HMO licensing – restrictions on the type occupier

March 31, 2017

In Nottingham City Council v (1) Parr and (2) Trevor Parr Associates Ltd [2017] EWCA Civ 188, the Court of Appeal considered whether or not licence conditions imposed under the HMO regime in the Housing Act 2004 could restrict the type of occupier who could live in the accommodation. The case was concerned with two HMOs used for letting to students.

Part 2, Housing Act 2004 (“2004 Act”) sets out statutory provisions in relation to the licensing of houses in multiple occupation (HMO). Under section 61, there is a requirement for every HMO, to which Part 2, applies to be licensed unless a temporary exemption notice or an interim or final management order is in force.

By virtue of section 254, 2004 Act a building or a part of a building is an HMO if it meets certain “tests” or criterion. For the purposes of this note and the Court of Appeal decision, a building or part of a building is an HMO if it consists of one or more units of living accommodation not consisting of a self-contained flat or flats and is occupied by persons who do not form a single household as their only or main residence (or they should be treated as occupying as their only or main residence) (section 254(2)(a)-(c)). A person is to be treated as occupying a building or part of a building as their main or only residence if it is occupied by the person as their residence “for the purpose of undertaking a full-time course of further or higher education” (section 259(2)(a)).

There are exclusions within the 2004 Act and paragraph 4 of schedule 14 provides, inter alia, that a building is not an HMO “where the person managing or having control of it is the educational establishment in question” (para.4(1)(b)). It must be noted, however, that the lettings in this case were not managed or controlled by the educational establishment.

An application for a licence must be made to the local housing authority (section 63). Under section 64, 2004 Act, where an application is made, the authority must either grant, or refuse to grant, a licence. The authority may grant a licence if it is satisfied, inter alia, “that the house is reasonably suitable for occupation by [a specified number of persons] or that it can be made so suitable by the imposition of conditions” (section 64(3)(a)).

Section 67 governs the power to impose conditions and a licence may include such conditions, by virtue of that section, as the authority consider appropriate for regulating, amongst other things, the management, use and occupation of the house. Conditions may impose restrictions on the use or occupation of particular parts of the house by persons occupying it (section 67(2)(a)).

Background

Nottingham City Council was the licensing authority in respect of the two HMOs with which the appeal was concerned. The HMOs were used for letting to students. Both were terrace houses of traditional brick construction and had attics that had been converted for use as a bedroom. Although in relation to HMOs there is no prescribed minimum acceptable size for a bedroom, Nottingham had taken the view that 8m2 was a minimum acceptable size and in measuring the size of rooms with all space where the floor to ceiling height is less than 1.53m disregarded. As both attic rooms had sloping ceilings, based upon Nottingham’s measurements, the rooms were less than 8m2 (the floor space of both rooms was actually more than 8m2 if the ceiling height was ignored. The space under the sloping roof was a useable area e.g. for a desk and storage).

Nottingham imposed licence conditions for both rooms. In relation to one attic room there was a prohibition on the space being used for sleeping and, in relation to the other, it was not to be used as a sleeping room unless where it was let in combination with another room for which the occupant would have exclusive use of both.

The Respondents successfully appealed against the licence conditions to the First-Tier Tribunal (FTT). In relation to one of the rooms, the FTT substituted its own condition which read:

“The second floor front bedroom may only be used for sleeping accommodation by a person engaged in full-time education and who resides in the dwelling for a maximum period of 10 calendar months over a period of one year.”

The Upper Tribunal, dismissing Nottingham’s appeal, directed that the same condition be applied to the HMO licence in respect of the attic room in the second property.

The question for Court of Appeal was whether the condition was lawful. Nottingham’s arguments are summarised at paragraph 14 of the judgment as:

  • the condition was outside the ambit of the power to impose conditions. What was relevant for the purposes of the licensing regime was the physical characteristics of the property not the personal characteristics of potential occupiers. It was contrary to the policy of the 2004 Act to allow students to live in sub-standard accommodation which was effectively what the condition would allow; and,
  • the condition was incapable of effective enforcement and would not achieve its intended purposes of “cohesive living” and was, therefore, irrational.

Court of Appeal                               

The Court, dismissing Nottingham’s second appeal, held that the general characteristics of occupiers are relevant in some contexts connected both with HMOs and with housing standards generally and, therefore, the condition was not outside the ambit of the power. It was said, considering of a number of examples within the licensing regime, that a full-time student is regarded as occupying accommodation as his only or main residence if it is occupied for the purpose of his full-time course. It must be relevant, therefore, in some cases to investigate the type of course a student is embarking upon (see judgement at [18]). There was “nothing intrinsically inimical to the regime governing HMOs in investigating the general characteristics and activities of an occupier” (see judgment at [23]). A condition of licence limiting occupation of a property to students was a restriction on “occupation by persons” as allowed by section 67(2)(a), 2004 Act.

There were a variety of criticisms put forward by Nottingham in relation to its irrationality argument i.e. that the condition was incapable of effective enforcement and it did not achieve its aim of securing “cohesive living” (see judgment at [25-30]).

The Court appeared to take a practical approach towards addressing the council’s concerns by way of further amendments to the conditions of licences which were not resisted by the Respondents but which Nottingham had “studiously avoided in engaging with…preferring to take its stand on the point of principle” (see judgment at [29]). The licence conditions were to be amended to include conditions: (a) requiring a sitting room and kitchen/diner to be kept available for communal use; and, (b) prohibiting any bedrooms to be let to persons other than students engaged in full-time education”. Finding that the problems complained of could be solved by further amendment to the condition, the Court did accept that there was “some substance” to two of the arguments advanced namely: (a) that there was no condition that in fact required any part of the HMO to be available for communal living; and, (b) that the condition did not require the remaining bedrooms to be let to students.

The judgment can be found in full here.

Barristers