One of the main aims of Mandatory HMO licensing schemes is to make sure that for each rented property there is a person or company (the licence holder) who is legally accountable for it. The licence puts responsibility on the licence holder for the proper management of the rented property, for preventing nuisance or antisocial behaviour by the residents and for keeping the property safe and in good order. Every licence contains legally binding conditions that govern these issues.
1. Who is legally responsible for offences under the Housing Act 2004 where a property is registered as a HMO?
Schedule 1 part 1 of the Housing Act 2004 requires in cases where the premises are a HMO or licensed under selective licensing, enforcement action must be taken against the holder of the licence.
2. Who is legally responsible for offences under the Housing Act 2004 where a property is not registered as a HMO?
Where the premises are not licensed under selective licensing, or are an unlicensed HMO, then the action must be taken against the person having control, or the person managing the premises.
3. How does the council decide who is the person having control or managing the premises?
Section 263 of the Housing Act 2004 provides that a ‘person having control’ includes the person who receives the rack-rent as agent or trustee of another person. The ‘person managing’ includes a person who receives rents or other payments as agent or trustee.
4. What are the implications for a HMO Licence where my company is registered off shore?
Where the owner is offshore-registered, the local authority will consider the option of taking action against the person having control or managing the premises, as the owner may well have been required to appoint managing agents to collect the rent and manage the premises. Management arrangements must be satisfactory and the licence holder must be a fit and proper person.
If as a landlord you live abroad or your business is registered abroad you will need to think carefully about whether or not you are able to manage the property adequately in order that you meet the requirements of the Housing Act 2004. The evidence you have will then need to be submitted with any HMO application in order that the council can consider whether it is appropriate to grant the Licence.
5. I am a managing agent. Will I be taking a risk if I agree to hold the licence for my overseas client?
You will take on legal liability for complying with the licence conditions or receiving statutory notices from the Council. But you can minimise that risk by making sure there will be robust management arrangements in place before you sign your contract with the property owner. We advise that you scrutinise the licence conditions in advance and determine exactly what is needed for you to comply in full over the term of the licence. For example, among other things there need to be arrangements for:
- Dealing with emergencies inside and outside office hours;
- Efficiently carrying out repairs and improvements to the property if a defect occurs or if the council identify hazards (including arrangements for funding such works)
- Addressing complaints of nuisance to other properties or of antisocial behaviour by the tenants.
6. If I become the licence holder on behalf of an overseas landlord, what happens if something goes wrong? Will the Council take legal action against me?
The council will follow its Enforcement Policy and if appropriate to do so enforcement action would be taken against the licence holder as required by Schedule 1 part 1 of the Housing Act 2004.
7. I am an overseas landlord and I have appointed an agent to hold the licence for my property. What happens if I want to change agent?
Unfortunately the law forbids the transfer of the licence from one person to another, so you will have to apply for a new licence. For this reason you will want to discuss the proposed management arrangements fees, etc. with the agent before signing the contract to make sure that you are completely happy with them.