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What is Additional Licensing? Houses in Multiple Occupation Guide

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What is Additional Licensing?

Additional licensing schemes are regulatory measures introduced under the Housing Act 2004 to manage Houses in Multiple Occupation (HMOs) that do not fall under the mandatory licensing criteria. These schemes allow local councils to address specific issues related to smaller or atypical HMOs that still require oversight to ensure tenant safety and property standards.

The government gives councils the option to implement additional licensing to improve living conditions and management standards for HMOs not covered by mandatory licensing, targeting areas where properties are inadequately managed or pose risks to occupants.

Understanding Additional Licensing

Additional HMO licensing applies to properties that are not subject to mandatory HMO licensing but are still considered HMOs under the Housing Act 2004. This means that within an additional licensing area, all HMO properties with three or more people from different households will be subject to licensing.

Local authorities can introduce additional licensing schemes in areas with high concentrations of poorly managed HMOs or where the standard of accommodation is insufficient.

Unlike mandatory licensing, which has a set national standard, additional licensing is tailored by each council to address specific local issues. This flexibility allows councils to target smaller HMOs or properties with particular management challenges.

Distinction Between Section 254 and Section 257 HMOs

As well as additional licensing schemes which apply to all HMO properties in a given area, council’s can also specifiy the exact type of HMO they are trying to target. 

There are two types of HMO’s that you should look out for when dealing with an additional licensing scheme. Understanding the difference between Section 254 and Section 257 HMOs is crucial for landlords:

  • Section 254 HMOs: These are properties where tenants form two or more separate households and share facilities like kitchens or bathrooms. They typically include shared houses or flats where unrelated individuals live together and share common amenities. Section 254 HMOs are generally subject to mandatory licensing if they meet the size and occupancy criteria.
  • Section 257 HMOs: These properties are converted blocks of self-contained flats that do not meet the Building Regulations 1991 standards and where less than two-thirds of the flats are owner-occupied. Section 257 HMOs are often included under additional licensing schemes due to their specific conversion requirements and potential safety issues.

Criteria for Additional Licensing

Additional licensing is implemented at the discretion of local councils, which may introduce it for any HMO that falls outside the mandatory licensing criteria but still requires regulation. The introduction of additional licensing often follows a consultation period with stakeholders and must be justified by evidence of poor property management or conditions.

Once a council decides to implement an additional scheme and it comes into force, all HMO properties in the area with three or more people from two or more households will require a licence. 

Criteria that may prompt a council to implement additional licensing include:

  • High concentrations of smaller HMOs or Section 257 properties with safety concerns.
  • Evidence of poor management practices affecting tenants’ welfare.
  • Areas with high levels of complaints or enforcement action against landlords.

How Do I Successfully Apply for an Additional Licence?

To complete your licence application, landlords and letting agents must:

  1. Check Council Requirements: Visit the local council’s website to determine if your property requires an additional licence and understand the specific licence conditions.

  2. Submit an Application: Complete the application form provided by the council, which typically includes information about the property, tenants, and management arrangements.

  3. Provide Documentation: Supply necessary documents such as safety certificates, proof of ownership, and details of property management arrangements.

  4. Pay the Licensing Fee: Fees for additional licensing vary by council and are used to fund inspections and enforcement.

After submitting your application, the council may inspect your property to ensure it meets the necessary standards and conditions outlined in the licensing scheme.

What Happens If I Don't Get an Additional Licence?

Failing to obtain an additional licence for an eligible HMO can lead to significant penalties. Landlords may face fines of up to £30,000 per unlicensed property offence and be required to repay up to 12 months of rent to tenants. Additionally, landlords may be listed in databases of rogue landlords, which can harm their reputation and future business prospects.

Compliance is essential. If you are uncertain whether your property requires an additional licence, our free property licence checker can help you determine your obligations.

What Do My Additional Licensing Fees Go Towards?

Fees collected from additional licensing are reinvested into local housing enforcement and inspection programs. They support the maintenance of high property standards and tenant safety. These fees are ring-fenced, ensuring they contribute directly to housing improvements rather than general council budgets.

Conclusion

Staying informed about additional licensing is essential for landlords of smaller or  HMOs. Compliance with additional licensing ensures the safety and welfare of tenants and helps maintain the quality of the private rented sector.

If your property may require a HMO licence, acting quickly to meet all conditions is vital. At Kamma, we automate licensing for over 100 letting agents, minimizing compliance risks and simplifying the process. Please book a demo to find out how we can assist you.

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