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HMO counting rules change for mandatory licensing


By Simon Thompson
 
     
Student landlords must consider a new counting rule for the number of floors in a house of multiple occupation following a ruling by High Court judges.

The court case has changed the way floors are counted for mandatory HMO licensing – and affects current as well as new HMOs.

In the case, London Borough of Islington v The Unite Group Plc [2013] EWHC 508 (Admin), the judges were asked to consider the method for floor counting for mandatory HMO licensing.

The Unite building housing students was higher than three floors – including ground floor commercial premises – which Islington Council insisted needed mandatory HMO licensing.

The law requires an HMO or part of an HMO needs mandatory licensing if the HMO is three or more floors and is home to five or more tenants making two or more households.

The High Court decided that the right way of interpreting the law was the HMO should comply with the definition, not the building the HMO is in.

The distinction is important for multi-purpose buildings with commercial and residential use or HMOs within a block of flats.

The ruling means for a building with a commercial use basement and ground-floor with flats above, HMO owners should count the number of floors in the flat, not the building.

Lawyer David Smith at Nearly Legal who reported the ruling, said: “The case should make it simpler to calculate whether an HMO falls into the mandatory licensing category and should release many landlords from the requirement to license self-contained single storey flats that sit in a block.

“However, since failure to have a licence when required has such severe consequences including prosecution, fine and rent repayment orders, if in doubt do seek guidance from the local authority armed with a print out of the high court ruling to wave at them if necessary.”

The decision reverses R v Roderick John Williams from 2008. Williams was fined for renting out an unlicensed HMO. His flat was above a basement flat and had two floors. The court decided as the building had three storeys, his flat should have had a HMO licence.

 
 
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