HMO Housing Prosecutions

Local authorities are increasingly prosecuting landlords if they fail to get an HMO licence or breach the HMO Management Regulations. HMO prosecutions have become a lucrative source of extra income for case strapped councils and are on the rise. If you own or run an HMO, it is essential to seek legal advice if you are threatened with an investigation, and to comply with the rules to avoid such an eventuality.

Criminal Liability for Landlords - HMO Prosecutions

All HMOs must be licensed in compliance with the mandatory scheme which applies nationally to any three-storey property occupied by at least 5 persons, where the occupants live in 2 or more single households.

You could face criminal charges if, for example, you rent out a three-storey property to five or more individuals who are not related and live in separate households. There is an additional and more detailed six part test for a HMO which also applies.  

When Prosecutions Can Occur

The local authority can prosecute landlords in the following situations:

• Being a person with control or management of a Unlicensed HMO (s.61 and s.72(1) of the Housing Act 2004

• Breaching HMO Management Regulations e.g, failing to ensure that firefighting equipment and fire alarms were maintained in good working order (Reg 4 (2) of The Management of HMOs (England) Regulations 2006 and Section 234 (3) of the Housing Act 2004.)

• Statutory Overcrowding

• Illegal Evictions
  

All HMOs, whether licensable or not, must comply with Management Regulations. These are a specific set of regulations that impose duties on both the person having control of the HMO, and in some cases the persons occupying the HMO and include the following:

• Maintenance of common parts, fixtures, fittings and appliances

• Maintenance of living accommodation

• Safety Measures

• Supply and maintenance of gas and electricity

• Provision of information for tenants

• Waste disposal facilities

Often, landlords will also find themselves prosecuted for breaches of these regulations for e.g. failing to ensure that a fire alarm is in working order or not installing fireproof glass in all bedrooms. Fines of up to £5000 can be imposed. Less common are prosecutions for statutory overcrowding, a criminal offence under the 1985 Housing Act where a landlord could be prosecuted if it is demonstrated he/she had caused or permitted the house to become overcrowded.

It is not just Landlords of HMO’s who may require a licence to rent out a property. Many local authorities also have discretionary licensing schemes. For example, Newham Council was the first local authority to introduce a licensing system for private landlords two years ago. Thirty five thousand private rental properties in the borough must now have a licence. In a fast few years, the council has banned 25 landlords, prosecuted 439 others and recouped hundreds of thousands of pounds in fines and unpaid council tax. For more information see here.

The consequences of a conviction are serious. Previously landlords could be fined up to £20,000 for running an unlicensed HMO.

Recently the law has changed and the courts can impose an unlimited fine. Anyone convicted of an unlicensed HMO offence will find it difficult to obtain a HMO licence in future as they are likely to fail the “fit and proper person” test.

Company prosecutions are also common and can result in directors disqualification. BSQ maintains a database of all the unlicensed HMO prosecutions in the UK that have been reported nationally over the past few years.

A tenant living in a property that should have been licensed, but was not, can apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of 12 months). Councils can also reclaim any housing benefit that has been paid during the time the property was without a licence.