The licensing of Houses in Multiple Occupation will come into force on April 6, 2006. However, the penalties for not applying for a licence will not take effect until July 3, 2006.

Landlords need only have their application lodged with the local authority by July 3; they do not need to actually have the licence in place.

There are four potential penalties if you fail to comply:

• You can be fined up to £20,000 following prosecution in the magistrates court.
• You may have to repay up to one year’s rent if a rent repayment order is applied for to the Residential Property Tribunal.
• You cannot serve a valid Section 21 notice, so you cannot evict a tenant under the shorthold provisions (although you can apply for possession for rent arrears or other tenancy breaches).
If there is no prospect of a licence being obtained, the local authority must take over management of the property and collect the rents.

The application for a licence must be accompanied by any required supporting documentation, e.g. a gas safety certificate, and the fee. The same requirements will apply in areas where the local authority is introducing selective licensing for all privately rented accommodation.

Some landlords will take steps so that the property does not need a licence. For example, if you have five people in a property but one of them will be going within a month or two after licensing takes effect and you do not intend to replace that tenant, you can apply for a temporary exemption notice.

This can be granted for up to three months. You can apply for a further three months, which may be granted in exceptional circumstances provided you apply again before the first three months run out. If a temporary exemption notice is granted, you do not need a licence while the notice is in force. So long as you have applied for a temporary exemption notice again, the penalties for not having a licence do not apply.

The new Housing Health and Safety Rating System (HHSRS) will also come into force on April 6. This will run alongside HMO licensing and will deal with physical conditions and the state of repair of all residential accommodation, not just HMOs which need licences. Amenity standards (e.g. toilets, bathrooms etc) will, however, be dealt with through licensing.

The Government has announced its intentions regarding minimum national standards for properties requiring HMO licences. Local authorities can, however, impose additional requirements over and above these.

A landlord who is dissatisfied with any such additional requirements can appeal to the Residential Property Tribunal.

In setting local standards, local housing authorities should make sure that they are consistent with national standards. They should consult landlord and tenant groups. Standards should be published.

When deciding whether amenity standards are appropriate, the local authority must ask itself whether the existing provisions in the property meet national standards, and if not, how they could be met cost-effectively.

The national standards will provide that, where practicable, an HMO should have a bathroom (with bath or shower) plus separate toilet per five occupants, irrespective of gender. The bathrooms must be adequately heated and ventilated. Where these standards are not being met for the time being, then the local authority must require these standards to be met within three years of the grant of the licence. Bathrooms and toilets must be of adequate size and layout, and suitably located in relation to the living accommodation in the house.

The local authority will have to decide whether to require a separate toilet in the circumstances of the house (for a student house, the local authority may take a different approach than for bedsits). If the authority decided that a separate toilet was required, it would look at the layout and structure of the house and decide if it were feasible to provide it at reasonable expense. If not, then it would license the house for a lower number of occupiers.

The national standards will state that there must be a suitable cooking facility in individual bedsit units if there is no kitchen, but not what these cooking facilities are to be. In some HMOs, the landlord will provide a portable electric oven with rings and a grill. Alternatively, it may be an "all in one" kitchen unit. Both would meet national standards and the Government has said that local authorities should be slow to require something different from what is already there in such a case, unless it is inadequate, broken or dangerous.

In the case of kitchens, unless there are exclusive facilities, there must be for all sharing occupants a kitchen suitably located and equipped. It must have a suitable number of sinks, hot and cold water, draining boards, cookers, electrical sockets, kettles, worktops and cupboards, fridges with freezer compartments, refuse disposal facilities, and be fitted with extractor fans, fire blankets and fire doors.

Where you have bedsit-type accommodation, which is non selfcontained, then the units must each be equipped with a wash-hand basin or sink (where cooking facilities are provided), again with hot and cold water. Where there is neither a separate kitchen, nor access to a shared kitchen, then the unit must have a suitable cooking facility, worktop, kettle, appropriate electrical sockets and a cupboard for storing food.

The bedsit unit must be provided with an adequate means of space heating.

Where there are no shared bathroom or toilet facilities, bedsits must either have an ensuite bathroom or access to one nearby. Constant hot and cold water must be provided.

Overall, there will be a requirement for appropriate fire precaution equipment to be provided in communal areas of HMOs, including kitchens, entrance halls, stairs and landings.

All these requirements only apply to HMOs which require a licence. However, under HHSRS, the local authority can also impose requirements relating to nonlicensable HMOs.

Special provisions will apply where there is already an HMO registration scheme. About one third of local authorities in England already operate these, where landlords already have to satisfy the local authority that they are fit and proper persons, and the local authority can require works to be carried out at properties.

Where an HMO is in a registration scheme and is subject to mandatory licensing (because it is a property consisting of three or more storeys and has five or more occupants) it will be passported into licensing, without a further fee, for the remainder of the registration period.

At the end of the current registration period, a new licence will have to be applied for by the landlord.

Registration schemes currently include HMOs which will not be subject to mandatory licensing, e.g. two-storey properties. The Government is allowing local authorities, which currently operate these registration schemes, to introduce transitional licensing, and most will take up this option.

Transitional licensing is a form of additional licensing but will not have to be justified. The 2004 Act normally only allows a local authority to introduce additional licensing where there are a significant number of HMOs in poor management.

However, for transitional licensing this requirement will not apply.

But if the property falls outside the new definition of an HMO, even though it may be in a registration scheme, it will be outside licensing so that transitional licensing will not apply. This includes converted selfcontained flats where at least two thirds of the flats in the building are owner-occupied.

A particular problem has arisen in respect of shared houses. A shared house occupied by a group of individuals (even though they are not related to each other) is not an HMO under the current definition if it is occupied by them as a single household. Usually this means that they occupy under a single joint tenancy and share communal facilities. There is case law that this kind of property is not an HMO under the present definition. This will change once the 2004 Act is in force as it defines an HMO as a property shared by two or more unrelated people. As from April 6, 2006 this new definition will apply, so that a shared ‘single household’ property will be an HMO.

There are suggestions from the Office of the Deputy Prime Minister that these shared houses will now require to be licensed where a transitional licensing scheme applies even though they may not be subject to mandatory licensing.

Thus, where there is a transitional scheme in force, a two-storey shared house occupied by a group will also require a licence, even if they are not presently subject to registration. There can be no passport in such a situation, so the landlord will have to apply for a licence.

The RLA has been very concerned with the implications of this and has been assisting the Hull and District Landlords Association in opposing the Government’s proposals. It is of particular concern in Hull because there are a large number of two-storey properties there. It will be a problem in other areas which already have registration schemes where there are concentrations of shared houses, especially in university towns.

The Government will be publishing detailed regulations regarding the operation of licensing at the end of November, after this article goes to print. At the moment we can only tell you what we know based on the Government’s published intentions.

As always, we have to warn that we will not know for certain what is happening until the regulations are in their final form.