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HMO Course

HMO landlord courses

What will I learn with this HMO Course?

Know the definition an HMO

• To understand the reasons & principles of licensing

• Understand discretionary licensing

• Examine necessary procedures for licensing

• Understand the license conditions

• Understand methods for making Management Orders

• Understand HMO enforcement protocols

• Requirements to run and manage an HMO

• Understand HMO Council tax

• Risk assessment

• Implications of Common areas and Covid-19

• HMO tenancies – insight

• HMO and Deposits

• Repair obligations

• Overcrowding

• HMO and EPC’s

What is an HMO:

The definition of an ‘HMO’ which stands for “House of Multiple Occupation” or “House in Multiple Occupancy” sometimes the term’ house share’ is used.

An HMO is any property with the following combination(s) of tenants;

· three or more tenants

· with shared facilities like a bathroom or kitchen

· Or more than one household

A household is defined as;

· A single person, or several members of the same family who live together.

· Each tenant from a separate family is classed as a separate household.

The definition of ‘family’ is defined as:

· Married couples who live together

· Two persons living together

· Including couples in same-sex relationships

· Relatives or half relatives count as the same ‘family’. This includes; grandparents, stepparents, aunts, uncles, siblings & step-siblings.

EPC for HMO’s

From 1 October 2008 landlords were required by law to provide an Energy Performance Certificate (EPC) for all buildings or parts of buildings when they are rented.

HMO’s generally do not require an EPC for each unit. The definition of the HMO will need to be carefully checked when deciding if an EPC is required.

HMO Council tax 

In an HMO containing bedsits or where tenants are paying rent for individual rooms on individual tenancy agreements, it is the landlord who is liable to pay Council Tax.

If the Council Tax increases, this does not create an automatic right to increase the rent. Rents cannot usually be increased more frequently than once a year. A landlord can include a term allowing an increase of Council Tax element in line with Council Tax rise in the tenancy agreement. In an HMO where the tenants are renting the house on one joint tenancy as a group, they will be liable to pay the Council Tax unless there is a clause in the tenancy agreement to say otherwise.

However, it is worth noting that some local authorities still differ in how they classify HMOs. This means that HMOs may be deemed either as a single dwelling or several separate units.

This complicates the matter of liability for landlords. In some areas buildings that had previously been treated for council tax purposes as single units (for example HMOs) have been disaggregated and reclassified as multiple units.

The Council Tax payable on vacant properties may depend on whether the property is furnished or unfurnished. Some councils charge council tax on empty properties to deter landlords leaving properties vacant.

Who should pay Council Tax?

All residential properties in England and Wales are liable for council tax.

If the tenancy agreement (this refers to a non-HMO) stipulates that council tax payment is the responsibility of the tenants, then the landlord should not be liable for unpaid debts.

Without evidence of a signed tenancy agreement, it may be challenging to convince the council of your exemption.

Landlord Council Tax Exemption

Some properties and tenants are either exempt from paying council tax or are eligible for a discounted rate.

For example, if there is a mix of full-time students and one adult, there may be a 25% discount.

Who Is Exempt from Council Tax?

There are certain groups of people who are exempt or eligible for a discounted council tax bill:

  • Single occupants of property receive a 25% discount
  • Full-time students are exempt
  • Live-in carers are exempt
  • Tenants below the age of 18 are exempt

Properties solely inhabited by tenants under the age of 18 receive a 50% discount.

Overcrowding

Councils were given new powers from April 2020 under the Housing and Planning Act 2016 which introduced civil penalties of up to £30,000 as an alternative to prosecution for certain offences under The Housing Act 2004, which includes overcrowding.

HMO Tenancy Deposits

It is a legal requirement for the landlord to protect the deposit for an HMO with an assured shorthold tenancy. In the case of a lodger or a licensee, then there is not usually a requirement to protect the deposit.

Landlords Repair Obligations

Landlords must repair and maintain basic utility systems

to be fit for living; a property must offer essential utilities. The property owner must provide in proper working condition installations for the supply of:

Electricity

Landlords must provide functional and safe fixed electrical installations. Those include, but might not be limited to the following:

  • Wiring circuits
  • Switches
  • Sockets,
  • Light fittings
  • Circuit boards

Regular checks are required to ascertain electrical wiring is in good working order. When a malfunction is found, it must be repaired with higher priority, as electrical safety is critical to the tenant’s safety. The Electrical Safety First recommends landlords to carry out installation inspections every five years. These inspections must be performed by a registered professional. For HMO landlords, these inspections are mandatory.

Provided the landlord has supplied electrical appliances, they must ensure they are in working order.

Such appliances include:

  • Refrigerators
  • Washing machines
  • Dryers
  • Television and audio systems
  • Electric cookers
  • Kettles
  • Toasters

However, the landlord is not responsible for any electrical appliance that is the property of the tenant. Their maintenance is at the discretion of the tenant.

Gas

Gas safety is at the highest priority in rented properties. All gas appliances, fittings, installations, pipes, and flues must be kept in perfect working condition. This applies to communal and private areas, regardless of whether tenants have access.

All landlords are required to arrange an annual gas safety check by a Gas Safe registered engineer. The certificate must be made available to every tenant before moving in and must be kept for at least two years.

It is illegal for anyone to use unsafe gas equipment knowingly. Treat the matter with the highest regard! Always require the gas safety certificate before renting a property.

Water

The landlord must provide facilities with running water. This cover:

  • Basins
  • Sinks
  • Baths
  • Showers
  • Water tanks
  • Cisterns

A landlord should ensure all plumbing systems, pipes drains, and sewage is in good order and functioning correctly. Water systems and facilities must be kept in good condition during the rental period.

A professional plumber should fix leaks, and at the initiative of the landlord, smaller repairs, like unblocking drains, can be done by the tenant, if they can do so.

Heating and hot water installations

The landlord must repair and keep in working condition the heating and hot water installations. A certified Gas Safe engineer must annually check gas boilers and heaters.

Electrical boilers and heaters must be inspected every five years or less.

However, simple maintenance the tenant would like to bleed heating radiators. Bleeding the radiators relieves the system of trapped air and improves power and efficiency.

Sanitation

Properties must always maintain sanitation facilities in perfect condition, such as the toilet and bathroom. It is rather apparent how essential having access to a working toilet is.

The most common problem is blocked drains, which is mostly an easy fix for the tenants themselves. However, there can be more severe plumbing problems. The landlord must take the initiative and arrange repairs with higher priority.

Fire and Smoke Alarms

Landlords must ensure there are fire, smoke and CO2 alarms installed and working on every level of their property. The batteries should be regularly checked and changed by tenants. If any alarm is still malfunctioning, the landlord should be notified and asked for repairs.

Landlords must repair and maintain the structure and exterior of the property.

Roof and guttering

Landlords must ensure the roof of their rentals is in good working order. There should be no leaking areas or damp dripping through the tiles.

Roof support beams and internal construction should be inspected for rot and treated accordingly. If there are loose tiles, those should be fixed, as to prevent misfortunate incidents.

Guttering should be regularly inspected and cleaned from leaves, sticks and other materials. A blocked gutter can spill all its water onto the exterior walls and cause severe water damage. Rain gutters should be properly connected with no water dripping from the seams.

Damp and mould are a frequent problem in the UK and is hard to treat effectively and permanently. All causes for damp and mould should be dealt with before letting.

Drains and exterior pipes

Out-flowing drains and pipes should be inspected and maintained as to prevent spillage of wastewater on the property.

Exterior walls and foundations

Walls and foundations should be treated for cracks and deformation. Such problems should only grow worse in time, so the faster they are repaired, the better. The landlord is fully responsible for fixing problems with the structure and load-bearing elements of the property.

Interior walls, ceilings, and floors

Tears, cracks, and holes in those as mentioned above should be treated before letting a property. Depending on the tenancy agreement, the tenant can be responsible for decoration or repainting at the end of the tenancy.

This should be negotiated and agreed upon at the start.

Any damage to the interior (including mould) caused by problems in areas assigned to the landlord to maintain also becomes their responsibility.

Windows and doors

Windows and doors, especially outer ones, should close adequately and seal tightly. Landlords are obliged to repair:

  • Screeching hinges
  • Eroded sealants
  • Malfunctioning handles and locks
  • Rotten window frames
  • Broken glass

Some of these repairs are easy enough to be handled by the tenant. Coordinate it with the landlord to prevent conflicts.

HMO Tenancies

Landlords and agents need to consider what type of tenancy applies to a particular HMO before letting.

If the tenant has exclusive use a kitchen, bathroom and the unit is self-contained the correct tenancy may be an assured shorthold.

If the tenant shares all facilities with other tenants and has no exclusive use of the facilities, it may be the correct document to use is a licence.

Determining the correct tenancy means you know what notice to serve section 21 or a Notice to Quit?

Depending on the tenancy/Licence, you will be able to determine if you need to protect the deposit under the tenancy deposit scheme.

You should seek legal advice if you have any doubt which tenancy is applicable.

When completing a template tenancy, you must read the tenancy thoroughly and alter the text, terms, and conditions to reflect the unit in the HMO being let.

You should pay specific regard to elements referring to:

  1. Utility bills
  2. Parking
  3. Common areas
  4. Cleaning 
  5. Common areas
  6. Belonging on the stairs or stairwells like pushbikes, prams etc. 

Mandatory Licensing

Comprises 3 or more storeys; Is occupied by 5 or more people living in 2 or more households; and. Contains shared facilities such as a kitchen, bathroom or toilet.

HMOs subject to mandatory licensing – Pre 1 October 2018

Note; ‘Occupant’ is not defined in either the pre or post-October 2018 rules and children of any age will contribute to the number of occupants.

 Pre 1 October 2018 mandatory licensing applies to HMOs on the following definitions:

· standard test

· self-contained flat test

· converted building test.

It will also apply where a building (or part of a building) is subject to an HMO declaration.

An HMO on one of the above definitions will have to be licensed if it comprises three or more storeys with five or more occupants forming two or more households.

The word ‘storey’ is not defined in the legislation, but the following are to be included:

· basements and attics used or adapted for use as living accommodation

· basements that contain the main entrance to the building

· each storey of a business premise where the living accommodation is above or below business premises

· a mezzanine level wholly or mainly used as living accommodation.

It is the storeys in the HMO, that are counted, not the number of storeys of the building in which the HMO is located. Floors, within the HMO, consisting of stairs, lobbies or hallways not used, wholly or partly, as living accommodation are not counted, as storeys.

Mandatory licensing from 1 October 2018

From 1 October 2018, mandatory licensing applies to buildings defined as HMOs on the:

· standard test

· self-contained flat test (unless it is a purpose-built flat within a block comprising three self-contained flats or more)

· converted building test.

Where a building (or part of a building) does not meet one of the above tests but is subject to an HMO declaration, it will not require a licence.

Licensing will be required where the HMO is occupied by five or more persons living in two or more separate households. There is no requirement as to the number of storeys.

Where an HMO becomes subject to mandatory licensing on 1 October 2018

HMOs of one and two storeys are not subject to mandatory licensing before 1 October 2018. 

However, the procedure for obtaining and the conditions for validity of a licence under additional licensing are similar to those under mandatory licencing. Therefore, if an HMO was subject to these requirements and a licence had been obtained, this would satisfy the requirement to have a mandatory licence.

· where an HMO is subject to selective licensing before this date, and a licence has been obtained; it will be valid as if it were a mandatory licence until expiry.

Fire Maintenance

Any fire precautions provided will need to be maintained, and this will cause no problems in the common areas, as they are easily accessed.

However, if for example fire alarm systems have been extended into the living accommodations this may cause problems as domestic dwellings are exempt from the order, and the tenants cannot be forced to co-operate with the RP.

Therefore, the tenancy agreement must have a section devoted to Fire Safety that lays down duties the tenant has to abide by.

This should include permission for the RP and any persons appointed by him/her to enter the living accommodation to carry out the maintenance of any fire safety equipment.

HMO Landlord Access for Inspections

The situation is slightly different if the tenant rents his room and has the use, together with the other tenants, of the shared parts of the property, such as kitchen, bathroom, lounge, hallway, passages etc.

Here the tenants’ rights to keep out the landlord will apply to his room. They will not necessarily apply to the shared parts – as he does not have ‘exclusive occupation’ of those 

Risk Assessments for HMO’s

Under the Regulatory Reform (Fire Safety) Order 2005, it is a legal requirement for the responsible person of a building to carry out a fire safety risk assessment where the building contains areas that may be accessible by members of the public or contractors.

In a block of self-contained flats, this may include boiler rooms, lift shafts and common hallways which may be used as a place of work.

A fire safety risk assessment will identify any problems and report on the required actions which the responsible person must then take into consideration.

It is an offence not to carry out a fire safety risk assessment, and the responsible person may be prosecuted. 

You must have a valid fire safety risk assessment for 3 and 5 year HMO licences, and you must be able to provide a copy of the assessment if asked.

Applicants for three and 5-year licences will be asked to make a declaration that:

· their property has a fire safety risk assessment that complies with the Regulatory Reform (Fire Safety) Order 2005

· it is reviewed regularly

· and can be provided when asked

HMO Register of Licenses 

The HMO licence registers show if a landlord has been issued with an HMO licence property and the expiry date of the licence.

New licence applications will not appear on the register until they have been processed and issued. Landlords of properties issued with HMO licences must display a copy of their licence in a prominent position in the licensed premises.

It is an offence for a person to have control of or manage a licensable HMO without a licence or without applying for a licence.

The managing agents should not engage in any business activity with an unlicensed landlord. If they do, they may be committing an offence and could face prosecution.

Housing Health and Safety Rating System (HHSRS)

The housing health and safety rating system (HHSRS) is a risk-based evaluation tool to help local authorities identify potential risks and hazards to health and safety.

The government has produced two excellent publications for landlords. Please read and study these for your course. Ensure you have a good understanding of the HRSS.

Housing Health and Safety Rating System – Guidance for Landlords and Property Related Professionals: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/9425/150940.pdf

The Housing Act 2004

http://www.legislation.gov.uk/ukpga/2004/34/contents

Property standards including HHSRS 

Fire safety

Fire Safety in new and altered HMOs, blocks of flats and maisonettes, is subject to the Building Regulations and the guidance can be found on Fire Safety in New, Extended or Altered Buildings.

Fire safety in the common areas of HMOs, blocks of flats or Maisonettes are controlled by Regulatory Reform (Fire Safety) Order 2005 (RRFSO), and this order lays down the legal requirements. The Regulatory Reform (Fire Safety) Order 2005

Because the RRFSO applies to HMOs the landlord or managing agent is usually designated as the Responsible Person (RP) under the order

Fire Safety Guidance for England and Wales

The most appropriate guide for the commons areas of HMOs and blocks of flats or maisonettes is Guide 3 – Sleeping accommodation. Please study this guide. The guide is for all managers and owners of premises providing sleeping accommodation.

It tells you about how you might comply with fire safety law, helps you to carry out a fire risk assessment in the common areas and identify the general fire precautions you need to have in place.

It has been written to guide a responsible person, to help them to carry out a fire risk assessment in less complicated premises. If you read the guide and decide that you are unable to apply the guidance, then you should seek expert advice from a competent person.

More complex premises will probably need to be assessed by a person who has comprehensive training or experience in fire risk assessment.

Document Guide 3 – Sleeping accommodation should provide all the information you require to conduct a Fire Risk Assessment.

A summary of what actions are required by the Responsible Person (RP) are;

  • Complete a fire risk assessment and consider the fire precautions in the common areas and eliminate or reduce risks identified to the lowest possible level
  • Consider escape routes which may require the provision of a fire barrier between the common areas and the living accommodation to create a protected route to a place of ultimate safety.
  • Consider the need for a fire detection and warning system and whether it should be extended into the living accommodation.
  • Consider the need for emergency escape lighting.
  • Consider firefighting equipment and facilities.
  • Consider the need for signs and notices
  • Consider recording, planning, informing, instructing, and training which will require producing a fire action plan.

Enforcement Common parts of the HMO 

You must maintain the common parts of the HMO in good and clean decorative order, in a safe and working condition, and reasonably clear from obstruction.

This includes handrails and bannisters, stair coverings, windows and other ventilation, light fittings; and all fixtures, fittings and appliances used in common by occupiers. These must all be kept in good, safe repair and clean working order.

However, this does not apply to tenants’ own possessions or things they are entitled to remove from the property.

Note: in a normal non-HMO tenancy; if there is disrepair or the tenant damages something, then the landlord may have limited liability.

However, if an HMO tenant has damaged something, the landlord may be prosecuted if the damage is not repaired. Example a stair handrail in the common area.

What is Selective Licensing:

Where selective licensing applies, unlike the other forms of licensing which relate to HMOs, then usually all houses within the private rented sector for that area must be licensed. With the Exemption where they require to be licensed as HMOs. Non-licensable HMOs must be licensed under Selective Licensing. “House” means a building or part of a building consisting of one or more dwellings. For those purposes, “dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling.

What is a designation for Selective Licensing?

Selective licensing is dependent on a designation by the local authority.

A local authority may designate the whole of their district or part of their district, subject to selective licensing.

An area may be designated for selective licensing either:

(i) if the area is (or is likely to be) an area of low housing demand, or 

(ii) the area is experiencing a significant and persistent problem caused by antisocial behaviour. Some or all of the private sector landlords are failing to take action to combat the problem. 

A designation can last for five years. It can be renewed. 

There are prescribed publicity requirements for designations and the revocation of designations.

Properties to which Selective Licensing applies

Selective licenses are required for houses within the designated area where the whole of the house is occupied either under a single tenancy or licence or under two or more tenancies or licences in respect of different dwellings contained in it. 

Criteria for Exemption from Licensing:

Social housing landlords are exempt from licensing where the occupants hold a licence or a tenancy. 

The following tenancies/licences are also exempt from licensing where:

  • a prohibition order is in force
  • business tenancies
  • licensed premises (for liquor licensing purposes)
  • agricultural tenancies
  • the property is managed/controlled by a local housing authority or public body
  • the building is regulated under other legislation (e.g. care homes)
  • the building is occupied by students controlled/managed by a University/College (who subscribe to an Approved Code of Practice)
  • the occupier is a Member Of The Family of the landlord/licensor whom himself holds under a lease of the property for a minimum of 21 years
  • holiday lets
  • the occupier shares any amenity (i.e. a toilet bathroom kitchen or living room) with the landlord/licensor or a Member Of The Family of the landlord/licensor

Note a landlord may be temporarily exempted from licensing a landlord is taking steps to change the situation or the dynamics of the property so that the property will no longer need to be licensed. 

Differences between Selective Licensing and HMO Licensing

Generally, the same rules apply when granting a Selective Licence as with an HMO licence. The main differences are:-

  • It is mandatory to take up references for a prospective tenant before letting a property subject to Selective Licensing.
  • Unlike HMOs, the licencing authority does not have to consider suitability for letting or amenity standards when granting a selective licence. However, the licence holder must still be a fit and proper person.

Where selective licensing applies, unlike the other forms of licensing which relate to HMOs, then normally all houses within the private rented sector for that area must be licensed. With the Exemption where they require to be licensed as HMOs. Non-licensable HMOs must be licensed under Selective Licensing. “House” means a building or part of a building consisting of one or more dwellings. For those purposes, “dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling.

What is a designation for Selective Licensing?

Selective licensing is dependent on a designation by the local authority.

A local authority may designate the whole of their district or part of their district, subject to selective licensing.

An area may be designated for selective licensing either:

 (i) if the area is (or is likely to be) an area of low housing demand, or 

(ii) the area is experiencing a significant and persistent problem caused by antisocial behaviour. Some or all of the private sector landlords are failing to take action to combat the problem. 

A designation can last for five years. It can be renewed. 

There are prescribed publicity requirements for designations and the revocation of designations.

Properties to which Selective Licensing applies

Selective licenses are required for houses within the designated area where the whole of the house is occupied either under a single tenancy or licence or under two or more tenancies or licences in respect of different dwellings contained in it. 

Criteria for Exemption from Licensing:

Social housing landlords are exempt from licensing where the occupants hold a licence or a tenancy. 

The following tenancies/licences are also exempt from licensing where:

  • a prohibition order is in force
  • business tenancies
  • licensed premises (for liquor licensing purposes)
  • agricultural tenancies
  • the property is managed/controlled by a local housing authority or public body
  • the building is regulated under other legislation (e.g. care homes)
  • the building is occupied by students controlled/managed by a University/College (who subscribe to an Approved Code of Practice)
  • the occupier is a Member Of The Family of the landlord/licensor whom himself holds under a lease of the property for a minimum of 21 years
  • holiday lets
  • the occupier shares any amenity (i.e. a toilet bathroom kitchen or living room) with the landlord/licensor or a Member Of The Family of the landlord/licensor

Note: a landlord may be temporarily exempted from licensing a landlord is taking steps to change the situation or the dynamics of the property so that the property will no longer need to be licensed. 

Differences between Selective Licensing and HMO Licensing

Generally, the same rules apply when granting a Selective Licence as with an HMO licence. The main differences are:-

  • It is mandatory to take up references for a prospective tenant before letting a property subject to Selective Licensing.
  • Unlike HMOs, the licencing authority does not have to consider suitability for letting or amenity standards when granting a selective licence. However, the licence holder must still be a fit and proper person.

Temporary exemptions

Where a person having control of a house in multiple occupation (HMO), that should be licensed but is not. If, that person notifies the local authority, of her/his intention to take steps to take the house out of the licensable criteria. The local authority may serve a temporary exemption notice. If a temporary exemption notice is served by the local authority, the HMO no longer needs to be licensed.

The temporary exemption notice lasts for three months from the date on which it was served. On receipt of a further notification from the person having control, a second temporary exemption notice can be granted (lasting for three months from the date when the first expires). No more than two temporary exemption notices can be granted.

The local authority can decide not to serve a temporary exemption notice but must notify the person affected with a notice of the decision and reason without delay.

There is a right of appeal to the First-tier Tribunal (Property Chamber).

Variation:

Local authorities may vary a licence with the agreement of the licence holder, or where there has been a change in circumstances, including the discovery of new information.

This variation can be on application or the local authority’s own initiative. A request to vary a licence should be made in writing. Reasons to vary a licence could be to increase or decrease the number of permitted occupants, to add conditions relating to amenities, or to remove any conditions that are no longer applicable.

Where there has been a change in circumstances, and the issue is about the maximum number of households, or occupiers, or the standards of amenities. The local authority must apply the standards to the circumstances as they were at the time when the licence was granted.

However, if the prescribed standards have been changed in regulations since the original licence was issued, the new standards apply.

Before varying a licence (unless the variation is by agreement or is not significant), or before refusing to vary a Licence. The local authority must serve a notice on the licence holder and all relevant persons (this does not include tenants with leases with an unexpired term of three years or less). Giving information about the effect of the variation and reasons for it, and consider any representations made. There is a minimum consultation period of 14 days.

Within seven days of the decision to vary the licence (or to refuse to vary the licence), the local authority must serve on the licence holder and all relevant persons a copy of the decision including the date it was made, reasons, and information on how to appeal.

How (IMO) Interim Management Orders work:

The Housing Act 2004 introduced Interim and Final Management Orders, replacing control orders under the Housing Act 1985. The orders are to be used when the licensing regime fails and allow the local authority to take over the management of an HMO where there is no fit and proper person available to manage it.

Interim Management Orders

A local authority may make an Interim Management Order (IMO) to ensure that:

  • immediate steps are taken to protect the health, safety or welfare of occupiers and adjoining occupiers/owners and
  • any other measures are taken to ensure the proper management of the house, pending further action.

A local authority must make an IMO where the property is an HMO that should be licensed (or house to which selective licensing applies) but is not, and:

  • there is no reasonable prospect of it being licensed, or
  • the health and safety condition is satisfied.

An IMO must also be made where the house or HMO is licensed, and:

  • the licence has been revoked, but the revocation is not yet in force, and once revocation is in effect there is no foreseeable prospect of a licence being granted, or
  • the health and safety condition is satisfied.

The local authority has the discretion to make an IMO if:

  • the property is a non-licensable HMO, and
  • the First-tier Tribunal (Property Chamber) authorises the making of the IMO, which it can only do if the health and safety condition is satisfied.

Health and safety condition

The health and safety condition is that the making of an IMO is necessary to protect the health, safety or welfare of occupiers or adjoining occupiers/owners. If there is a threat to evict persons occupying the house to avoid the house being required to be licensed, this may constitute a threat to the occupiers’ welfare.

The health and safety condition is not satisfied where there is a category one hazard requiring the local authority to take enforcement action and where such action would adequately protect the health, safety, and welfare of the people in question.

An IMO lasts for a maximum of 12 months. Usually, the order comes into force as soon as it is made, however, if the order is made because of revoking an HMO licence, it will not come into force until the revocation takes effect.

After making the order, the local authority must serve on the occupiers and relevant persons a copy of the order and a notice that gives:

  • the reasons for making the order
  • the date on which it was made
  • the effect of the order, and
  • the date ceases to have an effect.

This must be done as soon as is practicable on the occupiers, and within seven days on relevant persons.

Relevant persons include the landlord, any person with an interest or estate in the property, or any person who would be managing or have control of the property (if it were not for the order).

A relevant person can appeal to the First-tier Tribunal (Property Chamber) against the decision to make the order or the terms of the order.

The local authority’s first duty after making the IMO is to take immediate steps necessary to protect the health, safety or welfare of occupiers and the adjoining occupiers/owners.

It must take such other steps as appropriate for the proper management of the house pending either the grant of a licence or the making of an FMO if it is a house that should be licensed.

Where the house is not subject to a licensing regime, the local authority must consider whether it should make an FMO or revoke the IMO and take no further action.

These decisions must be made as soon as practicable.

Effect of an IMO

A local authority can appoint another body to carry out the management functions under an IMO on its behalf.

Under an IMO the local authority (or agent appointed by it) takes possession, collects the rents, deals with arrears, and makes repairs as a landlord might. The local authority can do anything that a person who has an estate or interest in the house Would do, were it not for the order. The local authority, however, has no power to create a new tenancy without the written consent of the landlord.

The landlord is not entitled to:

  1. receive any rents
  2. may not exercise any management functions, nor create any lease or licence to occupy the property.

However, the owner is permitted to sell the property.

The local authority may use rents received to service relevant expenditure and may deduct its administrative costs and any compensation payable to third parties. It must pay any surplus to the landlord.

Where income received is less than expenditure, the authority may recover the difference from the landlord. The local authority must keep accounts of relevant expenditure and income.

Varying or revoking an IMO

IMO’s may be varied or revoked by the local authority’s initiative or by the owner on appeal

Final Management Orders (FMO)

FMOs are usually followed by IMOs, where necessary. A local authority must make an FMO if the property should be licensed by the date of expiry of the IMO, but if the authority considers that a licence cannot be granted by that date. An authority may make an FMO for a house not subject to licensing where the IMO is ending, and the authority considers it necessary.

Making an FMO

Before making an FMO, the local authority must serve a copy of the proposed order, together with a notice setting out the grounds for the order.

The authority must also serve the primary terms, and a copy of the management scheme with the period for a consultation so representations can be made.

The consultation period cannot be less than 14 days or in some cases, seven days if the order has been revised due to representations.

An FMO comes into force when the period for appeal has expired (28 days from the date the order was made), or if there is an appeal the date on which it is confirmed. The order will last for five years unless the order itself provides for an earlier date.

The effect of an FMO

Once an FMO is in force, the local authority must secure the proper management of the house through a management scheme.

The effect of an FMO is mostly the same as an IMO, except that under an FMO the local authority does need the owner’s consent, to grant a new tenancy. Any tenancy granted by the authority cannot be for a period past the expiry date of the order.

All FMOs are required to provide a management scheme, showing the authority plans to manage the property under the order.

The management scheme comes into force once the appeal period has expired or the terms are agreed.

Schemes have two parts:

  • Part 1 – The authority setting out how it intends to address the matters that caused it to make the FMO.

Part 2 – A plan of action how it will deal with income and expenditure, proposed works, and compensation

Varying or revoking an FMO

FMOs can be varied or revoked, by the authority’s initiative or by appeal from the owner.

Appealing a decision

Appeals against HMO licence decisions

It is possible to appeal against:

  • the council’s decision to refuse to grant an HMO licence
  • the council’s decision to grant an HMO licence
  • the conditions of an HMO licence
  • the council’s decision to vary or revoke an HMO licence
  • the council’s decision to refuse to vary or rescind an HMO licence

Appeals can be made by any relevant person, including:

  • the applicant for an HMO licence
  • any freeholder, long leaseholder, or mortgage lender
  • a person having control of or managing the HMO

How to appeal

Appeals are issued through the First-tier Tribunal (Property Chamber), which is an independent body.

Appeals must be submitted within 28 days of the decision.

Residential Property Tribunals

The First-tier Tribunal (Property Chamber) has five regional offices throughout England that deal with the settling of disputes about leasehold property and the private rented sector. They deal with various matters including service charge disputes, lease variations and the determination of premiums for freehold purchase and lease extensions. This tribunal covers issues previously heard by the Leasehold Valuation Tribunal in England.

Covid-19 and HMO common areas

Not many buildings and the HMO arrangement are the same. It is not possible to draft a COVID-19 policy for HMO’S that is suitable for all HMO’S.

Landlords and agents need to ensure they have carried out a risk assessment for COVID-19 to see what may need to be implemented, changed to reduce the risk of Covid-19 in the common areas.

NHS posters are freely available for download from the BLA website or the NHS website. These posters remind all persons entering and leaving the HMO the importance and the method of reducing the infection of COVID-19.

The doorbell, electronic entry keypads and or door handles in the common areas to the HMO require consideration to reduce the risk COVID-19 infection.

In rare cases, in some exceptional circumstances, it may be possible for a tenant to sue a landlord and or an agent for being infected by COVID-19.

Landlord and agents ought to take pro-active steps to mitigate this potential risk by demonstrating what steps have been taken to reduce the risk of infection in the HMO common areas.

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15th of June 2020

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