What if I Don't Apply?
Offences Relating to Licensing
There are a number of measures in law aimed at ensuring compliance with the HMO Licensing Regime. Offences are:
- failure to licence a HMO
- exceeding the number of occupants specified in the licence, and
- failure to comply with any conditions specified on the licence
Any person involved in the control of an HMO may be subject to prosecution for failing to licence a HMO with the Local Authority. Fines for non compliance can be severe (up to £20,000). In proceedings against a person for this offence, it is a defence that a full application had already been made but not yet decided upon. In all cases it is a defence that there was a reasonable excuse for non compliance.
Failure to comply with the conditions of the licence may result in the Licence Holder being prosecuted in the Courts and fined up to £5,000.
Further consequences to not applying for a HMO licence
- Any tenant of an 'unlicensed HMO' may be able to make an application for a Rent Repayment Order. This can result in the landlord having to pay back up to 12 months worth of rent to the tenants
- No 'section 21 notice' may be given in relation to a short-hold tenancy of a part of an 'unlicensed HMO' so long as it remains such an HMO
- Where the Local Authority is satisfied that there is little likelihood of an HMO becoming licenced, it is under a duty to take over the management of the property until such time as a satisfactory licensing arrangement can be found. This is done by way of an Interim Management Order (IMO) for up to a period of 1 year. The Local Authority will manage the property and recover the costs from the rent or the owner. They cannot assign a new tenancy without agreement of the owner. The IMO allows the Local Authority to make sure;
- Immediate steps are taken to protect the health, safety or welfare of the occupiers of a house or
- Immediate steps are taken to protect the health, safety or welfare of the other occupiers or landowners in the neighbourhood; and
- Any other appropriate steps are taken to ensure the proper management of the house until such time as the HMO can be licenced or otherwise a Final Management Order is made
- The Local Authority may also issue a management order where it needs to do so to protect the occupants or neighbours of an HMO from 'harm'. Illegal eviction of occupants may be considered as 'harm' for these purposes
- The IMO may be followed up by a Final Management Order (FMO) for up to a period of 5 years where the landlord has not complied with the regulations.Under a final management order the Local Authority will take charge of the property, including being able to grant new tenancies and recover all costs through the rent. Excess rent will be repaid to the owner
- There may be other legal consequences (depending on the insurance cover obtained and the mortgage agreement in place etc.)
- Landlords or managers prosecuted for failure to licence an HMO or for breach of a licence condition are also likely to find themselves deemed NOT a 'fit and proper person' and as such they will be unable to obtain an HMO licence on any other property they are in control of
- In addition this is likely to affect their ability to get a licence through Rent Smart Wales and consequently will be unable to manage any of their rental properties