Houses in Multiple Occupation and Landlord Licensing - lessons from England

Landlord licensing is set to be introduced for HMOs in Northern Ireland following the Assembly’s passing of the Houses in Multiple Occupation (HMO) Bill. The Bill is currently awaiting Royal assent.

Although not solely focused on private rented properties, the HMO Bill is seen as a key component in improving regulation and standards within the sector. It is hoped the Bill will provide better protection for tenants living in houses of multiple occupation.

Landlord licensing has been in place in England since April 2006, following the enactment of The Housing Act 2004. There has been some useful case law that can give us an insight into problems and issues that have arisen; and how the licensing has impacted upon both landlords and tenants.

Thanet District Council v Grant, Divisional Court - lessons from England

The Defendant in this case was a landlord that owned a rented property in Thanet. Thanet District Council had designated the area as one in which landlords were required to apply for licences under the Housing Act 2004.  The Defendant was prosecuted for failing to obtain a licence in accordance with section 95 (1) Housing Act 2004.

The Landlord claimed that the local authority had failed to inform him of the licensing requirement, relying on the defence of ‘reasonable excuse’ under section 95 (4) of the 2004 Act. In the first instance the Magistrates Court accepted this defence. They found that Thanet District Council had failed to publicise the scheme and it had failed to discharge the burden of proving beyond reasonable doubt that the landlord did not have a reasonable excuse.

Did the Landlord have a reasonable excuse to not be licensed? 

The Council proceeded to appeal the matter to the Divisional Court. The council’s action in appealing the decision would appear to be illustrative of the importance being placed on enforcement within the English Councils, to ensure an effective licensing scheme. 

The Divisional Court allowed the appeal and found that the Magistrates Court had wrongly characterised the duty to communicate and inform the landlord. The obligation on a local housing authority under section 85(4) was not a duty owed to an individual landlord, and such a failure would not give rise to a reasonable excuse under section 95 (4) for failing to obtain a licence. The court found the landlord did not have a reasonable excuse.

It appears apparent that enforcement and prosecution is a vital component of ensuring landlord licensing operates effectively in England, and as such will have similar relevance in Northern Ireland to ensure the HMO Bill results in the benefits, and changes, intended. This case provides an example of the impact landlord licensing will have on landlords, and how it may be used to protect tenants.

The implications of the HMO Bill in Northern Ireland

In Northern Ireland, it will be essential for landlords and tenants of Houses of Multiple Occupation to be aware of the licensing requirements, specific exemptions, enforcement procedures when licenses are not in obtained; while also understanding how the standard of housing within the sector intends to be improved and controlled.

Housing Rights Solicitor Chris McGrath will be holding a lunchtime learning session on 1st June 2016 which will seek to cover all of these elements of the legislation.

Additionally the session will cover:

• Impetus for change – reviewing the previous legislative provisions and registrations scheme, considering its adequacy to regulate shared households
• Focus on the inclusion of the ‘fit and proper person test’ and ‘reasonable excuse’ defence within the new licensing regime.
• Review of the new enforcement procedures including fixed charge penalties
• How the Bill can improve standards of accommodation and benefit tenants
• Overview of the Departments continued intention to review the role of the private rented sector

As the case of Thanet District Council v Grant illustrates, there is much that NI can already learn from other jurisdictions in advance of the enactment of the new regime.