AGENDA ITEM NO
REPORT TO:
Social Affairs, Health and Housing Scrutiny
Committee
REPORT OF:
Chief Housing and Public Protection Officer
REPORT NO:
CHPPO/112/09s
DATE:
14 October 2009
CONTACT OFFICER:
Mike Jenkins, Tel 01978 315508
SUBJECT:
Feasibility of Additional Licensing for
Houses in Multiple Occupation (HMOs)
1.
PURPOSE OF THE REPORT
1.1
To provide further information to the Social Affairs, Health and Housing
Scrutiny Committee about the feasibility of introducing Additional
Licensing for Houses in Multiple Occupation.
2.
SUMMARY
2.1
The Chief Housing and Public Protection Officer submitted a report on
6 May 2009 regarding the feasibility of introducing Additional Licensing
for HMOs. Members requested that Officers submit proposals for the
introduction of an Additional Licensing Scheme in the County Borough.
2.2
The power to designate an area as subject to Additional Licensing is
contained in the Housing Act 2004. The designation can apply to part
of the area or the whole of the area of the County Borough. The
designation can also apply to particular descriptions of HMOs.
2.3
A designation can only be made if all legal conditions specified in
sections 56 and 57 of the Act are satisfied.
2.4
Legal advice has been sought regarding the interpretation and
application of this legislation in the context of the Committee’s view that
'a Designation would assist in dealing with the issue's surrounding
HMO's'.
2.5
The advice has concluded that this view would not satisfy the statutory
criteria for bringing in Additional Licensing at this time.
2.6
The implementation of such a scheme without first satisfying the
conditions precedent set out in the Legislation will open the Authority's
decision to potential challenge.
3.
RECOMMENDATIONS
3.1
Having regard to legal advice it is recommended that the need for
additional licensing be monitored and reviewed in a further 12 months
following the implementation of the Private Rented Sector Improvement
Strategy Action Plan.
4.
INFORMATION
4.1
The private rented sector within Wrexham County Borough has an
important role in providing housing options for those not wishing or able
to consider home ownership, or for those to whom social housing is not
an option.
4.2
The Housing Standards Team is keen to ensure that the sector is
encouraged to meet, in a professional way and with decent quality
accommodation, the demands placed upon it by the wide range of
housing needs of tenants it accommodates.
4.3
The Landlord Accreditation Wales Scheme and the Wrexham Landlord
Forum are seen as playing an important contributory role in
encouraging landlords to provide safe, well managed and high quality
accommodation. However, the sector does display the poorest
compliance with minimum housing standards compared to other
sectors which require statutory regulation. HMOs are amongst the
more difficult to manage properties in the sector.
4.4
The Housing Act 2004 provides the Council with a range of tools to
improve management, amenity and safety standards within HMOs.
These include powers to inspect properties and duties to act where
non-compliance with standards is apparent.
4.5
A HMO is defined in section 254 of the Act and covers properties such
as shared houses, bedsits and buildings converted into self contained
flats. Schedule 14 of the Act lists properties that are exempt from the
definition.
4.6
Licensing provisions were introduced in the Act. These provisions
replaced all previous registration schemes that applied to HMOs. The
new provisions introduced three types of licensing.



4.7
Mandatory licensing covering the highest risk HMOs, namely
those made up of 3 or more storeys, with 5 or more
occupants sharing facilities (e.g. kitchen or bathroom);
Additional licensing, to cover other types of HMOs;
Selective licensing to cover other residential premises.
Mandatory HMO licensing was introduced in June 2006 and to date
has resulted in 24 HMOs being licensed in the County Borough. Work
is ongoing to ensure that any unlicensed HMOs are identified and
licensed.
Additional Licensing – Legal Conditions
4.8
The power to designate an area as subject to additional licensing is
contained in sections 56 and 57 of the Act. The designation can apply
to part of the area or the whole of the area of the County Borough. The
designation can also apply to particular descriptions of HMOs.
4.9
A designation can only be made if all legal conditions specified in
sections 56 and 57 of the Act are satisfied. These have been detailed
in report CHPP0/64/09s and are summarised below.
4.10
Before making a designation a local authority must satisfy the following
conditions: "consider that a significant proportion of the HMOs of that
description in the area are being managed sufficiently
ineffectively as to give rise, or to be likely to give rise, to one
or more particular problems either for those occupying the
HMOs or for members of the public"
 “ensure that any exercise of the power is consistent with the
authority’s overall housing strategy”.
 “seek to adopt a co-ordinated approach in connection with
dealing with homelessness, empty properties and anti-social
behaviour”
4.11
Section 57(4) goes further and states that the authority must not make
a designation unless:

“they have considered whether there are any other courses
of action available to them (of whatever nature) that might
provide an effective method of dealing with the problem or
problems in question" and
“they consider that making the designation will significantly
assist them to deal with the problem or problems (whether or
not they take any other course of action as well)”
Evidence relating to Problems associated with HMOs
4.12
The 2006 Wrexham Private Sector Stock Condition Survey reported
that the private rented sector contains the highest incidence of serious
health and safety hazards and also carries the highest repair costs of
all tenures in Wrexham, and those properties likely to be in greatest
need of repair are HMOs. The survey also reported that the level of
compliance with the old HMO Management Regulations 1990 was
inadequate or poor in 14.4 per cent of HMOs.
4.13
The Housing Standards Team has records for 544 known HMOs. This
compares to 962 estimated within the 2006 Stock Condition Survey.
Appendix 1 gives a breakdown of the location of known HMOs within
the County Borough and a summary of HMO related complaints for
2007/8 and 2008/9.
4.14
Legal advice has been sought regarding the interpretation and
application of the above in the context of evidence presented in report
CHPP0/64/09s and shown above. The legal advice makes specific
reference to the lack of evidence available to highlight problems and
explain how licensing would work to address these problems. The legal
advice provided is outlined below.
Considerations around Licensing
4.15








Below are listed some benefits and concerns in relation to licensing
over and above existing powers:
Licensing an HMO means that the property should not be operated as
an HMO unless a licence is in place.
The threat of enforcement action and a fine of up to £20,000 for
unlicensed HMO’s may assist in the identification of HMOs.
Licensing allows additional conditions relating to property standards
and the way the property is managed to be tailored to the property, in
line with minimum standards applying to HMO’s within the County
Borough.
If an area is designated for additional licensing, Landlords of HMO’s
already known to the Authority are likely to be the first to apply for
licenses. This would mean that for the initial phase of the designation
the Authority would be dealing with HMOs that are already known.
The licensing cannot be used to control the numbers of HMOs in an
area.
The overwhelming majority of Landlords within the County Borough are
co-operative and compliant in meeting requests by Officers to meet
minimum standards using existing enforcement powers.
Licensing costs may drive landlords to leave the sector and this may
increase the pressures on homelessness and affordable housing.
Licensing increases the administrative element for the Council and the
Landlord of securing compliance with minimum standards and this


would significantly impact on the team’s ability to conduct programmed
inspections.
The ability to meet the aims of the Private Rented Sector Improvement
Strategy would be compromised whilst arrangements to licence all or a
proportion of HMO’s took place.
A licensing fee can be charged when an application is made to cover
officer time, however, this is a one-off charge lasting for 5 years and
this would not provide a reliable revenue stream to maintain ongoing
activity relating to licensing in years 2 to 5
Legal Advice
4.16
Sections 56 and 57 of the Housing Act 2004 provide statutory criteria
which need to be complied with before the Authority makes a decision
on whether a Designation of Additional Licensing should be made.
Having considered the points put forward in Report (CHPPO/64/09s)
the Authority must make proper findings of fact and analyse the
evidence with care. Such findings must be reasonable in all the
circumstances.
4.17
After satisfying the conditions set out in section 56 (paragraph 7 of the
Report) the Authority would need to conclude that such a Designation
would significantly assist the Authority in dealing with the problems that
are faced. In the first instance therefore the Authority needs to identify
the problems faced by the HMO's and thereafter consider whether any
alternative course of action would be effective. Only then should the
Authority move on to consider whether a Designation would
significantly assist with the problems, despite any alternative courses of
action available. The reasoning behind any conclusion would need to
be evident from the minutes of the meeting.
4.18
If the Authority's desire is to deal with the problem of external and
internal conditions of HMO's as well as overcrowding, the available
evidence from complaints received as set out in the earlier Report
suggests that these problems are declining.
4.19
Minutes of the Meeting held on the 6th May 2009 detail that the
Committee felt that 'a Designation would assist in dealing with the
issue's surrounding HMO's'. Such a conclusion would not satisfy the
statutory criteria for bringing in Additional Licensing at this time. There
is a lack of sufficient evidence to highlight the problems experienced
together with a failure to identify how such a Designation would
significantly assist in dealing with such problems.
4.20 The implementation of such a scheme without first satisfying the
conditions precedent set out in the Legislation will open the Authority's
decision to potential challenge.
Process for making an Additional Licensing Designation
4.21 If all legal conditions are met the following steps that would need to be
taken prior to making an additional licensing designation.
Identify Description of HMO
4.22
The designation must specify the particular description of HMO causing
problems. Section 56(4) does allow a designation to cover all HMOs if
all conditions are satisfied. Evidence would need to be obtained to
show that a particular description or descriptions of HMO are causing
problems.
4.23
Currently, there is no evidence which identifies particular categories of
HMO within the County Borough as giving rise to amenity or nuisance
issues or non-compliance with minimum standards.
Identify Area to Cover
4.24
A designation can cover a particular area or the whole County
Borough. As described above a designation must satisfy all the
conditions contained in the Act. The designation should be applied to
areas where there is evidence that HMOs are causing problems.
4.25
There will be a tendency for areas with high concentrations of HMOs to
display greater instances of problems than some other areas; however,
as highlighted earlier in this report, there is insufficient evidence of
significant problems within such areas within the County Borough to
warrant a designation.
Consultation
4.26
Prior to making a designation a full consultation exercise must be
carried out. This authority must take reasonable steps to consult
people likely to be affected and consider representations made in
accordance with the consultation.
4.27 The consultation should include local residents, including tenants and
landlords, managing agents and other members of community who live
or operate businesses or provide services within proposed area. The
consultation should also include local residents and businesses in
surrounding area.
4.28 The consultation must give a detailed explanation of the proposed
designation and reasons for it. It must specify how the designation will
tackle specific problems and also the potential benefits of the
designation.
4.29
Affected persons should be given adequate time to give their views
and each should be considered and responded to. The results of the
consultation must be published and made available to the local
community.
General Approval
4.30
The National Assembly for Wales has introduced general approvals
which obviate the need for formal approval. This is in accordance with
section 58 of the Act.
4.31
This enables Authorities in Wales to introduce additional licensing
without the need for specific consent, however, all the requirements of
the Act and accompanying regulations and orders must be met and
account should be taken of Welsh Assembly Government guidance.
These requirements have been detailed above.
Notification Requirements
4.32
Once a designation is made the authority must publish a notice stating
that the designation has been made, whether it was confirmed or that a
general approval applied, the date on which designation was made and
any other information that may be prescribed. Copies of the
designation must be available to the public for as long as the
designation is in force.
Duration of Designation
4.33
A designation can last for a maximum of 5 years and cannot come into
force any earlier than 3 months after the date the designation was
made. The authority must from time to time review their designation
and can revoke it if they consider it appropriate to do so.
5.
EQUALITIES IMPACT ASSESSMENT
5.1
An equalities impact assessment is not required at this stage. Should
Additional licensing be introduced an equalities impact assessment will
be undertaken.
6.
RESOURCE IMPLICATIONS
6.1
The exact financial implications of introducing any Additional Licensing
Scheme in the County Borough will be dependant on the scope and
size of any scheme..
6.2
If Additional Licensing were to be applied to all known HMOs in the
County Borough it would result in a minimum of 520 HMOs requiring a
licence. (544 known HMOs less 24 HMOs already licensed). This
would have significant resource implications on the Housing Standards
Team.
6.3
It takes an average 17 hours to deal with one mandatory licence
application and it is likely that each additional licensing application
would take a corresponding amount of time to process.
6.4
It would take approximately 8,840 hours of officer time to deal with 520
licence applications.
6.5
It should be noted that HMOs found operating without a licence could
be subject to enforcement action and this would impact on the capacity
of the team to deal with licence applications as described above.
6.6
A licence fee can be charged by the Council to cover all costs incurred
in carrying out the licensing function.
6.7
The Chief Finance & Performance Officer has expressed concern
about the resources that would be required to progress an Additional
Licensing Designation. This comment is made in the context of the
current budgetary situation and the pressures on capacity to drive the
Council Priorities.
7.
LEAD MEMBER COMMENT
The Lead Member has been consulted on this report.
BACKGROUND PAPERS
(CHPPO/64/09s) – Social
Affairs, Housing & Scrutiny
Committee 06 May 2009 –
additional licensing of
houses in multiple
occupation
LOCATION
Intranet
WEBSITE INFO
http://www.internal.wrex
ham.gov.uk/MinutesData
/SocAffairs/sa06052009
m.htm