Houses in Multiple Occupation and the Housing Act 2004

Commencement:

These provisions will come into force between 6th April 2006, when the majority of the provisions of the Act concerning HMOs commence, and 3rd July 2006 when the enforcement and Rent Repayment provisions start. This implementation will be carried out in the form of Regulations in Statutory Instruments, which will be published during the year.

Scope:

The provisions of the Housing Act 2004 and its associated Regulations will replace the Housing (Management of Houses in Multiple Occupation) Regulations 1990 under the Housing Act 1985. However, under these provisions many local authorities introduced their own individual HMO registration schemes, which will be retained.  Current Government guidance suggests that the bulk of the properties covered will be 3 storey properties with 5+ residents.

Existing HMO registration schemes
Where an HMO is registered under a Local Housing Authority [LHA] Registration Scheme with Control Provisions, the property may be passported into licensing. Where the HMO is registered and will be subject to mandatory licensing it must be passported into licensing. A licence will be granted for the residual period of registration and at no cost to the licence holder. Where the HMO is registered and is not subject to mandatory licensing the LHA may introduce a transitional licensing scheme to cover such types of property. Transitional schemes last for a maximum of 3 years. At the end of that period if the local authority wish to continue with additional licensing they may do so subject to the normal rules for additional licensing. Landlords and agents should check with their local authorities for the requirements of these schemes, which may differ from the national requirements.

Definition:

For the purposes of the Housing Act 2004 a building or a part of a building is a "house in multiple occupation" if it satisfies one of the following:-

(a) "the standard test";

(b) "the self-contained flat test";

(c) "the converted building test";

(d) an HMO declaration is in force in respect of the property or

(e) it is a converted block of flats.

Standard test:

A building or a part of a building meets the standard test if it meets all of the following-

(a) it consists of one or more units of living accommodation not consisting of a self-contained flat or flats;

(b) the living accommodation is occupied by persons who do not form a single household;

(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, for example students;

(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. Basic amenities mean a toilet, personal washing facilities, or cooking facilities.

Self-contained flat test:

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 the ‘Standard test' applied to the flat. (See above)

A self-contained flat means a separate set of premises, whether or not on the same floor, which forms part of a building; either the whole or a material part of which lies above or below some other part of the building; and in which all three basic amenities are available for the exclusive use of its occupants.

Converted building test:

A building or a part of a building meets the converted building test if it meets all of the following-

(a) it is a converted building;

(b) it contains one or more units of living accommodation that do not consist of a self-contained flat or flats, whether or not it also contains any such flat or flats;

(c) the living accommodation is occupied by persons who do not form a single household;

(d) the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it, for example students in term time accommodation;

(e) their occupation of the living accommodation constitutes the only use of that accommodation; and

(f) rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation.

A converted building means a building or part of a building consisting of living accommodation in which one or more units of such accommodation have been created since the building, or part of it, was constructed.

HMO by declaration:

If a local housing authority is satisfied that one of the first three tests above applies to a building or part of a building in their area, they may serve a notice, called an "HMO declaration", declaring the building or part of a building to be a house in multiple occupation. The occupation of the property must be by persons who do not form a single household and it constitutes a significant use of that accommodation or flat.

HMOs - certain converted blocks of flats:

A converted block of flats means a building or part of a building, which has been converted into, and consists of, self-contained flats. Properties in a converted block of flats will be HMOs if-

(a) building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them; and

(b) less than two-thirds of the self-contained flats are owner-occupied.

The appropriate building standards means, in the case of a converted block of flats, building work was completed before 1st June 1992 or was dealt with by regulation 20 of the Building Regulations 1991.

Excluded buildings:

A building or part of a building is not a house in multiple occupation if it is listed in Schedule 14 of the Act. These include buildings controlled or managed by public sector bodies, buildings regulated by other legislation, buildings occupied by students controlled by specified educational establishments, buildings occupied by religious communities, buildings occupied by two persons and buildings occupied by their owners and household.

Licensing and the local authority:

HMOs must be licensed by local housing authority where, they fulfil one of the definitions above, they are required by the Act to be licensed or they are in are in a designated additional licensing area.

Every local housing authority has the following general duties-

(a) to make such arrangements to secure the effective implementation in their district of the licensing regime provided for by the Act;

(b) to ensure that all applications for licences are determined within a reasonable time, not specified; and

(c) to satisfy themselves, as soon as is reasonably practicable, that there are functions that ought to be exercised by them. Local Authority may charge for licensing an HMO. There are no national guidelines on levels of charges.

Issues to be considered by the local authority:

The matters to be considered by the local authority are-

(a) that the house is reasonably suitable for occupation by not more than the maximum number of households or persons specified or that it can be made so suitable by the imposition of specific conditions;

(b) that the proposed licence holder, is a fit and proper person to be the licence holder and is, out of all the persons reasonably available to be the licence holder, the most appropriate person to be the licence holder;

(c) that the proposed manager of the house is either the person having control of the house or a person who is an agent or employee of the person having control of the house;

(d) that the proposed manager of the house is a fit and proper person to be the manager of the house; and

(e) that the proposed management arrangements for the house are otherwise satisfactory.

Tests as to suitability for multiple occupation:

The local housing authority cannot be satisfied that the house is reasonably suitable for occupation by a particular maximum number of households or persons if they consider that it fails to meet prescribed standards for occupation by that number of households or persons. Prescribed standards means standards prescribed by regulations. These will include-

(a) standards as to the number, type and quality of bathrooms, toilets, washbasins and showers, areas for food storage, preparation and cooking, and laundry facilities, which should be available; and

(b) standards as to the number, type and quality of other facilities or equipment which should be available.

See minimum amenities and facilities below.

Licence conditions:

A licence may include such conditions as the local housing authority consider appropriate for regulating the management, use and occupation of the property, its condition and contents. Those conditions may include:-

• restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it;

• the taking of practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the house;

• requiring facilities and equipment to be made available in the house to meet prescribed standards;

• such facilities and equipment to be kept in repair and proper working order;

• in the case of any works needed in order for any such facilities or equipment to be made available or to meet any such standards, that the works are carried out within such period or periods as may be specified,

• the licence holder or the manager should attend training courses in relation to any applicable code of practice.

A licence must include the following requirements.

• to produce the annual gas safety certificate

• to keep electrical appliances and furniture in the house in a safe condition; to supply the authority with a declaration by him as to the safety of such appliances and furniture.

• to ensure that smoke alarms are installed in the house and kept in proper working order; to supply the authority with a declaration as to the condition and positioning of such alarms.

• to supply to the occupiers of the house a written tenancy agreement.

A licence under the selective licensing provisions must include conditions requiring the licence holder to demand references from persons who wish to occupy the house.

Enforcement:

A person commits an offence:-

• if he is a person having control of or managing an HMO required to be licensed but is not licensed.

• if he is a person having control of or managing an HMO, which is licensed and he knowingly permits another person to occupy the house, and exceeds the licensed occupation limit.

• if he is a licence holder or a person on whom restrictions or obligations under a licence are imposed in accordance and he fails to comply with any condition of the licence.

There are defences including that he had a reasonable excuse for having control of or managing the house or for permitting the person to occupy the house, or for failing to comply with the condition. A person who commits an offence is liable on summary conviction to a maximum fine not exceeding £20,000. No payment of rent can be enforced for an unlicensed HMO and a residential property tribunal may make an order called a "rent repayment order" requiring the appropriate person to pay to the applicant such amount in respect of the housing benefit paid.

No section 21 notice may be given in relation to an assured shorthold tenancy of a part of an unlicensed HMO so long as it remains unlicensed.

Minimum amenities and facilities in HMOs:

These are intended as national minimum standards but local schemes may provide higher requirements for shared facilities. Landlords or agents should check with their local authorities. Adjacent authorities have been urged to co-operate in maintaining comparable standards but differences are bound to occur.

Baths & toilets
Where all or some of the accommodation does not contain its own bath or toilet facilities, there will need to be at least, for all sharers:-

• where practical, one separate toilet with a wash basin with tiled splashback per 5 occupiers;

• 1 bathroom with a fixed bath or shower supplying cold and constant hot water per 5 occupiers;

• all baths and washhand basins should be equipped with fixed taps providing a satisfactory supply of hot and cold water and

• bathrooms should be adequately heated and ventilated.

Where the above standards are not presently met the LA shall require them to be met within 3 years unless the HMO is not reasonably suitable for occupation by that number of people. Further

• all bathrooms and toilets are to be of adequate size & layout;

• all baths, toilets and wash hand basins are to be fit for the purpose and

• all bathrooms and toilets are to be suitably located in relation to the living accommodation in the property.

Kitchens
Where some or all of the accommodation does not contain exclusive cooking facilities there shall be at least the following:-

• a suitably located kitchen of such layout, size and equipment so as to adequately enable the occupants of the property to store, prepare and cook food;

• the kitchen will be equipped with the following minimum equipment which is fit for the purpose, sinks with hot and cold water and draining boards, cookers, electrical sockets, kettles, food preparation work surfaces, cupboards, fridges with freezer compartments and refuse disposal facilities;

• kitchens are to be fitted with extractor fans, fire blankets and fire doors.

Fire precautions
Fire precaution equipment should be provided in communal areas including kitchens, hallways and landings as considered appropriate. This, in practice, will mean to the satisfaction of the local fire service.

Bedsits
These should have washing facilities, facilities for storing, preparing and cooking food including a kettle and a fidge, space heating and reasonable access to adequate toilet and bathing facilities.

Recommended action:

1. Contact your council, find out the nature of their HMO Registration Scheme and if you are required to register. Complete forms promptly as some local authorities are charging for time taken in processing
2. Perform regular fire alarm tests and arrange an annual inspection by a qualified engineer.
3. Ensure regular testing of self closing devices on doors.
4. Arrange for annual inspection of fire extinguishers, alarms and other fire safety equipment.
5. Testing of emergency lighting at six month intervals and electrical equipment annually as best practice.
6. Maintain records of all checks undertaken, work done and certificates received.

Sources for Further Information:

• The definition of an HMO is contained in sections 254 to 260 of the Housing Act a copy of which is available on the Office of Public Sector Information at www.opsi.gov.uk
• Guidance on the Act and more information on HMOs is available on the Department of Communities and Local Government website at www.dclg.gov.uk
• The Letting Centre, website: www.letlink.co.uk

This summary is intended to assist landlords and letting agents to understand the effect of the Regulations.  It is not an authoritative interpretation - this is a matter for the courts.  For more detail, you should refer to the text of the Regulations themselves.