Offences relating to licensing.
There are a number of measures in law aimed at ensuring compliance with the HMO Licensing Regime. Offences are:
- failure to licence a HMO
- exceeding the number of occupants specified in the licence, and
- failure to comply with any conditions specified on the licence
Any person involved in the control of an HMO may be subject to prosecution for failing to licence a HMO with the Local Authority. Fines for non compliance can be severe (up to £20,000). In proceedings against a person for this offence, it is a defence that a full application had already been made but not yet decided upon. In all cases it is a defence that there was a reasonable excuse for non compliance.
Failure to comply with the conditions of the licence may result in the Licence Holder being prosecuted in the Courts and fined up to £5,000.
Further consequences to not applying for a HMO licence.
- In addition to the above, any tenant of an 'unlicensed HMO' may make an application for a Rent Repayment Order. This can result in the landlord having to pay back up to 12 months worth of rent to the tenants
- No 'section 21 notice' may be given in relation to a short-hold tenancy of a part of an 'unlicensed HMO' so long as it remains such an HMO - [section 21(1)(b) or (4)(a) of the Housing Act 1988 (c. 50) (recovery of possession on termination of short-hold tenancy)]
- Where the Local Authority is satisfied that there is little likelihood of an HMO becoming licenced, it is under a duty to take over the management of the property until such time as a satisfactory licensing arrangement can be found. This is done by way of an Interim Management Order (IMO) for up to a period of 1 year. This means that the property passes to the Local Authority in all respects, however the Local Authority cannot dispose of the property or assign new tenancies (without agreement). Costs incurred by such actions are recoverable by the Local Authority from the owner. It is intended that IMO's are used by a Local Authority to ensure the appropriate management of properties that are not licensed and to ensure:
- Immediate steps are taken to protect the health, safety or welfare of the occupiers of a house or
- Immediate steps are taken to protect the health, safety or welfare of the other occupiers or landowners in the neighbourhood; and
- Any other appropriate steps are taken to ensure the proper management of the house until such time as the HMO can be licenced or otherwise a Final Management Order is made
- The Local Authority may also issue a management order where it needs to do so to protect the occupants or neighbours of an HMO from 'harm' (other than that due to physical conditions). Illegal eviction of occupants may be considered as 'harm' for these purposes
- The IMO may be followed up by a Final Management Order (FMO)for up to a period of 5 years where the landlord has been unable secure the appropriate licensing of a HMO whilst an Interim Order is in place. Unlike an IMO, a FMO does not need the consent of the landlord before creating new tenancies, the landlord cannot exercise any management functions or grant tenancies
- There may be other legal consequences (depending on the insurance cover obtained and the mortgage agreement in place etc.)
- Landlords or managers prosecuted for failure to licence an HMO or for breach of a licence condition are also likely to find themselves deemed NOT a 'fit and proper person' and as such they will be unable to obtain an HMO licence on any other property they are in control of