24 May 2021

Converted buildings are frequently “section 257 HMOs” under the Housing Act 2004.  As such they must comply with the HMO Management Regulations for s257 HMOs and increasingly, councils are requiring the building  to be licensed under their Additional Licensing Schemes.  “This applies  to the building and not the individual flats. Each flat with 3 or more sharers will likely also need a separate s254 HMO licence too. It’s imperative to understand this or seek professional help, said Phil Turtle, compliance and licensing director at Landlord Licensing & Defence.

The Upper Tribunal has allowed a borough council’s appeal over whether a property was a house in multiple occupation (HMO).

Hastings Borough Council appealed a decision of the First-tier Tribunal on a preliminary issue in proceedings brought by the respondent, Ms Turner, who is a joint registered proprietor of the freehold of the property.

She had appealed to the FTT against the grant of an HMO licence in respect of the property, a five-storey, late Victorian house in St Leonards on Sea. The property, which was converted decades ago, has five floors and five flats.

The council had put in place an additional licensing scheme in 2017. In or about February 2019 it wrote to the freeholders (individually) to say that they needed to apply for an HMO licence.

On 19 March 2019 Mr Lawson, who owns two flats in the property, applied online for an HMO licence, stating that he was the person managing the building and that he was applying on behalf of the four freeholders who would be the licence holder.

When asked whether the conversion to flats complied with the 1991 Building Regulations (or later), Mr Lawson answered “no”.

When the council gave notice to the freeholders to say that it intended to grant an HMO licence, Ms Turner wrote back to say she objected to the grant because of the financial burden it would impose upon her.

In July 2019 the council notified her that it had decided to grant a licence.

The FTT decided that the property did not require a licence because it was not a house in multiple occupation for the purposes of s.257 of the Housing Act 2004. The tribunal judge also said it was up to the council to establish, on the balance of probabilities, that the building came within the definition in s.257.

In Hastings Borough Council v Turner (HOUSING : HOUSE IN MULTIPLE OCCUPATION) [2020] UKUT 184 (LC) the local authority argued that the judge had misunderstood s.257 and also that evidence provided by Ms Turner was sufficient to establish that the definition was met.

Judge Elizabeth Cooke found that the FTT was in error when it said that the building work had to comply with the 1984 Building Regulations; the FTT made a mistake because it did not refer to section 257(3) of the 2004 Act.

“If the building work failed to comply, and still does not comply, with the 1991 Building Regulations then it is an HMO. All the points set out in the section, and in my paragraph 27 above [covering the definition of an HMO], are met and nothing else is relevant.”

Judge Cooke also said that it was for Ms Turner to prove that the property was not an HMO within the definition of s.257; the FTT had been in error when it said that it was for the council to prove it was.

“The respondent has not offered any evidence at all that the property met, or meets, the standard of the 1991 Building Regulations. All she has said is that she cannot see why the standards of the 1991 Building Regulations would not have been met. She has provided no evidence and no reasoned basis for her assertion that the property is not an HMO, and the FTT was in error when it found in her favour on the preliminary issue,” the judge said.

Judge Cooke set aside the FTT ruling on the preliminary issue and substituted the UT’s own decision, which was that the property fell within the definition of an HMO in section 257 of the 2004 Act and, because of the appellant’s designation of the area in October 2017, required an HMO licence.

She added: “I am sorry that I have had to deal so briefly with a matter that has caused the respondent so much distress. I have tried to set out the legislation clearly so that she can see what the statute requires. There are clearly further issues to be addressed because it is a matter for concern that the person designated in the licence as the manager of the property – a company controlled by Mr Lawson – is one to which one of the freeholders has such vehement objection, but that is not a matter on which I can make any decision. No doubt the FTT will give directions for the determination of the appeal in the light of that decision.”

The judge also did not think that the grant of the licence was going to cause the problems that Ms Turner anticipated.

“Most of the property is not owner-occupied, and the licence introduces protection and safeguards for those who rent the other flats. I do not believe that it will invalidate her mortgage. I do not believe that it is an infringement of her human rights,” she said.

“One of the purposes of HMO licensing is to tackle anti-social behaviour, and it may be that some of the problems the respondent says she has experienced with her neighbours may be able to be resolved as a result of the local housing authority’s involvement.”

Link to original article

Help and Advice

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