[2024] UKUT 313 (LC)

This appeal is about the licensing requirements for houses in multiple occupation, or HMOs. Section 254 of the Housing Act 2004 sets out a number of “tests” to define an HMO, and the one relevant for present purposes is the “standard test” at sub-section (2). It describes what is perhaps the most widely-occurring type of HMO, the shared house where living accommodation such as a kitchen and living room is shared by occupiers who belong to more than one household:

“(2)

A building or a part of a building meets the standard test if–

(a)

it consists of one or more units of living accommodation not consisting of a self-contained flat or flats;

(b)

the living accommodation is occupied by persons who do not form a single household (see section 258);

(c)

the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259);

(d)

their occupation of the living accommodation constitutes the only use of that accommodation;

(e)

rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation; and

(f)

two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities.”

Part 2 of the 2004 Act makes provision for the licensing of HMOs. Section 55 of the 2004 Act says this:

“(1)

This Part provides for HMOs to be licensed by local housing authorities where–

(a)

they are HMOs to which this Part applies (see subsection (2)), and

(b)

they are required to be licensed under this Part (see section 61(1)).

(2)

This Part applies to the following HMOs in the case of each local housing authority–

(a)

any HMO in the authority's district which falls within any prescribed description of HMO, and

(b)

if an area is for the time being designated by the authority under section 56 as subject to additional licensing, any HMO in that area which falls within any description of HMO specified in the designation.”

To summarise section 55(1) and (2): HMOs to which Part 2 of the 2004 Act applies are (1) all those specified in the regulations and in addition (2) HMOs in an area specified by the local authority as being subject to additional licensing under section 56.

Section 61 requires all HMOs in both those categories to be licensed unless certain exemptions (not relevant to this appeal) apply.

For the first of those categories the requirement for a licence is set out in regulations and is often referred to as “mandatory licensing”; the Licensing of Houses in Multiple Occupation Regulations 2018, of which paragraph 3 provides:

“An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act if it—

(a)

is occupied by five or more persons;

(b)

is occupied by persons living in two or more separate households;”

and meets one of the tests in section 254.

The second of those categories refers to an additional licensing designation under section 56 of the 2004 Act, which enables a local housing authority, if certain conditions are satisfied, to set up an additional licensing scheme so that more HMOs within their area (i.e. not just the ones specified in regulations) require a licence.

The proviso to all those provisions is Schedule 14 to the 2004 Act, which says so far as relevant to this appeal

“1(1) The following paragraphs list buildings which are not houses in multiple occupation for any purposes of this Act other than those of Part 1. …

7.Any building which is occupied only by two persons who form two households.”

The practical upshot of these provisions is that:

The offence under section 72 is one of those in respect of which the FTT may make a rent repayment order, on the application of a tenant, pursuant to the Housing and Planning Act 2016; it may order the repayment of up to one year’s rent paid while the offence was being committed. Section 44(4) of the 2016 Act provides:

“(4)

In determining the amount the tribunal must, in particular, take into account—

(a)

the conduct of the landlord and the tenant,

(b)

the financial circumstances of the landlord, and

(c)

whether the landlord has at any time been convicted of an offence to which this Chapter applies.”