Summary of ANUK/UNIPOL advice July 2007.
Multi-storey buildings comprising self-contained flats are not subject to HMO licensing. Self-contained flats occupied as HMOs are only subject to HMO licensing if the flat itself comprises three or more storeys and is occupied by five or more tenants.
This advice has been circulated to all members of the ANUK/UNIPOL National Code of Standards and follows earlier advice provided in July 2006.
The purpose of the advice is to draw attention to a particularly difficult aspect of HMO licensing and to suggest a course of action to those accommodation providers who are being asked by some local authorities, in whose area their accommodation is located, to make HMO licence applications for buildings comprising self contained flats.
The difficulty lies in the legal interpretation of ‘storey’ for the purpose of HMO licensing.
By way of background, Part 2 of the Housing Act 2004 introduced a national mandatory HMO licensing scheme. The scheme became effective on the 6th April 2006. Landlords had a three-month concessionary period to make applications for HMO licences thereby making the scheme effectively operational from the 6th July.
The parts of the new legislation that determine HMO licensing are:
ANUK/UNIPOL has been networking with a number of local authorities around the country and have identified that authorities are differing in interpreting the types of HMO that are licensable. Some local authority officers with whom ANUK/UNIPOL have networked have stated that they are having difficulties in interpreting the new legislation and accordingly some have already obtained or are seeking expert legal advice.
Some members of the ANUK/UNIPOL Code have reported that some local authorities are requiring an HMO licence application for buildings that are three or more storeys high and comprising self contained flats accommodating five or more students, but other local authorities are not.
The following is a simplified explanation of the matter that is resulting in variations in the legal interpretation of what HMOs are licensable.
A key issue to appreciate is that buildings comprising self-contained flats are not licensable. This is because either:
(a) buildings that were purpose built as self-contained flats are excluded from the definition of HMO.
(b) buildings that have been converted into self-contained flats in compliance with the 1991 Building Regulations are also excluded from the definition of HMO
(c) buildings converted before 1991 and not complying with the Building Regulations 1991 are defined as HMOs; but this type of HMO is specifically excluded from the HMO licensing requirement.
Although the buildings described above are not HMOs, the flats within them will be HMOs if they are occupied by three or more students.
It therefore follows that the licensing test needs to be applied to any self-contained flats that are occupied as HMOs, namely .. do they comprise three or more storeys and are occupied by five or more people. If the answer is yes, then the flat is licensable i.e. just the flat and not the entire building.
It is on the definition of ‘storey’ that local authorities are at variance and are they adopting one of two viewpoints.
Viewpoint 1 is that the flat itself must comprise three storeys.
Viewpoint 2 is that where a flat comprises a single storey, but is located on the second (or higher) storey of a building i.e. there are two or more storeys below the flat (namely the ground and the first floors), then those lower storeys are countable for licensing purposes.
The resulting outcomes of the above two viewpoints for the commonly occurring case of a purpose built multi-storey block of self-contained flats, where each flat is occupied as an HMO by five or more students will be:
Viewpoint (1) None of the flats are licensable.
Viewpoint (2) All the flats from, and including, the second floor are licensable.
The ANUK/UNIPOL viewpoint
The current advice provided to ANUK/UNIPOL is that the most appropriate interpretation of the legislation is viewpoint 1.
This means that the self-contained flats in the case referred to would not be licensable, nor would the building.
This viewpoint is shared by an organisation called Local Authorities Co-ordinators of Regulatory Services or LACORS for short. LACORS provides advice to local authorities on the enforcement of legislation and accordingly their views and advice are important to and usually adopted by local authorities.
In order to assist local authorities to implement the requirements of the 2004 Housing Act, the government provided funding to LACORS to establish a Housing Team to provide advice on the Housing Act. LACORS has provided comprehensive advice on the matter of HMO licensing and buildings in self-contained flats. This advice is rep-produced with the kind courtesy of LACORS as an appendix to this ANUK/UNIPOL advice.
ANUK/UNIPOL offers advice to members on a course of action in the following scenario:
A provider is being asked by a local authority to make an application for an HMO licence for a building comprising self-contained flats that the accommodation provider does not regard as being licensable.
Advice .. The provider should refer to local authority to the LACORS advice provided below. This advice is available on the LACORS website for local authorities to refer (www.lacors.gov.uk) .. note that access to this site is for local authorities only (password needed). This advice should be sufficient for the local authority to change it’s view. If the authority does not change it’s view then the provider would need to take professional legal advice.
Providers are reminded that this advice is provided in good faith by ANUK/UNIPOL but ultimately it is a matter for the Courts to decide on the most appropriate interpretation of this legislation.
I would be grateful if you could inform me of any problems that you may have experienced with any of the issues covered in this advice in order that ANUK/UNIPOL can use the information as evidence of a problem that requires clarification. simon@unipol.leeds.ac.uk
APPENDIX
DO BUILDINGS IN SELF CONTAINED FLATS NEED TO BE LICENSED?
ADVICE TO LOCAL AUTHORITIES FROM LACORS .. DATED 14TH MAY 2007
The following important judgement has been cut and pasted from the LACORS website (www.lacors.gov.uk) with their kind permission.
Relevant legislation
Housing Act 2004
Section 254 Meaning of "house in multiple occupation" and section 257 converted blocks of flats click here
Statutory Instrument 371 The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006, Paragraphs 1 and 3 click here.
Answer
Buildings comprising self-contained flats
Buildings comprising entirely of self-contained flats are not licensable under the mandatory HMO Licensing regime. This is because they will fit one of the following categories:
(a) a purpose built block of flats, which does not come within the definition of HMO as it does not fulfil any of the tests in section 254.
(b) a building converted into self-contained flats in compliance with the 1991 Building Regulations, which is excluded from the definition of HMO under section 257
(c) a building converted into self-contained flats which does not comply with the Building Regulations 1991 and where less than two thirds of the self-contained flats are owner occupied, so is an HMO. However this type of HMO is specifically excluded from the mandatory HMO licensing requirement in Statutory Instrument (SI) 371(1)(2) “This Order applies to any HMO in England, other than a converted block of flats to which section 257 of the Act applies.”
Please note – the powers in respect of certain converted blocks of flats (section 257), and the ability to include such properties within additional HMO licensing schemes, are not expected to come into force until 1 October 2007.
So no building comprising entirely of self contained flats will need a licence under the mandatory HMO licensing regime, but the flats within those buildings may need a licence.
Definition of self contained flat
Section 254(8) defines ‘self contained flat’ as:
“a separate set of premises (whether or not on the same floor)-
(a) which forms part of a building;
(b) either the whole or a material part of which lies above or below some other part of the building; and
(c) in which all three basic amenities are available for the exclusive use of its occupants.”
So the flat must contain kitchen, WC and bathroom facilities. If one or more amenity is separated from the main living accommodation by a common part, then that flat is not self contained. This is stated in the Explanatory Notes to the Act, paragraph 578 click here.
“578. Subsection (4) [converted building test] applies to private rented converted buildings which meet the shared or lack of facilities tests in (2) and also buildings that include flats where the basic amenities for the exclusive use of the occupant are located outside of the main living accommodation.”
This is confirmed in the decision of the Residential Property Tribunal in the appeal against LB Camden’s failure to issue a Temporary Exemption Notice, issued 27th January 2007, paragraphs 29-32 (the decision is not binding) click here.
Which self contained flats are HMOs?
Self-contained flats will be HMOs if they meet the self-contained flat test, which is defined in section 254 as:
“(3) A part of a building meets the self-contained flat test if
(a) it consists of a self contained flat; and
(b) paragraphs (b) to (f) of subsection (2) apply.
Paragraphs 2(b) – (f) state:
“b) the living accommodation is occupied by persons who do not form a single household (see section 258);
(c) the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259);
(d) their occupation of the living accommodation constitutes the only use of that accommodation;
(e) rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation; and
(f) two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities.”
So, self-contained flats will be HMOs if they are occupied by three or more persons (at least one of whom is unrelated) and meet all the other criteria listed above.
Which self contained flats will need a licence?
The licensing test in SI 371(3) needs to be applied to self-contained flats that are HMOs.
“(1) An HMO is of a prescribed description for the purpose of section 55(2) (a) of the Act where it satisfies the conditions described in paragraph (2).
(2) The conditions referred to in paragraph (1) are that—
(a) the HMO or any part of it comprises three storeys or more;
(b) it is occupied by five or more persons; and
(c) it is occupied by persons living in two or more single households.”
The problem is deciding which storeys should be counted in the case of a self contained flat in multiple occupation. SI 371(3) goes on to say:
“(3) The following storeys shall be taken into account when calculating whether the HMO or any part of it comprises three storeys or more—
(a) any basement if—
(i) it is used wholly or partly as living accommodation;
(ii) it has been constructed, converted or adapted for use wholly or partly as living accommodation;
(iii) it is being used in connection with, and as an integral part of, the HMO; or
(iv) it is the only or principal entry into the HMO from the street.
(b) any attic if—
(i) it is used wholly or partly as living accommodation;
(ii) it has been constructed, converted or adapted for use wholly or partly as living accommodation, or
(iii) it is being used in connection with, and as an integral part of, the HMO;
(c) where the living accommodation is situated in a part of a building above business premises, each storey comprising the business premises;
(d) where the living accommodation is situated in a part of a building below business premises, each storey comprising the business premises;
(e) any mezzanine floor not used solely as a means of access between two adjoining floors if—
(i) it is used wholly or mainly as living accommodation; or
(ii) it is being used in connection with, and as an integral part of, the HMO; and
(f) any other storey that is used wholly or partly as living accommodation or in connection with, and as an integral part of, the HMO.
There are two views on counting the storeys in buildings comprising self contained flats, they are that a flat will need to be licensed if:
(1) the flat itself comprises three storeys,
(2) the flat or part of the flat is located on the second or higher storey of a building and there are two or more storeys below the flat, which also comprise self contained flats.
Communities and Local Government (CLG) supports viewpoint one. They say you cannot count the storeys below the flat, if they are self contained flats, as they are not part of the HMO (see SI 371, paragraph 3(2a)). The FAQs section of the CLG website says: http://www.communities.gov.uk/index.asp?id=1163883&cat=100022#acat
“Is a block of flats an HMO? A purpose built block of flats is not an HMO. However, an individual flat within it might be if it is let to 3 or more tenants (at least one of whom is unrelated). The flat will not be subject to mandatory licensing but could be subject to additional licensing if the local authority chooses to introduce a scheme locally.”
In an email to LACORS of 2.1.07 CLG say:
“a proper reading of SI 2006/371 Article 3 (3) provides that in calculating the number of storeys of the HMO, or the relevant part of the building forming the HMO, you take account of all the relevant floors in the building (and exclude others), but as section 254 is clear such parts will not form the HMO unless they are actually part of it, applying the tests in either 254 (2) or 254 (4).”
So there is a strong case for viewpoint one above: i.e. only licensing flats in multiple occupation if the flat itself comprises three or more storeys. The critical wording is found in SI 371(3)(2)(a) which says that when counting storeys, you can only include ‘the HMO or any part of it…’. Including storeys which form part of the building but fall outside the curtilage of the HMO may be difficult to justify if subject to challenge.
Councils adopting the second viewpoint may find themselves licensing large numbers of self-contained flats located on the second or higher storey, that are occupied by five or more persons comprising two of more households. Some argue you can count the lower storeys by virtue of SI 371 3(3f) which allows for storeys to be counted where they contain living accommodation and are used “in connection with, and as an integral part of, the HMO.” Whilst it can be argued that the access stairway is used in connection with the flat (HMO), it is more difficult to argue it is an integral part of the flat (HMO). Ultimately, it will be for the Courts or the Residential Property Tribunal to interpret the true legal meaning.
One exception to the rule will be in respect of self-contained flats above or below business premises of two or more storeys. Such HMOs could be subject to licensing as SI 371 paragraph 3(3c and d) specifically says that business storeys should be counted.
Additional HMO Licensing
If a council is satisfied that there is a problem with certain types of flats in multiple occupation, one solution is to consider setting up an additional licensing scheme under Housing Act 2004, Sections 56-60 click here.
The CLG guidance (November 2006) “Approval Steps for Additional and Selective Licensing Designations in England” click here. States on page 5 that an additional licensing scheme could include self contained flats where you can show:
- “internal condition, such as poor amenities, overcrowding etc, adversely impact upon the health, safety and welfare of the occupiers and the landlords of these properties are failing to take appropriate steps to address the issues.
- the lack of management or poor management skills or practices are otherwise adversely impacting upon the welfare, health or safety of residents and/ or impacting upon the wider community.”
At this stage local authorities can collect evidence to show whether conditions in and management of self contained flats which are HMOs, are as poor as or worse than other HMOs which clearly need to be licensed. Such evidence would support an application to CLG for designation of an additional licensing scheme.
Conclusion
When dealing with properties comprising entirely of self contained flats, a self-contained flat will only fall within the mandatory HMO licensing regime if it comprises three or more storeys and is occupied by five or more persons comprising two or more households. Having reviewed the legislation and taken advice from CLG, LACORS believe councils should only license such properties if the flat itself comprises three or more storeys, or if it is above or below business premises.
Any decision to count lower storeys that contain separate self-contained flats may be subject to challenge. If an appeal was successful, the council may have to revoke all other such licences and refund the fees and could also be subject to civil claims from the landlord.
Whichever approach is adopted, it is important that councils have a clear policy in place explaining which self contained flats would need a licence.
Ultimately, if there are serious problems associated with poor conditions and inadequate management in flats not subject to mandatory HMO licensing, the local authority could consider setting up an additional licensing scheme.
LACORS is asking CLG to provide formal guidance to clarify this matter.
Please Note:
This advice has been produced by LACORS in consultation with experienced local authority housing practitioners. As such, it is not statutory guidance and may be subject to challenge by the Courts or the Residential Property Tribunal. Anyone wishing to comment on the advice given should email housing@lacors.gov.uk , stating which question their query refers to. LACORS may update this advice from time to time. See also the disclaimer below.
Version 1:
Date: 9.5.07
info@anuk.org.uk
