Additional Licensing Scheme Changes 2021

Frequently Asked Questions on Additional Licensing Scheme changes 2021

Why is there a break in the scheme?

The Council was planning on consulting to renew the Additional Licensing Scheme in spring / summer 2020. A decision on renewal would have been made in autumn 2020 in plenty of time to inform landlords that either: the scheme would continue from 24 January 2021 or it would stop.

Due to the Coronavirus pandemic, National Government advised that consultation relating to property licensing should be paused. We took this advice. It was never our intention to have a break – we had planned that, if continued, it would be continuous. It is unfortunate we will now have a break however this was out of our control.

Is my property still an HMO? 

Yes. A property is an HMO where it is occupied by three or more people in two different households or is divided into self – contained flats without building regulations. For guidance on the definition of an HMO, please see our HMO Definition and HMO Licensing.

Which properties still need a licence?

HMOs with five or more tenants fall under the national requirement for a licence – this is known as mandatory licensing. These HMOs still need a licence. A similar analogy is an MOT for a car – only cars over three years old need an MOT like HMOs with five or more people need a mandatory licence. Properties with four or three tenants, or section 257 HMOs, will not need a licence unless the scheme is renewed.

My licence expires on 24 January 2021 – do I need to renew the licence? 

  • Licences with an expiry date up to and including 23 January 2021 will need to renew.
  • Licences where the house has 3 or 4 occupants (or a section 257 HMO) that expire on, or after 24 January 2021 will not need to be renewed.
  • Any HMO with five or more tenants will still require a licence and a renewal application will be made as normal.

When will you stop licensing?  E.g. If my property expires on 30 December will I be expected to renew?

If your HMO has five or more tenants, then you must renew as normal because your house falls into the national requirement for a licence.

If your HMO has 3 or 4 tenants or is a “section 257” HMO then we will expect all landlords to renew their licences up to and including 23 January 2021.

My licence expires before 24 January 2021. What happens if I do not renew?

If you do not renew, then you are committing an offence for failing to licence the house.

You cannot serve a section 21 “notice to quit” during the time the house needs a licence.

In addition, the tenants can make an application for a rent repayment order for the time the house does not have a licence.

If you do not renew, the council will be contacting occupiers to inform them of their rights.

In addition, if the scheme is renewed, then you will have to pay the NEW FAILURE TO RENEW application fee – this is currently £541 however it will increase in April 2021 to £750. You will not be eligible for a longer licence when this application is made.

What happens if I make a valid application then my licence expires and a new licence has not been issued before 24 January 2021? Will a licence still be issued?

If your licence expires up to and including 23 January 2021 and we have not yet issued a licence then we will still issue a licence. At the point you made the application, a licence was required.

Have I lost out as I have a licence that is valid in this period – will I get an extension for that time?

Your licence continues in force until expiry so it is still valid. The Housing Act 2004 s68 is clear – a licence continues in force for the period that is so specified or determined. This applies even if, at any time during that period, the HMO concerned subsequently ceases to be one to which this Part applies.

At the time you made the application, you were legally required to have an HMO licence – you have not “lost out”. You will not get an extension.

What if I want to increase occupancy to 5 or more during the break – will I still be able to renew rather than make a new application?

Yes. Before your licence expires, you must complete the renewal application and say you want to increase occupancy to five persons. In this circumstance, the licence is renewed as a mandatory licensable HMO.

What will I have to pay if the scheme restarts?

Where the licence expired after 24 January 2021, then we will ask for a new application and will charge the relevant renewal fee. This is providing the application is made within a specified time – i.e. within six weeks of the scheme start date.

How will the new applications be managed? There will be a lot of applications all at once to process – how long will it take to process my application?

We will be encouraging landlords to make their applications as their licences expire with the declaration and stage 1 fee. However, it will be a new application form that needs to be completed. In this way, we can start the application process (as we would have done if there was no break). We will not be able to issue intention notices until the scheme starts again.

We plan to process applications based on the previous expiry date. So those applications where the licences expired in January and February will be processed before licences that expired in March and April – providing applications are made in good time.

Normally, for new applications we aim to issue the licence within 16 weeks of the date of application (providing the fee and declaration are submitted within two weeks). Given the large volume of new applications expected, it is anticipated our processing times will be double – so at least 32 weeks and it may take longer.

If I make an application as you ask during the break and then the scheme is not renewed, will you refund the stage 1 fee?

Yes.

What is expected of these properties in this period with regard to HMO legislation?

As the property is still an HMO then you are still legally required to obtain all relevant safety certificate (gas, electrical, fire) and you must comply with the HMO management regulations.

How will landlords whose properties are unsafe be monitored in this period?

We will respond as normal to enquiries from tenants and members of the public where concerns about safety are raised.

The HMO Management Regulations apply to all HMOs, regardless of whether an HMO licence is required or not. We can still inspect in response to complaints and will take enforcement action if needed. If we find defects under the Management Regulations then the landlord may be subject to a fine of up to £30,000 for each regulation they break. In addition, the Housing Health and Safety Rating System applies to all homes and we could serve an Improvement Notice if required.

Do I have to meet the conditions on my HMO licence?

Yes. Your licence continues in force until it expires. You have to comply with conditions on the licence. The majority of conditions are legal requirements regardless of the HMO licensing scheme. If you have been asked to complete work, this is most likely for the health and safety of your tenants and is required under the Management Regulations which apply even if the house is not required to be licensed.

If you have not complied with conditions, then this may be an offence under the Management Regulations. Each regulation breach may result in a fine of up to £30,000. We assess each case and determine if it is serious enough to result in fine. Less serious breaches will result in a higher renewal fee even if the licence has expired.

Will this affect our ability to re-let the property with agents/tenants?

No. An HMO is defined under section 254 and 257 of the Housing Act 2004. Nationally, HMOs with five or more tenants need a licence. If you have 3 or 4 tenants then you can still re-let as an HMO however you do not need a licence until the scheme starts again.

What if we want to re-mortgage our property and mortgage company want evidence of the property being an HMO?

An HMO is defined under section 254 and 257 of the Housing Act 2004. Your tenancy agreements should provide evidence the house is an HMO.

Will this affect our ability to sell the property if we do not have an HMO licence as mortgage companies / prospective buyers often want evidence it is an HMO?

An HMO is defined under section 254 and 257 of the Housing Act 2004. Your tenancy agreements should provide evidence the house is an HMO.

Do I still need planning permission?

Yes. Planning permission is a separate requirement. You must apply for planning permission. Any new HMOs, regardless of the number of tenants, must have planning permission as a C4 HMO (3 to 6 person HMO) or sui generis (large HMO 7+ people) property.

Will this affect our planning permissions status?

No. Planning is separate and providing your house continues to be occupied as an HMO then you would likely retain your permitted development rights.

Will my property still be on the HMO register?  Will this affect my ability to attract tenants who might want to check if my property is HMO?

When the licence expires, the property will not be on the HMO register. It should not affect the ability to let to tenants.

What can members of the public be told if they enquire with the Council if this property is an HMO during this break?

They will be told that at this point, a three or four person HMO does not require a licence unless the scheme is renewed.