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Exemptions from HMO Licensing

Understanding exemptions from HMO (House in Multiple Occupation) licensing is critical for landlords and property managers. The Housing Act 2004 provides mechanisms such as temporary exemption notices and licence revocations, which can relieve landlords from licensing requirements under specific circumstances. This guide explains these exemptions, their conditions, and the procedures involved.

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Temporary Exemption Notices

A temporary exemption notice (TEN) may be served by the local authority when the person having control of an HMO notifies the council of their intention to take steps to remove the property from licensable criteria [1]. Once a temporary exemption notice is served, the property no longer requires an HMO licence.

• Duration: A temporary exemption notice lasts for three months from the date of service.
• Extension: Upon further notification, a second temporary exemption notice can be issued, extending the exemption for an additional three months. However, no more than two temporary exemption notices can be served for the same property.

The local authority has the discretion to refuse to serve a temporary exemption notice. If refused, the authority must issue a written notice to the person affected, detailing the decision and the reasons. The person affected has the right to appeal this decision to the First-tier Tribunal (Property Chamber) [2].

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Revocation of an HMO Licence

Local authorities have the power to revoke an HMO licence under certain conditions [3]. Revocation may occur in the following scenarios:

1. By Agreement:

   • If the property is converted into a single dwelling, the licence holder and the local authority can agree to revoke the licence. This type of revocation takes effect immediately upon agreement.

2. Local Authority Decision:

   • The licence holder has committed a serious breach, or repeated breaches, of licence conditions.
   • The local authority determines that the licence holder or property manager is no longer considered fit and proper.
   • The property no longer meets the required standards for HMO licensing. In this case, the standards are judged based on those applicable when the licence was granted unless there has been a revision in regulations.

When revocation occurs by the local authority’s initiative, the procedure involves:

• A notice of intention to revoke the licence.
• A 14-day consultation period to allow the licence holder to respond.
• A formal notice of decision, including the effective date and reasons for revocation.

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Right of Appeal Against Revocation

If the local authority revokes an HMO licence or refuses to revoke a licence when requested, the affected party has the right to appeal the decision. Appeals must be submitted to the First-tier Tribunal (Property Chamber). The licence remains valid until the time for appeal has elapsed or the appeal process is complete.

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Key Considerations for Landlords

1. Act Quickly: Landlords planning to remove a property from HMO licensable criteria should notify the local authority promptly to obtain a temporary exemption notice.
2. Understand the Limits: Only two temporary exemption notices can be issued for a single property, giving landlords up to six months to address licensable criteria.
3. Avoid Breaches: Repeated or serious breaches of licence conditions can lead to revocation, which may affect the ability to let the property.
4. Fit and Proper Test: Ensure that the licence holder and managers remain fit and proper individuals to avoid revocation risks.
5. Appeal Rights: Use the appeals process if you disagree with a local authority’s decision regarding exemptions or revocations.

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Conclusion

Temporary exemption notices and licence revocations provide flexibility for landlords managing HMOs. By understanding the processes and complying with the requirements, landlords can effectively navigate exemptions while maintaining compliance with the Housing Act 2004.

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[1] s.62 Housing Act 2004.
[2] Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 SI 2013/1169; the First-tier Tribunal and Upper Tribunal (Chambers) (Amendment) Order 2013 SI 2013/1187.
[3] s.70 Housing Act 2004.