Additional Licensing Deadline Looms

Owners of small HMOs and many 257 properties in Portsmouth will need to get their Additional Licence application in by the end of this month. Be warned that the application process is immensely burdensome and is not something you can quickly flash through at the end of the month.

Also, sadly, once you get your draft licence, you will find the licence conditions to be heavily loaded against you – considering any infringement is a criminal offence, that is not good news. We have asked PCC for clarification but sadly, we have been ignored and thus will need to resolve these issues at greater cost to all involved (which ultimately will feed through to rents and impact even more of the most vulnerable in the city). 

Particular Issues

Unlike disaggregation where a few landlords faced losing their entire business over one specific change, Licencing is much harder to quantify. There is no one aspect which we would argue is obviously illegal and no one specific which impacts all landlords – but overall, there are many small issues which collectively conspire to be the final straw which has led to around 1,200 small HMOs being lost to the city.

Firstly, the application process is onerous and is proving expensive for most landlords. Consider a seasoned HMO landlord, perhaps 20 years' experience with HMOs around the south, previous experience of licensing here and elsewhere and never an issue raised by any of the local authorities under which he operates during that period.

You would think that this landlord would sail through the application process – but no, first he must prove he is a competent landlord who knows what he is doing. 20 years problem free experience is apparently irrelevant – you need a bit of paper to confirm you attended a course or something similar. Having proved you are competent; you then have a whole tranche of questions to confirm you are 'fit and proper'. You would think that is sufficient but then you need to show your properties are 'up to spec' so there are a whole range of certificates and other documents to submit – and add £400 to the ever-increasing bill to get a Fire Risk Assessment created for each property. Having proved you are competent and supplied a raft of documents to confirm your property is up to spec you will in our estimate, have typically run up a bill of around £3,000 per property and lost several days of your life.

At some point, your property will be inspected. You should look forward to this – it can be very entertaining. Many of those carrying out inspections are newly trained (and not trained by professionals but by others who were also trained 'on the job') – typically they have been recruited from the pool of 'housing officers' in the area and whilst they may have experience of tenant issues, they often have little experience of building issues. As a result, they rely heavily on the rules. In the past, we have allowed PCC to publish badly worded rules because we accepted that discretion would be used and the people working there had some common sense.

However, that has changed. Twice this year at PDPLA meetings, PCC have made it clear that the written standards are the MINIMUM acceptable standards. Couple this with naïve staff who focus on applying the rules and you have a recipe for disaster. We have already seen one case where a PCC employee inspected a property, spent a great deal of time measuring to confirm whether the room was 10.9 or 11.1sq m (against a requirement of 11sq m) but never noticed the missing bricks under the window.

We also have an example, in writing, where one of these PCC staff members asked that the floors be covered in plasterboard(having misinterpreted the rules relating to bare undersides of staircases).Given these experiences, it is perhaps easy to understand why, for the 1^st time, we are worried that the rules need to be clear and sensible whereas in the past, we have ignored the poor quality and weak definition.

Once you have been through the application process and had your property inspected – assuming you don't need to plasterboard your floors or something equally daft, you then receive a licence with 36 conditions or more – any one of which will leave you with a criminal record if you are found guilty of not meeting that condition.

We are concerned that some of the conditions may not be legal, though PCC are convinced that they are. We are more concerned that many of the conditions are so vague, we could be considered to have breached them if PCC staff chose to interpret them that way.

Some examples:

• You get the licence now. In 3 years' time you go abroad for 4.5 weeks but you did not name the person who will manage your properties in you absence when you applied for the licence 3 years previously.(We guess that is not what they meant, but that is how it is worded and if someone chose to enforce you would face a large fine and a criminal record).
• You have a garden, and the tenant is responsible for maintenance? If you don't sign up to the PCC brown bin scheme for garden waste collection, yes, you guessed it – another breach of conditions and potential criminal record.
• "The licence holder must ensure that references are requested from persons who wish to occupy the house" – so if you decide not to reference a potential tenant, which is often the case with students straight out of school, yes, another breach of conditions.
• New neighbours adjacent to one of your properties? You better know about the change and let the new neighbours know how to contact you else you are in breach of condition 24.
• Anti-Social Behaviour? Read conditions 25 and 26 – basically you do not have a leg to stand on unless you predicted it ahead of time and documented precisely what you would do should it occur.
• We love this one: "The licence holder shall attend a specified training course if and when required to do so by the Council", so when PCC say there is a course you need to attend, it is next Tuesday, it is in Aberdeen and will cost you £8,000 to attend what do you do?Failure to comply is a criminal offence.They might say 'but we would never do that' but they would also probably say 'we would never ask you to plasterboard the floor…'
• Condition 7 says you must get your gas safety from a 'gas safe association' but there is no such thing (it should be 'gas safe registered') – so you are in breach of condition if you use the right person rather than the non-existent one in the conditions
• Condition 15: Errors in the drafting considerably impact the meaning. (1) as it is a licence condition, it can't impose a requirement to provide an EICR when you apply for the licence, which predates the condition being imposed. (2) unclear what 'ensure a new report is submitted' means. Do they mean 'commissioned', or if they mean submitted, submitted to whom and when? (3) 'Carry out any remedial works identified' fails to differentiate between unsatisfactory (C1, C2) and satisfactory (C3). C3 coded items are recommendations with no requirement to undertake the work. (4) No idea what 'UKAS accredited Certification Body to A1.2 of the IET Electrotechnical Assessment Scheme' means – am I in breach? In the words of our legal advisor, "Overall, the condition is poorly drafted and significantly departs from the electrical safety regulations, which generates confusion and inconsistency."

And remember all those things you did at the outset to prove you were competent and knew what you were doing? Well, they count for nothing because you will be judged on whether you can send in all your certificates as they are updated each year – no wonder they asked for up to 40 new staff when they got approval for this scheme at Cabinet earlier this year.

What To Do?

Most importantly, get your application in one time.

But, do help us achieve our objectives:

• It is PDPLA's aim to see that the implementation details of both HMO Licencing schemes substantively improved to fully and appropriately assure that, throughout the full term of the licences granted, PCC may only exercise those powers granted to it under Housing Act 2004 proportionately and fairly, and fully in compliance with all other applicable statutory instruments and established law.
• That PCC PSH simplify the application process for new HMO licences and renewals, to reduce the burden on 'good' landlords which will free resources for PCC to do something about those who do not apply
• That PCC PSH re-word, re-state, or remove problematic, unclear or ambiguous Licence Conditions

We have a war room in Southsea every Monday afternoon plus a virtual war room – do join both, share your experiences, help us draft and compile appeals and complaints – the alternative is that untenable job creation schemes like this will continue to grow and further increase the burden on the ever fewer remaining landlords. We know many have left the city already – maybe we should follow them but first, do help us try the alternative which is to solve this problem.