see section 261(1) of the Act.
(2)

For the meaning of HMO see sections 77 and 254 to 259 of the Act.
(3)

S.I 2006/371
(4)

2015 c. 26. See section 32.

 

Source: Legislation.gov.uk