Houses of multiple occupancy - defence lawyers for landlords

The property market has expanded and changed significantly over the past few years. With expansion comes more regulation and standards for landlords to adhere to, particularly in relation to houses of multiple occupancy (HMOs).

Local authorities have the power to regulate HMOs within their areas with the aim of safeguarding tenants. Failure to licence a HMO or failure to comply with the HMO management regulations can lead to criminal prosecutions, substantial fines, orders to repay rent to affected tenants and banning orders.

Stephensons has a team of specialist regulatory lawyers who provide advice and representation to landlords and letting agents in relation to HMO licences. If you under investigation, or you are facing prosecution, contact our specialist lawyers on 0203 816 9274. For advice on acquisitions of HMOs please contact our specialist commercial property department.

 

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HMO licensing

Under the Housing Act 2004, a property will be considered a HMO if:

  • There are at least three tenants living there, forming more than one household; and
  • The tenants share facilities with one another, for example a bathroom and/or kitchen.

Landlords must be mindful that certain HMOs require a license to legally rent out the property. There are three types of licenses:

  • Mandatory licensing
  • Additional licensing
  • Selective licensing

Mandatory licensing

On 1 October 2018, new rules regarding mandatory licensing came into force throughout England and Wales. Under the new regulations, rented properties which are occupied by five or more persons, which form more than one household, must have a mandatory HMO license. It does not matter where in England the property is located.

It is important to note that there is no longer a requirement for the property to comprise of three or more stories, which was a requirement under the old regulations. This means that a property that did not previously need to be licensed may now need to have a mandatory license in place.

Additional and selective licensing

Additional licensing schemes can be introduced by local authorities to ensure that HMOs which do not fall into the remit of the national mandatory regime, have to be licensed. The local authority will usually introduce such schemes in certain areas (known as ‘designated areas’) to address management issues and poor property conditions which are causing problems for residents. Before the local authority makes a decision to introduce the additional licensing scheme, they must conduct a consultation with local landlords and others likely to be affected.

Under part 3 of the Housing Act 2004, local authorities are able to introduce a selective licensing scheme to certain areas. If the scheme is introduced, it will affect all rented properties within that area, not just HMOs. As with additional licensing, the local authority must believe that it will reduce certain housing problems in that area.

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HMO Management Regulations

The Management of HMO (England) Regulations 2006 detail strict regulations that landlords must comply with when managing a HMO. This includes certain measures relating to fire safety, waste disposal, water supply and drainage, and general maintenance of the property.

All HMOs, whether licensable or not, must comply with the management regulations.

HMO and Housing Act offences

Under the Housing Act 2004, private landlords, property managers, and letting agents can be held liable if the property is not correctly licensed or there has been a breach of the management regulations.

Local authorities will usually look to investigate landlords suspected of committing an offence. The property may be subjected to an unannounced inspection, or they may be required to attend an interview under caution. It is important that landlords seek legal advice if they have received an invite to an interview under to ensure that they know the best way to approach the interview. 

Once the investigation has been concluded, the local authority will decide upon what action to take. This includes:

  • Criminal prosecution. This can result in unlimited fines and may lead to banning orders being made after conviction.
  • Civil penalties of up to £30,000 per breach.

In addition to the above, the local authority or tenants of the property affected may seek a rent repayment order. This is an order whereby the landlord will be required to pay rent.

If you or your business is facing investigation, you need to act quickly with the support of a specialist HMO lawyer to limit the financial impact and reputational impact.

Our experience

Our specialist team of lawyers have experience of advising and representing landlords, letting agents, and property managers nationwide in relation to the following:

  • HMO applications
  • Advice in relation to local authority investigations
  • Interviews under caution (known as PACE interviews)
  • Advice in relation to a notice of intent
  • Advice in relation to interim and final management orders
  • Civil enforcement
  • Advice and representation in relation to criminal prosecutions
  • Banning orders
  • Rent repayment orders
  • Representation at the first-tier tribunal and
  • Appeals against decisions to the first-tier tribunal

If you require advice or support in relation to any of the above, you should seek specialist legal advice as soon as possible in order to protect your and your business’ interest. For a confidential discussion with a member of our team, please contact us on 0203 816 9274 or complete our online enquiry form.

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