Everything You Need to Know About Additional Licensing for HMOs
There are several intricate local council rules and regulations that apply to homeowners and landlords in particular. One of these complex norms is landlord licensing. To save you time and the hassle of reviewing detailed legislation, we’ve put together a comprehensive guide to additional licensing.
As of 2019, the majority of London Boroughs have started applying additional licensing schemes. Our letting estate agents are well aware that these new regulations have made landlords feel worried and have got them struggling to understand if and how they are affected by these changes. Read on to find out everything you need to know about additional licensing.
What Is An Additional Licensing Scheme?
According to Part II of the Housing Act 2004, each council is allowed to introduce additional licensing schemes to HMOs (Houses in Multiple Occupation) that are not included in the scope of the mandatory HMO licensing scheme.
An additional licensing scheme can be introduced by a local council if a substantial percentage of HMOs in their jurisdiction are ill-managed. Councils make these decisions due to the fact that improperly managed HMOs can create issues that affect both the tenants and the members of the public.
According to applicable law, local councils may take such decisions for implementing additional licensing schemes only in support of their general housing strategy. Before introducing such a scheme, the council must deliberate and reach the conclusion that this is the only possible course of action. And that introducing an additional licensing scheme will help the council combat community issues such as abandoned properties and homelessness or anti-social behaviour.
In order for an additional licensing scheme to be implemented, it must meet all the requirements of the Housing Act 2004. In addition, anyone who will be affected by the scheme must be consulted over a period of at least 10 weeks
Does the Additional Licensing Scheme Apply To Me?
To answer this question, you must first determine whether or not your property is defined as an HMO.
The Government website says that if your property is let out to “several tenants who are not members of the same family”, it may fall under the definition of ‘House in Multiple Occupation’ (HMO).
An HMO is a property, be it a house or a flat, that hosts at least 3 tenants who form more than one household and share facilities such as the toilet, bathroom, or kitchen. For the purposes of this definition, a household is considered to be either a single person or several members of the same family who live together.
When it is occupied by 5 or more people, an HMO must hold a licence. In addition, local councils can decide to introduce other types of licensing referred to as additional licensing.
If you’ve determined that your property is an HMO, you must now determine whether or not the borough where the property is located has any additional licensing schemes in force.
Different councils can have different schemes and some may not even apply to the entire borough, but to certain areas. For instance, the Tower Hamlets additional licensing scheme does not apply to properties included in the Selective Licensing areas of Spitlafields and Banglatown, Weavers, and Whitechapel. To fall under the additional licensing scheme, the property must have 3 or more tenants living as 2 or more households. Furthermore, out of the minimum three tenants, at least one person must be paying rent.
In Newham, the Council has decided that all HMOs fall under the requirements of the additional licensing scheme with only a few statutory exemptions. In Hounslow, the additional licensing scheme only applies to properties that are 2 or more storeys high and occupied by four or more people in two or more households.
How Do I Find Out If My Local Council Introduced an Additional Licensing Scheme?
Ideally, there would be one centralized database for all additional licensing introduced in each of the London boroughs. Unfortunately, no such central directory has been created until now.
To find out if an additional licensing scheme is in effect in your borough or for your property, you will need to check with your local council by phone or on their website.
Are There Any Exemptions from Additional Licensing Schemes?
Depending on the borough where the property is located, different exemptions may apply. However, some statutory exemptions apply across all boroughs.
These exceptions are:
- HMO properties that are already required to hold a licence according to the mandatory HMO licensing scheme;
- Properties occupied by the owner and no more than two additional lodgers;
- HMOs occupied by only two tenants who form two households;
- Properties in which management has been taken over by the council. This can happen subject to an Interim or Final Management Order as per Part 4 of the Housing Act 2004;
- Properties occupied by a religious community whose primary purpose is prayer, education, contemplation, or relief of suffering;
- Any property that is under a temporary exemption notice;
- Any property that is exempt for being a student hall of residence;
- If the property is managed by either a local housing authority or a registered social landlord. It can also be managed by police, fire & rescue authorities, or health service bodies;
- Properties that are already regulated according to certain other statutory provisions (such as Schedule 1 to SI 2006 Number 373)
If you want to know more about how additional licensing schemes can affect you and your property, contact our lettings estate agents today.