HMO decision changes mandatory licensing rules

A landmark High Court case has changed the way the numbers of storeys in a block are counted to determine if the property is a house in multiple occupation (HMO).

In the case, London Borough of Islington v The Unite Group Plc [2013] EWHC 508 (Admin), the judges were asked to rule how to count floors to calculate if an HMO needed mandatory licensing.

The Unite building was more than three storeys – which legislation says makes the property a HMO needing mandatory licensing.

The law requires mandatory licensing for an HMO or part of an HMO is three floors or more high and is home to five or more people in two or more households.

However, the High Court decided that the HMO must meet the definition, not the building that houses the HMO.

The distinction is particularly important in buildings split between commercial and residential use or in blocks of flats.

So, if a building has a commercial basement and ground-floor with self-contained flats above, HMO owners should count the commercial floors and the number of storeys in the flat, not the building.

Lawyer David Smith at Nearly Legal 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 cancels out previous case law from R v Roderick John Williams 2008, when Williams was prosecuted for letting an unlicensed HMO. His flat was above a basement flat and had two floors. The court found the building had three storeys, so his flat should have had a HMO licence.

 

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