Houses in Multiple Occupation Licensing Policy

Introduction

The Housing Act 2004 defines a house in multiple occupation (HMO) as a dwelling which is;

• Occupied by three or more people
  • Who form two or more separate households
• Who share one or more basic amenities, such as a toilet and bathing or cooking facilities
  • Or lack one of the above
• Occupied by those persons as their only or main residence,
  • or they are to be treated as so occupying it
• Their occupation of the living accommodation constitutes the only use of that accommodation
• Rents are payable
  • or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation

Under Part 2 of the Housing Act 2004 there are two types of licensing schemes that relate to HMOs, these are the national Mandatory and Additional licensing.

Under the mandatory HMO licensing scheme all properties that meet the following criteria will require an HMO licence:

• Occupied by five or more persons;
  • Who form two or more separate households

and meets:

• The standard test under section 254(2) of the Act;
• The self-contained flat test under section 254(3) of the Act but is not a purpose- built flat situated in a block comprising three or more self-contained flats; or
• The converted building test under section 254(4) of the Act.

Additional Licensing of HMOs covers those HMOs that are not licensed under the Mandatory Scheme but where the Council has used its power to designate areas of the city subject to Additional Licensing of HMOs.

This document sets out the structure of the scheme and the fees and charges and criteria Coventry City Council will apply to all licences in relation to the Mandatory and Additional HMO Licensing schemes.

HMO Licensing in Coventry

Coventry City Council has a responsibility under Section 55 of the Housing Act 2004 to secure the licensing of all Mandatory HMOs and has been implementing its scheme in response to this duty since 2006.

On 4 May 2020 Coventry City Council also designated the whole of its area subject to Additional Licensing in respect of the following types of HMOs:

• HMOs of any size of building that are occupied by three or more persons that are not licensable under the Mandatory scheme; and
• S.257 HMOs where all of the self-contained flats are let and occupied by tenants.

The HMO Licensing schemes in operation in Coventry therefore cover all HMOs and all licence applications are to be accompanied with a fee determined by the Council. Once a licence is issued it is not transferable.

The Council has exercised its powers to charge under Section 63(3) and (7) of the Housing Act 2004 and does so taking into account the Provision of Services Regulations 2009, which themselves implement the EU Services Directive.

Under Part 2 of the Housing Act 2004, an HMO is required to be licensed unless:

• a temporary exemption notice is in force in relation to it under section 62, or
• an interim or final management order is in force in relation to it under Chapter 1 of Part 4.

The Council must take all reasonable steps to secure that applications for licences are made to them in respect of HMOs in their area which are required to be licensed under this Part but are not.

In the event that a building has multiple units of accommodation i.e. in the case of student ‘cluster’ flats, contained within it the Council will require a separate application and fee for each of the units within the building that constitute an HMO. The Council will consider each application on its own merits and will take the following factors into account before deciding to issue an HMO licence or not;

• The level of occupancy and the ratio of sharing one or more basic amenity i.e. a kitchen, toilet or bathroom;
• Whether each of the HMOs within the same building are within common ownership and management control.

Where it is identified that each “cluster” is an HMO within a building with other similar units of accommodation then the Council may decide that individual HMO licences should be granted for all of them. It will give notice of this to the applicant and every relevant person and there is a right to appeal this decision, notwithstanding the grant of these licences.

In cases of a registered `not for profit` charity i.e. Cyrenians or an individual housing provider, such as a private landlord or organisation who is assisting the Council by offering temporary or permanent accommodation to meet our homelessness duties applications will be accepted, for the particular property being provided without a fee being payable. This includes properties provided to the Council to prevent or relieve homelessness where there is a cost saving to the Local Authority from a reduction in Temporary Accommodation spend, i.e. Let’s Rent Scheme.

An assessment of the organisation will then be carried out and if appropriate the Council will determine the application and issue a licence without requiring any fee. Each case will be considered on its merits based on the type of individual or organisation submitting the application and the removal of the fee requirement will only be applied to the licence for the house being provided for homelessness purposes.

Licence fees

Section 63 of the Housing Act 2004 permits the Council to require any application for a licence under Part 2 is accompanied by a licence fee and that this fee may properly cover all costs incurred by the Council in carrying out its functions.

In developing its fee structure the Council has had regard to the European Court of Justice ruling in R (Hemming) V Westminster City Council (Case C-316/15) and the High Court decision in R (Gaskin) v LB Richmond Upon Thames (2018) EWHC 1996 (Admin) which held that the EU’s Provision of Services Directive, which is enshrined in UK law as the Provision of Services Regulations 2009 should apply to property licensing fees and the processes involved in implementing and delivering such schemes.

The Services Directive in particular should be interpreted as precluding charging in advance for costs other than those directly related to the authorisation process of the scheme. In other words, the Council is not permitted to demand fees in advance for anything other than the costs of administering the application for a licence. The Council may legitimately recover its wider costs, over and above those relating to the administration of applications, but this should be at the point at which the Council has determined that a licence is to be granted.

The judgements in Hemming and Gaskin, which require the overall licence fee to be paid in two stages, has therefore had the effect the fee for a Licence under Part 2 of the 2004 Act must be levied in two separate parts.

The Council is not allowed to demand fees in the Stage 1 process for anything other than the costs of administering and processing the application for a licence. Furthermore, this element of the fee is non-refundable should the application be unsuccessful.

In the case of Stage 2 payments these can only be requested if the initial application is successful and will be charged to cover the costs of running and enforcing the scheme.

As such the Council, when setting its fees, has adopted the two-stage approach. All fees and charges will be reviewed on an annual basis and the following tables set out those fees for the period commencing 1st October 2023. Fees and charges will be reviewed on an annual basis.

Under Section 67 (5) of the Housing Act 2004 the Council has the power to impose a restriction/ obligation on a particular person (with their consent). In accordance with this power the Council will require the licence holders consent to pay the Stage 2 fee in advance of the licence being issued, this will be required as part of the application process.

In addition, the Council will attach a condition to all HMO licences requiring this obligation to be met i.e. to pay the Stage 2 fee. This approach is consistent with that set out in the Hemming case.

Failure to make the Stage 2 payment will result in the Council taking action through, either the revocation or refusal of the licence or by enforcing the non-compliance of the licence condition associated with the making of the Stage 2 payment.

Processing the application

Under the Housing Act 2004 the Council can either grant or refuse a licence. In determining whether to grant or refuse a licence the Council must satisfy itself of the following:

• That the proposed licence and manager of the HMO is a fit and proper person and the most appropriate person to hold the licence; and
• That there are satisfactory management arrangements in place or that such arrangements can be put in place by the imposition of conditions in the licence.

Tests for fitness etc. and satisfactory management arrangements

Coventry City Council must be satisfied that “the proposed management arrangements are satisfactory” before granting an HMO licence. Those arrangements include (but are not limited to) consideration of whether:

• the persons proposed to be involved in the management of the premises have a sufficient level of competence to be involved;
• the persons proposed to be involved with the management of the premises are actually involved in the management
• those persons are ‘fit and proper’ (which is discussed above) and
• the proposed management structures and funding arrangements are suitable.

If there are concerns about the competencies and structures in place to manage the HMO then conditions can be imposed on the licence to ensure that the necessary arrangements are in place. However, if such conditions will still not be possible or practical to impose then it may be necessary to refuse to grant a licence.

It is for a Council to determine whether a person has sufficient competence to be involved in the management of HMOs and, of course, the level of competence required will in some measure be determined by the complexity of the management challenges posed. The Council will, therefore, be looking at the applicant’s experience and track record of managing HMOs and, in particular where he/she is the existing manager, the premises to which the application relates. In most cases landlords who belong to a recognised trade association or are members of an accreditation scheme will be regarded as having the necessary competence to be involved in the management of the premises because, at least such organisations can be called upon for advice and assistance where necessary.

The management structures must be such that the manager is able to comply with any licence conditions and deal with the day to day operation management issues that arise as well as being able to deal with longer term management issues. In considering whether the structures are appropriate the Council may take account of the following:

• evidence as to whether the systems in place are sufficient to enable the manager to comply with any condition of a licence or if such systems can be put in place through a condition of a licence to ensure compliance;
• evidence of the systems for dealing with:
  • emergency repairs and other issues
  • routine repairs and maintenance to the premises and its curtilage
  • cyclical maintenance
  • management and the provision of services (if any) to the building and its curtilage
  • management of tenancies or occupants
  • management of the behaviour of tenants, occupants and their visitors to the premises
  • neighbourhood issues (including disputes)
• evidence of structures for engagement with the local authority, police and other agencies, where appropriate

In order to be able to demonstrate much of the above evidence it is likely that the manager will need to operate within a reasonable proximity to the HMO, so that he/ she can attend to matters promptly and retain an overview on the condition of the premises and the management of the tenancies.

The Council must also be satisfied that the financial arrangements relating to the HMO are suitable. In that regard the manager must be sufficiently funded or have access to funding to carry out his obligations under the licence and his/her general management functions.

Coventry City Council can vary or revoke a licence at any time during the licence period if there is sufficient evidence to support these decisions. Unannounced visits of licensed properties will therefore be undertaken during the licence period to check for compliance with the licensing and management regimes which apply. This is consistent with the powers provided under Section 239 of the Housing Act 2004.

Breach of any such legislation is a strict offence for which further action will be taken. The Housing, Health and Safety Rating System (HHSRS) also applies to rented properties and (if appropriate) remedial works can be enforced via this legal mechanism separately to the powers provided under the licensing scheme.

The fit and proper test

In deciding to grant a licence Coventry City Council must be satisfied that the proposed licence holder “is a fit and proper person to be the licence holder …” and that “the proposed manager of the house is a fit and proper person to be the manager of the house …”

This requirement is to ensure that those responsible for operating the licence and managing the HMO are of sufficient integrity and good character to be involved in the management of the particular residential premises to which the application relates and as such they do not pose a risk to the health, safety or welfare of persons occupying and visiting the HMO.

When considering whether a person is ‘fit and proper’ Coventry City Council will have regard to any misdemeanours (wrong doings) of the relevant person concerned.

This is evidence that the person has:

• committed any offence involving fraud or other dishonesty, violence or drugs and certain types of sexual offences;
• practised unlawful discrimination on the grounds of sex, colour, race, ethnic or national origins or disability, in connection with the carrying out of business;
• contravened any provision of housing or landlord and tenant law; or
• acted otherwise than in accordance with an approved code of practice.

The above list is not exhaustive, and Coventry City Council can and will consider whether a relevant person has committed other relevant misdemeanours, for example, discrimination under Regulation 5 of the Equality Act (Sexual Orientation) Regulations 2007. A relevant person will not be deemed unfit, simply because of poor management, although this is highly relevant to determining any question of suitability or competence.

Coventry City Council do not adopt a blanket policy with its consideration of factors under a fit and proper person test. Each case will be considered on its own merits and regard will be had to information provided / omitted from an application form; historical information already held by Coventry City Council relating to the premises and / or any relevant person connected with the licence application.

In an application for a licence the applicant must provide details of the following in relation to him/herself and the proposed manager (if the applicant is not to be the licence holder):-

• unspent convictions;
• any findings of a court/tribunal that the person has practised unlawful discrimination;
• any judgement entered against that person in relation to a contravention of housing or landlord and tenant law (and, in so far it relates to the housing or landlord and tenant law, any contravention of any enactment relating to public or environmental health);
• any control order made in respect of any HMO under his/her management or ownership (and in respect of any former HMO he/she owned or managed);
• any enforcement action in respect of any house or HMO under his/her management or ownership (and any former HMO or house he/she owned or managed) under the housing health and safety rating system in Part 1 of the Housing Act 2004 so far as that enforcement action related to a category one hazard;
• details of any refusal to grant a licence, or details of the revocation of a licence granted for non-compliance of a condition or conditions in respect of any house or HMO under his/her management or ownership (and in relation to any former HMO or house he owned or managed);and
• details of any interim or final management orders made by an LHA in respect of any house or HMO under his management (and in respect of any former HMO or house he owned or managed).

An applicant for a licence must disclose any misdemeanours which relate to themselves, the proposed manager and any other relevant person, if any. Coventry City Council should therefore have sufficient information to decide a person’s fitness based on the application.

If Coventry City Council are not satisfied that it has sufficient information (being that supplied in connection with the application) to make a determination, it may require the applicant to provide further details and / or undertake their own further enquiries with other relevant Council departments and external bodies as it deems necessary, including for example Disclosure & Barring Service checks (DBS).

The completion and signing of the Licence application form will be taken as an agreement to any such action and the sharing of information between other Local Authorities for all relevant persons associated with the property and application.

Checks will also be made internally with other Council departments such as Licensing, Trading Standards, Planning, Building Control, Council Tax and Housing Benefit.

Coventry City Council are also able to request information on criminal convictions, and although this is not undertaken as a matter of routine a Police National Computer (PNC) check will be requested where there is sufficient evidence that this is necessary. A PNC check may also be requested for the purposes of officer safety during the course of the licensing application should this also be considered necessary.

Such reasons for a PNC check may include that:

• Coventry City Council have evidence of a history of complaints or problems with the landlord (which in themselves might not amount to ‘evidence’ of unfitness to meet the test), but further investigation may be required;
• the applicant has been evasive or untruthful in their application for a licence;
• the applicant, or proposed manager, is unknown to Coventry City Council and has not demonstrated any history or competence of managing HMOs or other private rented properties;
• Coventry City Council has reasonable grounds to suspect that the applicant, or the proposed manager, has committed an offence which is relevant to the determination of any question of his/her fitness; or
• The premises provide accommodation mainly to vulnerable persons. In deciding whether a misdemeanour (including a criminal offence) is relevant to the determination of a person’s fitness a Council may wish to consider the following factors:
  • the relevance of the misdemeanour(s) in relation to the person’s character and integrity to manage residential premises and in particular the type of premises to which the licence relates;
  • the seriousness of the misdemeanour(s) in terms of impact, or potential impact, upon the residents and the wider community, including if more than misdemeanour has been carried out the cumulative impact;
  • the length of time since any misdemeanour; and
  • any mitigating circumstances.

Consideration of 'Persons Associated or Formerly Associated' with the proposed licence holder or manager

If there is evidence that a person associated, or formally associated, with the person proposed to be the licence holder or manager of the HMO, has committed any misdemeanours, that evidence may be taken into account in determining the proposed licence holder’s or manager’s fitness (even if that person has himself or herself an unblemished record).

The purpose of this requirement is to ensure that only fit and proper persons hold licences or are in any way involved in the management of licensed HMOs. It would not be appropriate for a licence to be granted to someone, or for someone to be the manager of a property, if that person was merely acting as a ‘front’ for someone else who, if he or she were not unfit, would be entitled to be the manager or licence holder.

An example might be that of a husband and wife, where the husband is the landlord (or indeed both he and his partner are joint landlords), but only the wife has applied for the licence. If there is evidence that the husband has committed misdemeanours and those misdemeanours are relevant to the wife’s management of the property or licence, then the Council may refuse to grant her a licence.

Likewise, if a landlord with an unsatisfactory record nominated a” manager” who had a clean record but had acted for him whist the misdemeanours were committed, Coventry City Council may consider the managing agent by association to be unfit too.

Issuing a licence

All HMOs subject to licensing will be inspected prior to the issuing of a draft licence to ensure that the HMO is reasonably suitable for occupation by the number of people being requested on the licence application and to ensure that there are satisfactory management arrangements are in place.

All HMOs will also remain subject to further inspections during the lifetime of the licence to check compliance with licence conditions, management responsibilities and minimum standards. In certain cases, the Council may decide to carry out such inspections without prior notice being given to the owner, licence holder and /or manager. This is consistent with the powers set out in Section 239 of the Housing Act 2004.

Failing to comply with any conditions on a licence is an offence under Section 72(3) of the Housing Act 2004 and, if found guilty the licence holder could face a prosecution or issued with a Civil Penalty of up to £30,000.

In cases where the licence is being issued to or on behalf of a landlord who has been found to be operating an unlicensed HMO the first licence will run for one (1) year and the licence must be renewed before it expires. After the first year, the opportunity will be provided to apply for a longer licence, provided all the relevant criteria is met.

The Council considers this approach is justified in furtherance of the overriding public interest of improving the standard of rented properties and their management.

Where the inspection has been pre-arranged then all applicants will be required to provide access to all rooms in the HMO at a suitably arranged appointment.

All contact with the licence holder and relevant person(s) will be made using the contact information provided by the applicant on the original application. Accordingly, it is the licence holder’s responsibility to ensure that all contact details are up to date and you must notify the Property Licensing Team of any change in details. The Property Licensing Team will not be held responsible for any delay in communication if it is as a result of any contact information changing.

A draft licence with conditions will be issued based on the findings from this inspection. The draft licence (known as an Intention Notice) will be emailed to all relevant persons and other interested parties for consultation.

The relevant persons will have an opportunity to make any representations, which will be considered by a Senior Officer.

When this process is complete a full licence with the conditions (known as the Decision Notice) will be issued. Again, copies will be sent to all interested parties.

If the licence holder is still dissatisfied with the conditions of the licence, they will have an opportunity to appeal to the First-tier Property Tribunal. The details of how this appeal can be made will be provided with the Licence

Renewal applications

The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (Amendment) (England) Regulations 2012 set out amendments to “renewal applications”, which reduces the burden on landlords applying for the renewal of a licence.

In the case of renewal applications and applicant must provide a complete application form and sign the declarations provided.

It is important to note that the regulations define a “renewal application” as “an application for a licence under section 87 of the Act where, at the time the application is made a licence of the kind applied for is already held by the applicant and has effect in respect of the HMO or house”.

The effect of this part of the Regulations is that in order for the Council to treat any application as a “renewal” the application must be made during the active period of the current licence. If a renewal application is received on or after expiry of the current licence, then the application will be treated as a new application and the appropriate fees above will apply.

Application for a revocation or variation of a licence

If circumstances regarding the HMO change during the licence period, for example a change in the number of letting units, the licence holder must notify the Property Licensing Team directly so the licence can be re-assessed and varied if the HMO is considered suitable to accommodate the variation request.

Similarly, if the HMO is no longer going to be occupied as an HMO or the licence holder changes, then the licence holder must make an application for the licence to be revoked. Any remaining period of the licence will be forfeited and there will be no right to a refund of the original payment.

Licence criteria

A valid application consists of:       

• An application form submitted
• Fee payment
• Signed declaration returned

Once a valid application is received the Council will assess each application on its own merits against relevant criteria. The Council has discretion to offer any length of licence it considers appropriate and upon receiving a valid application will take account of the following factors before a decision on the length of licence is made:-

• Previous history (if any) - timely licence applications; compliance with previous licence conditions; outstanding licence conditions; satisfactory certificates provided; history of non-compliance with other council departments i.e. planning;
• Management and maintenance of the HMO – history of previous formal action taken by the Council where there have been concerns about management or poor property conditions;
• EPC Rating – minimum rating of EPC E or above is a legal requirement;
• Provision of a Fire Risk Assessment;
• Accreditation; and
• Adherence to the principles set out in the Private Rented Sector Code of Practice

In the case of Managing Agents (with sole or joint management responsibility) the following criteria will also apply:-

• 50% or more of the company’s employees are suitably qualified in property management;
• All employees carry out regular continued professional development; and
• The company is registered with a recognised professional association

Should any issues arise, or new information be discovered after the licence is issued, Coventry City Council reserves the right to revoke the licence. If any relevant person is found to have provided false or misleading information or made a false declaration, we may take enforcement action against them separately.

It is the responsibility of the proposed licence holder and manager(s) to meet all the eligibility criteria for the licence and provide all necessary evidence when requested. If all requested documentation is not provided in time, the Council will automatically assess the application based on the evidence we hold and issue a licence accordingly.

One-year licences

Licence renewal

It is important that a renewal application is submitted before expiry of the current licence otherwise it may be determined that this is a new application and additional information will be required. A different fee may also apply to reflect the increased time involved in processing the application.

We aim to issue a new application within 20 weeks from the date of application (due to Coronavirus, we have extended deadlines for landlords and therefore have extended the processing time – it was previously 18 weeks). Issuing a licence within this time frame is dependent on the landlord supplying the required information and payment within timescales and that no representations are made. Where information or payments are late, or representations made, then the processing time will be longer. Tacit consent does not apply given that we have to check the HMO meets the prescribed standards. If you have not heard from us within 20 weeks, then please contact us.

Fire Risk Assessments for licensed HMOs

Having a fire risk assessment for a licensed HMO is a legal requirement under the Regulatory Reform (Fire Safety) Order 2005, which is enforced by West Midlands Fire and Rescue Authority.

The duty is placed on the ‘responsible person’ who could be the landlord/licence holder or an agent with full management control. The assessment must be ‘suitable and sufficient’, and assistance from an appropriately competent person should be sought as necessary to achieve this.

The Council will accept signed self-certification forms declaring that a suitable and sufficient fire risk assessment is in place for the HMO, however the Council may request and audit the fire risk assessment and other records at any time during the lifetime of the licence. If any documents requested cannot be provided within 7 days of the request, the Council may revoke the licence.

The acceptance of a fire risk assessment/self-declaration does not protect the responsible person from any action required by West Midlands Fire and Rescue Authority.

Further information and guidance on completing a fire risk assessment is available from the Gov.uk website.

Coventry Landlord Accreditation Scheme (CLAS)

The Council has developed its own accreditation scheme called Coventry City Council Landlord Accreditation Scheme (CLAS).

Being accredited by the Council is one step toward being eligible for a five-year licence.

Further details of the Council’s accreditation scheme or you can email the Property Licensing Team to find out more information clas@coventry.gov.uk for further information on becoming accredited.

Public Registers

A register of HMO licences is available online and details of this can be obtained by sending a formal, written request to the Property Licensing Team.

Appeals

If an application for an HMO Licence is refused, there is a right to appeal this decision within 28 days to the First-tier Tribunal (Property Chamber - Residential Property). The details of this will be provided with the Decision Notice.