Applying for a Licence

2.16 Applying for a Licence

Anyone who owns or manages a licensable HMO, whether under the
mandatory scheme or an additional or selective scheme, has to apply to the
local authority for a licence.

The local authority must give a licence if it is satisfied that the:

• HMO is reasonably suitable for occupation by the number of
people allowed under the licence;

• the proposed licence holder or the proposed manager (if there
is one) is a fit and proper person;

• the proposed licence holder is the most appropriate person to
hold the licence;

• the proposed management arrangements are satisfactory;

• the person involved in the management of the HMO is
competent and the financial structures for the management
are suitable.

2.16.1 Fit and Proper Person Test

In determining whether the licence applicant is a ‘Fit and Proper Person’
the local authority will take into account a number of factors, including:

• any unspent convictions relating to violence, sexual offences,
drugs and fraud;

• whether the person has breached any housing or landlord and
tenant law;

• whether they have been found guilty of unlawful
discrimination.

2.16.2 Licence Conditions

A mandatory licence will normally last for the maximum five year period
and the local authority normally charges a fee to cover the cost of issuing
the licence. In some local authorities discounts are given if the landlord
or property is accredited or if an application is made with a plan of the
property.

The licence will specify the maximum number of people who may live in
the property. The following conditions must apply to every licence:

• a valid current gas safety record, which is renewed annually,
must be provided (for properties that have gas);

• proof that all electrical appliances and furniture are kept in a
safe condition;

• proof that all smoke alarms and emergency lights are correctly
positioned and installed;

• each occupier must have a written statement of the terms on
which they occupy the property. This may be, but does not
have to be, a tenancy agreement.

The local authority may also apply other conditions of their own which may
include any of the following:

• restrictions or prohibitions on the use of parts of the property
by occupants;

• action necessary to deal with the behaviour of occupants or
visitors;

• ensuring the condition of the property, its contents, such as
furniture and all facilities and amenities (e.g. bathroom and
toilets) are in good working order and to carry out specified
works or repairs within certain time limits;

• a requirement that the responsible person attends an approved
training course in relation to any approved code of practice.

2.16.3 Properties Which Cannot be Granted a Licence

If the property is not suitable for the number of occupants, is not properly
managed or the landlord or manager is not a fit and proper person, a licence
will not be granted. If a property cannot be granted a licence the council
must make an Interim Management Order (IMO), which will allow the local
authority to manage the property (either directly or indirectly through a
nominated partner).

The IMO can last for a year until suitable permanent management
arrangements can be made. If the IMO expires and there has been no
improvement, then the council can issue a Final Management Order (FMO).
This can last up to five years and can be renewed.

2.16.4 Temporary Exemption from Licensing

If the landlord or person in control of the property intends to stop operating
as a licensable property or legally reduce the numbers of occupants and can
provide evidence of this, then they can apply for a Temporary Exemption
Notice (TEN).

This lasts for a maximum of three months and ensures that a property in the
process of being converted from a licensable property does not need to be
licensed. If the situation is not resolved, then the landlord can apply for a
second Temporary Exemption Notice for a further three months.

When this expires the property must be licensed, become subject to an
IMO, or cease to be a licensable property. TENs also apply where the licence
holder dies. The property will be treated as if it is subject to an exemption
notice for three months, during which time the estate can either apply for a
new licence or cease to run the property as a licensable property. If it takes
longer than the initial three months the estate can apply for one further
exemption notice.

2.16.5 Right of Appeal Against a Local Authority’s Decision

A landlord can appeal to the Residential Property Tribunal Service (RPTS),
normally within 28 days, if the local authority refuses a licence, grants a
licence with conditions, revokes or varies a licence.

More information about the work of the RPTS and the jurisdiction of
Residential Property Tribunals under the Housing Act 2004 can be obtained
from www.rpts.gov.uk.

2.16.6 Offences

It is a criminal offence if the landlord or the person in control of the
property fails to apply for a licence for a licensable property or allows a
property to be occupied by more people than are permitted under the
licence. A fine of up to £20,000 may be imposed. In addition, breaking any
of the licence conditions can result in fines of up to £5,000. Note also, that
no section 21 notice [see section 5.4.1 for more information about section
21 notices] may be given in relation to a shorthold tenancy of a part of a
licensable HMO so long as it remains unlicensed. This means that where
a licence is compulsory, unlicensed HMO landlords will be unable to evict
their tenants by the notice-only section 21 procedure.