257 / 2 people / No Licence Needed

This month we learnt that a property converted into 2 flats which technically is a 257 (see definition below) does not need an HMO Licence if it is rented to 2 people or less. Unfortunately, a number of members had already spent many hours submitting HMO Licence Applications for such properties – the good news is that they will get their application fee refunded, the bad news is the time, stress and hassle of the past 9 months cannot be recompensed. We have always argued that no evidence of the need to improve 257's was included in the justification for Licensing and this is just one more example of the struggle even the Licensing team have in deciding what to include and how to handle it.  

What is a 257 and how to avoid needing a licence

A 257 HMO is a building which has been converted into self-contained flats which does not comply with appropriate building standards and which less than 2/3rds of the self-contained flats are owner occupied.

The 'appropriate building standards' are defined as "building standards equivalent to those imposed, in relation to a building or part of a building to which those Regulations applied, by those Regulations as they had effect on 1st June 1992" for buildings converted before 1992 and "the requirements imposed at the time in relation to it by regulations under section 1 of the Building Act 1984" for any converted later.

So obviously, to avoid the need for a licence, all one needs to do is to bring the property up to the building standard appropriate at 1992 or later if appropriate. 

What Has Changed

As above, a 257 is a particular type of HMO where a property has been sub-divided into self-contained flats without meeting or having been shown to meet a particular building standard.

Now, we all know the definition of an HMO differs depending upon whether you are talking about Council Tax, Planning or Licensing but for our purposes it is very simple - a dwelling shared by 3 or more unrelated individuals.  So whether a couple and a friend, siblings and a partner, 3 friends - they are all HMO's (maybe not siblings and a partner but the key thing is, 3 or more people).

So, a property with only 2 people cannot be an HMO and therefore does not need licensing.

The problem is that PCC appear to have forgotten that a dwelling needs to be an HMO and decided that any property that met the 257 criteria should be included in the Additional Licensing scheme regardless of the number of occupants. Fortunately, common sense has now prevailed and the rules now recognise that a property must always meet the definition of an HMO (3 or more unrelated occupants) in order to need a licence and within that subset of properties, there will be some which are also 257 properties and these will obviously need to be treated differently (though why and how has never been detailed properly as you can see from some of the debates about EPC's, power supplies in communal areas and properties without communal areas). 

Aims Of Portsmouth's Licensing Scheme

 Just to remind ourselves, this is what the team told councillors in their justification for this bureaucracy:

Aim 1: To protect private rented tenants of HMOs from poorly managed and maintained properties

Aim 2: To effectively regulate HMOs in the private rented sector by identifying an individual responsible for the management and conditions of the property, ensuring consistency of standards across the city for HMOs in the private rented sector

Aim 3: To drive up housing standards in properties where there is poor management, need for repairs, amenity and safety issues

Aim 4: To enable council officers to utilise enforcement powers effectively to significantly drive up housing standards, housing management and the wellbeing of tenants in high risk properties

Aim 5: To support good landlords to operate within the area and make it easier to identify and enforce against rogue landlords

We should have paid attention at the time, but we never realised the whole scheme was going to be so onerous and painful for good landlords with well managed properties.

Retrospectively, we can now say:

Aim 1 makes no sense or more accurately, grammatically it is nonsensical. If we are going to be picky, Aim 2 is also grammatically incorrect (it needs an 'and ensure' as opposed to ', ensuring' or a closing clause but at least we can guess what is intended.

These are just examples - all 5 can be driven through by a very wide grammatical correction truck. We make this point  not out of pettiness - but these are legal documents which will be used as the basis of controlling and affecting peoples homes and livelihoods and are very likely to be used in court to determine legality or otherwise. Given that a small infringement of any part of the rules seems to meet with the harshest treatment from PCC officers, it horrifies us how lax and imprecise they are allowed to be in comparison.

What We Said in July 2022

Back then, in our response to the consultation of whether to introduce Additional Licencing – apart from highlighting the flawed nature of all the data used and the analysis based upon it, we included this section:

Why You Cannot Include 257s

257 HMOs are a complex area of law and the Councils main task will be the identification of these HMOs – there were only 159 identified during the last period of Additional Licensing and assuming that any major issues with them will have been identified and resolved, we would argue that it is not cost justified to include them in any future scheme.

If the Council do decide to include them, then:

Step 1 - the Council will need to identify which converted blocks within the city do not comply with the Building Regulations. Are the building control team aware of the increased workload that they may be burdened with? Should this task not have already been completed prior to this consultation. Or as part of it? An expert advised us that in big old buildings, for a conversion carried out in the 50's or 60's, just to ascertain whether "the conversion did not comply with the appropriate building standards and still does not" would require the skills of a very experienced and informed surveyor. It is also likely to require some destructive investigation.

Step 2 – identify how many flats within the block are rented (must be more than a 3rd). This will mean contacting all freeholders and requesting the details of the occupation of each flat. Assuming a low response from this, the Council will need to door knock. This will of course be labour intensive. Should this not have been completed as part of the consultation process?

Step 3 – Constantly monitor 257 HMOs to ensure that 1 flat has not been sold to an owner occupier meaning that the building is not classified as an HMO anymore. It is likely they will therefore need their own set of licence conditions which is not outlined within this proposal (such as inform the Council when leaseholds are sold etc).

Due to the reasons above and the struggle to identify 257s within the city, we believe that they should not form part of this proposal. Also, in addition to this there are several 257s that do not have any common areas (2 storey, 2 flats 2 separate entrances), what actually is the Council then licensing?

And properties where the rented threshold is missed by 1-2% - these cannot be licensed under current rules, so should we assume that these properties are fine and do not need attention / is the council creating a loophole for rogues to avoid licensing by selling 1 flat on leasehold for example…

For the very limited number of properties, the general lack of evidence of major problems in this area and the huge workload involved, we strongly advise that 257 type properties are not included in any future scheme. 

What We Said Since

 257's which are holiday lets do not need a licence – more here: https://pdpla.com/news/when-is-a-257-not-a-257?

Various points, including this one, "At the public consultation stage, we were told 257s of only two-storeys, or only 2 flats, or with no common entranceway would be out of scope of ALS. That changed with no communication or explanation" formed part of this article: https://pdpla.com/news/portsmouth-hmo-licensing-update

Then there is / was the confusion on EPC's: https://pdpla.com/news/epcs-on-257s

And there is much, much more – just login to the member area and search on 257 or HMO or Licensing and wile away the hours remembering all of the travails of the past 3 years….

How does licensing fit in the wider strategy?

 It is also interesting that, "The authority must ensure that any exercise of the power is consistent with the authority's overall housing strategy." – given that most of the strategy relating to the PRS depends upon working in partnership with local landlords it is hard to see where the consistency is here.

Also, "The authority must also seek to adopt a co-ordinated approach in connection with dealing with homelessness, empty properties and anti-social behaviour affecting the private rented sector, both—

(a)as regards combining licensing under this Part with other courses of action available to them" So that is not going well either.

But the good news is that a few of us have a few less properties needing a licence – until one of the tenants has a partner move in, that is….