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MANDATORY LICENSING OF HOUSES IN MULTIPLE OCCUPATION: GUIDANCE FOR LICENSING AUTHORITIES
PART 1 OVERVIEW OF LEGISLATION
1-1: THE HMO LICENSING ORDER
(Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000, as amended)
The Civic Government (Scotland) Act 1982 sets out a general system for licensing a range of activities. New activities can be added by Order, and such an Order can make changes to the general system as it applies to that particular activity.
What is the licensable activity?
A person needs a licence if they give permission for a house to be occupied as an HMO. Only the owner of a house can give such permission. The application for a licence must therefore be made by the owner, even if the property is leased to or managed by another person or organisation.
What is the definition of an HMO?
A house is an HMO if it is the only or principal residence of three or more qualifying persons from three or more families.
In this context, "house" includes any part of a building occupied as a separate dwelling. The legislation covers not only ordinary houses, flats and bedsits, but all residential accommodation, including hostels, student halls of residence, staff accommodation in hotels or hospitals, and so on. Houses within a building which, although otherwise separate, share use of a toilet, personal washing facilities or cooking facilities, are taken to form part of a single house.
There is no statutory definition of "principal residence". The Order states only that a student's term-time residence is to be taken as their principal residence, and that a hospital is not the principal residence of patients. It is generally agreed that principal residence is not simply a matter of the number of days spent at an address, but that it depends on the "quality of occupation". Even a hostel where people stay for only a few months may be their principal residence for that period.
Where an owner of a house lives there and lets out rooms, or shares with friends, the owner is not counted as a " qualifying person", nor are any members of their family that live with them. The requirement is that they should have a heritable right of ownership. If the owner living in the house is a joint owner, it does not matter how small their share of ownership may be.
The definition of "family" is set out in full in paragraph 2(5) of the Order. It includes unmarried and same-sex couples. It does not include cousins.
Are there any exemptions from licensing?
There are three main classes of property that are exempt from the HMO licensing scheme.
- Religious communities are exempt because of their spiritual and voluntary nature.
- Properties where each occupant, or at least one member of each occupying family, has a heritable right of ownership are exempt, as are those owned by communal groups. In this case the group must be established as a
co-operative housing association, the management of which is undertaken by general meeting. - Accommodation provided as part of a service registered with the Care Commission as:
- A care home service
- An independent health care service
- A school care accommodation service, or
- A secure accommodation service.
For these categories, the Care Commission sets and monitors standards for the accommodation in which the service is provided, as well as the service itself. In other categories, particularly housing support services, the Care Commission only regulates the service provided, and the accommodation is not exempt from HMO licensing.
Crown property is also exempt, but all other HMOs must be licensed, including those operated by local authorities and other public bodies.
What sanctions are there for operating an HMO without a licence?
It is a criminal offence to operate an HMO without a licence. The maximum penalty is level 5 (currently 5000).
How are property managers or letting agents affected by licensing?
If the day-to-day management of the property is carried out by someone other than the owner, they will be named on the licence as a joint licence-holder.
Letting agents or property managers should check that their clients are licensed where necessary. It is a criminal offence for anyone to act as an agent for an unlicensed owner of a licensable HMO, by doing anything "which directly permits or facilitates the occupation of that house" as an HMO. The maximum penalty is the same as for the unlicensed owner.
If a licensing authority suspects that a house is an HMO, they may ask the agent for the owner's name and address, and it is an offence to fail to comply with such a request. The maximum penalty is level 3 (currently 1000).
1-2: GENERAL LICENSING PROVISIONS
The statutory procedures for all licensing activities are contained mainly in Schedule 1 of the Civic Government (Scotland) Act 1982. Part 2 of this guidance provides advice and good practice on how the procedures should be implemented for HMO licensing.
What happens when someone applies for a licence?
The owner submits their application to the licensing authority, together with the appropriate fee. The owner must also display a notice outside the property for 21 days, informing the public of the application and how to submit objections. (Women's refuges are exempt from this requirement, but the local authority may notify appropriate neighbours by letter.)
The licensing authority has to satisfy itself:
- That the applicant, and any manager of the HMO, is a fit and proper person to hold a licence.
- That the property is suitable for use as an HMO, for the proposed number of people.
The authority must copy the application to the Chief Constable for the area, so that he can tell the authority if the applicant or manager have any relevant convictions. He may also provide information about any relevant complaints against the applicant or manager, or in relation to the property. The authority must also copy the application to the fire authority, who will be involved in deciding whether adequate fire precautions and means of escape are provided.
Officers of the licensing authority (and probably the fire authority) will usually visit the property to check the physical standards and facilities, and the applicant will be required to provide evidence of appropriate management standards, such as forms of lease and rent records. Officers of the licensing authority have rights of entry and inspection to make these checks. They will tell the applicant what changes (if any) need to be made before the property will be considered suitable to be an HMO.
Any person may make an objection to a licence application. The authority must copy any such objection to the applicant, and must notify the applicant of any other information they intend to take into account in considering his application. The applicant must at least be given an opportunity to comment in writing on any objections and other information, and the licensing authority may give the applicant and any objectors an opportunity to be heard in person.
Decisions on licence applications are made either by the Licensing Committee, or by an officer with delegated powers. Licences are usually granted subject to conditions, which ensure that the HMO is properly managed and appropriate standards are maintained throughout the period of the licence. If the HMO is not managed by the owner, the owner and manager will be named as joint licence-holders.
The licensing authority must keep a register of applications and the decisions made on them.
Is there an appeals process?
Either the applicant or an objector can appeal to the sheriff against the decision of the licensing authority to refuse or to grant a licence. The appeal must be made within 28 days of the decision being made. The sheriff may reverse or modify the authority's decision, or he may return the case to the authority to reconsider, with his reasons.
How long does it take to apply for a licence?
The licensing authority must make a decision within 12 months of receiving an application for a licence. This is longer than the normal period of 6 months for other types of licence, to allow the applicant to make physical changes to the property if necessary. However, authorities are not expected to take 12 months if no physical changes are required.
Can the HMO operate while an application for a licence is being considered?
Generally no. The owner must obtain a licence before the HMO is occupied. However, where an application has been made, the licensing authority may decide to take no action. Alternatively they may consider granting a temporary licence until the application is decided.
How long is an HMO licence valid? Can they be renewed?
A licence may be granted for any period up to three years. Most authorities award all licences either for one year or for three years, but some vary the duration of individual licences depending on an assessment of various factors in the application. An application for renewal must be made before the end of the licence period, and goes through the same process as for the initial application, including the opportunity for objections to be made. Some authorities award renewals for a different period (longer or shorter) than the original licence.
If the day-to-day management of the property is carried out by someone other than the owner, they will be named on the licence as a joint licence-holder. If there is a change of manager, the licence continues in force for six weeks from the date of the change, to allow the owner to make a new application. Provided a new application is made within that six week period, the original licence then continues in force until the new application has been decided.
If a licence-holder dies, the licence is deemed to be granted to his executor, and remains in force for three months from the date of death. The licensing authority may agree to extend that period, if this is necessary to allow the estate to be wound up.
Can changes be made during the period of the licence?
If there is a material change of circumstance affecting the licence-holder or the operation of the HMO, the licence-holder must inform the licensing authority as soon as possible. No material change must be made to the property itself without the prior consent of the authority.
The authority can vary the terms of the licence at any time, either at their own discretion or if the licence-holder asks them to do so (for example to make a change to the property). The licence-holder must be given notice and an opportunity to be heard before a variation is imposed, and can appeal.
When can a licence be suspended or revoked?
A licensing authority can suspend a licence if in their opinion:
- The licence-holder is no longer a fit and proper person to hold the licence
- The HMO is causing or is likely to cause undue public nuisance or a threat to public order or safety
- The licensing conditions have been breached.
The authority can take into account the behaviour of people in or around the HMO. In terms of public order or safety this could include people demonstrating against the HMO or someone living there, as well as actions by the residents or their visitors. The process for suspension includes a hearing and appeal process.
A licence may be revoked by the sheriff if a licence-holder is convicted of a relevant offence in relation to the licence. The relevant offences deal with breach of licensing conditions, preventing the inspection of the HMO or of relevant records, and failing to obtain permission for or inform the licensing authority of material changes. All these offences are punishable by fines, but the sheriff may also decide to revoke the licence, and may disqualify the licence-holder from holding a licence for up to 5 years.
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