Houses of multiple occupancy – multiple hurdles to overcome

Nottingham County Council v Parr & Anor [10.10.18]

The Supreme Court have dismissed an appeal ruling that local authorities can restrict the type and class of tenant who can rent rooms in a house of multiple occupancy (HMO).

Background

Nottingham County Council (Appellant) granted HMO licences to Trevor Parr Associates Ltd and Dominic Parr (the Respondents) in relation to two properties. The attic rooms in each property were being below the minimum size specified in the Appellant’s guidance and as such the HMO licences prohibited the use of the attic rooms for sleeping.

The Respondents challenged these restrictions in both the First-Tier Tribunal (FTT) and then the Upper Tribunal (UT), who found the properties had an over-provision of communal space which compensated for the small size of the attic rooms. Conditions were therefore imposed that the attic rooms may only be used for sleeping accommodation by a full time student who resides in the bedroom for a maximum ten months in each year. A further appeal to the Court of Appeal (CA) upheld the decision of the FTT and UT and imposed further conditions that the communal space be kept available for communal living only and that no bedroom was to be let to persons other than full-time students.

The Appellant appealed to the Supreme Court contending that the power to impose conditions under s.64 and 67 of the Housing Act 2004 cannot be used to limit the class of persons for whom the HMO is suitable and so the conditions imposed by the FTT, UT and CA is unenforceable.

Decision

The Supreme Court unanimously dismissed the appeal. They did however change the conditions to remove the provision that the rooms must only be occupied for a maximum of ten months a year.

They concluded that the wording within the legislation was sufficiently wide to include the conditions imposed by the FTT, UT and CA. In addition, the legislation also confirms that the manner of occupation and the type of occupants is relevant in the context of HMOs.

The Supreme Court agreed with the CA’s inclusion of the condition that the whole house must be occupied by students to ensure cohesive living and considered that the condition limiting the occupation to persons engaged in full time education to be rational and enforceable. However, The Supreme Court considered that the requirement limiting occupation to ten months in each year was irrational and should be removed.

Comment

This clearly has an impact on the types of HMO’s that can be issued by local authorities and provides a wide discretion to local authorities on what restrictions they can impose. Whilst providing protection for tenants living in HMOs, it could limit available properties if they are for a certain type of tenant, such as students. Equally this will limit a landlord’s opportunity to find tenants to let their rooms out to.

This decision highlights that local authorities, when justified, have the ability to address licences in terms of suitable class of occupants. The recent Licencing of HMOs Order 2018 limits the scope of local authority powers, as the Order provides for rules on minimum room size. There is a transition period for existing HMOs, as in this case, but once they reapply for a new licence the attic room will fall short of the minimum room requirement and will not be able to be used. Whilst this case lets us know the discretion available to local authorities, it is surely also a lesson learned in being aware of potential changes to the law.

Related item: Landlords and tenants beware – the real impact of the licensing changes to HMOs