Even the most experienced of Landlords could find it difficult to master all the steps in their application for an HMO licence. The HMO and selective licensing regime is one of the most convoluted regulatory mechanisms. Application forms are long and complicated. Licences and their conditions are often twenty pages long. In this article, we look at the key stages in an HMO / Property Licence application and options available to those who disagree with a proposed condition.
The initial applicationThe application form can be long and complex. You may wonder why the Council is asking about the number of hand wash basins in an HMO. Whether or not 10 plug sockets are necessary in a kitchen, you must complete this form accurately. If you submit any wrong information here, you’ll likely be found out during one of the inspections carried out during your licensing period. It’s definitely best to get this right from the outset.
The council's tests and amenity standardsThe tests are essentially as follows:
- Is the property fit for the maximum number of persons who are proposed to live there?
- Are the management provisions/structures adequate?
- Is the proposed licence holder and persons involved in the management "fit and proper"?
Some councils haven't updated their amenity guidance for years and this means they can be outdated in some areas. Often they don't match up with requirements of HHSRS. Unlike the HHSRS regulations, council amenity guidance don't have to be strictly complied with. Falling just short of an amenity guidance standard may be acceptable. Sometimes it's worth the argument. If there are 5 people in a property you are likely going to need a toilet separate from the main bathroom, with a basin in the WC. Consider the pressure on the facilities at peak times when people tend to get ready for the day.
The proposed licence
There are only five or so mandatory conditions or requirements that the council must include. The rest are optional and you are within your right to ask for them to be removed if you consider them to not be applicable. If your local council demands more than nearby local authorities, it's worth raising this with your council. But pick your fights.
They may wish you to provide fire safety equipment if they consider it inadequate or heating provision or systems should there be inadequate heating in the room. The council may put a time limited condition requiring the licence holder to increase the amenities if they consider them inadequate. They can't, however, put on a condition for issues that should be dealt with under HHSRS. These should be dealt with separately under Part 1 of the Housing Act 2004.
The applicant's response ("representations")
This is the applicant's opportunity to vent their frustrations if something is unreasonable. As with most things, do your homework first. Consult a landlords forum or an HMO consultant. Some good advice can save you thousands in renovation costs. Always consider alternative options before going ahead with any renovation.
An example might be where a room is considered too small. Argue the point if extra space is available in the eves of a loft conversion or elsewhere in the house. Some councils demand 10 square metres for a single person bedroom. This is way above the national minimum standard of 6.52 square metres. If you do have to comply, consider different ways to increase the floor space of a room after consulting a structural engineer.
Most importantly, you should maintain an open line of communication and put your representations into writing, with drawings and floor plans if necessary. If you aren’t able to, employ a consultant. Good advice can save money and even increase rental yield in the long term.
The council's consideration of those representations
The council must then consider the representations, your response from the previous stage. Their response must be in writing and they have the ability to continue with their proposed condition and risk a tribunal, or issue an amended draft licence agreeing either to your proposal or possibly a compromise somewhere between.
If your application is close enough, they are less likely to risk a tribunal. Tribunals are time-consuming. If they are asking for more than their neighbouring councils, they may accept your proposed lower standards or compromise.
The council's response to the representations
If the council shares an amended draft licence in response to your representations, you have to make representations to the amended draft in a time-limited period. When the council have your second response, they would issue a final licence.
Variations to licences can be applied for, for free, at any time during the process, usually for what are called material changes like use, layout and occupancy (i.e. number of tenants or households). You will be issued a Varied Licence if approved.
The applicant's appeal to the first tier tribunal
If you still disagree with a licence condition, you may appeal to the higher authority, the first tier tribunal. This costs a bit over a few hundred pounds. If you have acted reasonably in the previous stages, you stand a fair chance of winning. Keep your negotiation lines of communication open. Council officers are reasonable people, even though it may not seem it at the time, so it's best to show that you are, too. If it's a minor point over a grey area, the council may agree to back down or compromise. Get someone to assist with your tribunal if you are inexperienced.
Tribunals can be daunting affairs for the inexperienced. You must always comply with the requirements of the officers and judge working on your case. This means supplying your argument coherently in a timely fashion within the timescales given by the tribunal judge. Otherwise, it will get thrown out. Be open and transparent and seek expert advice if you aren't sure.
If you are thinking of selling your property because of the requirements for your property licence, don’t go ahead without consulting an expert first. They can analyse your case and might be able to see something you’ve missed. This could help you avoid losses or even make more money in today's turbulent property sales market.
Bottom line - Don't just accept what the council tells you.
By now, you should be aware that an entire book could be written about this topic. If you’re facing a particular case, take advice from an experienced professional such as a consultant at HMO Services or a solicitor specialising in the area. This article is only an overview on a complicated issue.