Types of HMO license
Introduction
This article will be useful reading for all landlords who own an HMO. The article explains the types of licensing required.
Three schemes
There are three main licensing schemes that will be introduced under the Housing Act 2004:
- Mandatory HMO Licensing;
- Additional HMO Licensing;
- Selective Licensing
Mandatory HMO licensing
For certain categories of HMOs, all local authorities will be required to establish licensing schemes in their local areas (whereas under current HMO licensing, there is no compulsion on the local authority to set up a scheme if they do not feel it to be necessary). The current thinking is that such schemes will initially apply only to properties which comprise three storeys or more and are occupied by five or more persons, who comprise two or more households. The legislation has been carefully drafted so that the scope of mandatory licensing could be widened or restricted in future to include other types of building (e.g. two storey buildings) occupied by individuals who do not form a single household under the new HMO definition.
Additional licensing
Under the Housing Act, local authorities will have the right to formulate an additional licensing scheme for other types of HMO outside the mandatory HMO scheme.
For example, a local authority may decide that it wants to extend HMO licensing in the local area to all two storey HMO buildings occupied by three or more persons. There are certain conditions that have to be met; the local authority would be required to undertake consultation and gain approval from central government which must be conducted according to prescribed timescales.
Selective licensing
The Act also empowers a local authority to introduce selective licensing to all landlords in a particular local authority area. The intention of selective licensing is to provide a further control over the private rented sector, especially in run-down areas or areas where there are problems with anti-social behaviour arising from the activities of a landlord or his tenants. Again, subject to some simple controls such as consultation and approval from central government, a local housing authority will be permitted to require all private landlords in a particular area to be licensed. Before a licence is issued, the local authority will be able to undertake checks on the landlord for good character and any previous convictions. The local authority will also be able to specify minimum standards of management that must be met.
If a landlord owns a property that is already registered as an HMO, then there will be no requirement to apply again for another licence on the same property for selective licensing.
Many aspects of selective licensing remain to be finalised and we will report further on selective licensing in Letting Update as more details are available.
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