Renewing Mandatory HMO Licences
Anyone with a portfolio of HMOs across the region might reasonably expect a mandatory HMO licence renewal to be as simple and quick in Portsmouth as it is in other local authority areas, but sadly it is not.
The Legal Issue
- Where HMO renewal applications are concerned, the Licensing and Management of Houses in Multiple Occupation 2006 only permit a Local Authority to demand the property address and details of any relevant persons, alongside a declaration that there are no material changes. This had been instructed in an amendment to the original regulations in 2012 and, as indicated in the associated impact assessment, the only focus and objective was clear - to reduce the administrative burden and hopefully cost of renewal applications.
- The above was confirmed in a High Court case in 2017 where it was further clarified that the Local Authority are free to request additional information other than that mentioned above, but it needs to be made clear that it is voluntary to give.
- Local Authorities were further reminded of the High Court ruling and advised to design renewal processes accordingly in guidance issued to them in 2019.
PCC's new system does not differentiate between a new licence application and a renewal with an expectation to complete the form in its entirety. Whether this is due to lack of awareness or wilful ignorance of the above (or even inability of the new system to deal with it), It appears that Portsmouth City Council have not yet implemented their renewals process accordingly. It was not much of a problem before, as Licence application forms were relatively short and painless to complete. However, this is no longer the case with a copious number of pages to fill and information to complete, using a somewhat clunky system on top.
Those with licence renewals coming up, or those who are facing difficulties with the issuing of their renewed licence, should bear the above in mind.
Further details of the above-mentioned regulations and court cases can be found at the bottom of the article.
The Issue With PCC Mandatory Licence Renewals
In processing a mandatory licence renewal, Portsmouth City Council (PCC) do not use the information already on file for an expiring licence unless the applicant has explicitly requested that the data be transferred from PCC's old records to their new system prior to submitting the renewal application. But a licence holder will not naturally know about PCC's internal system changes, and this crucial point is not communicated in the reminder email that is sent ~12 weeks before a licence expires.
PCC limit the duration of licences to 2.5 years, rather than the standard 5 years, where a renewal application is submitted less than 14 days prior to expiry, but will not accept the simplest form of renewal application where there are no material changes, as offered by other local authorities, and as required by law (see Notes below). This is unfairness systematically baked into PCC's scheme.While straightforward renewals in other local authority areas typically take under 20 minutes , PCC's process demands significantly more time. On average, experienced agents spend 90 minutes per application, while self-managing landlords with no experience of the system will take considerably longer. This increased complexity increases the chances of errors to be introduced and comes with higher costs, both in time and associated agent fees. The biggest risk is that a landlord may only be issued a one or two year licence due to an error in completion meaning they will pay a higher price and have to pay again a year later. A local agent confirmed saying, "Not one of my landlords have filled it in correctly (including a portfolio investment landlord with multiple HMOs across multiple cities), even if already done one in prior years, and I've just had to step in for a new landlord who was about to be issued a one year licence in the next few days due to a simple misunderstanding when completing. I got there just in time, by accident, and he wouldn't have resolved otherwise."
For those in the know, data transfer can be requested of PCC in advance of applying, and this is less error-prone and easier for the self-managing landlord. A licence holder recently took advantage of this little-known facility, and still spent a full hour in Civic Offices for a singular licence renewal plus the time spent getting additional documents ready to present in person and travelling. The service provided at Civic Offices was friendly and helpful, but this approach is no less time-consuming. Ideally, we would hope PCC could complete the data transfer without the landlord being present, thus allowing the landlord to then complete any missing items – but we fear the 'complete this step before you can start the next' coding of the PCC system makes this unlikely.
In the 2023 public consultation on Mandatory Licencing, PCC enticed landlords to agree to the mandatory scheme changes by saying it would be lower cost. But between the accreditation requirement introduced for a 5-year licence, which also has a cost attached, and the excessively time-consuming renewal process, it has proven to be quite the opposite. And now licencing fees in Portsmouth are to rise by 11% to add insult to injury. (And fees for this scheme are already significantly higher than previous).
PDPLA members and other affected landlords are encouraged, on receipt of an email reminder that their mandatory licence is expiring, to contact the HMO Licencing team to request the data transfer from their expiring licence into the new system, that is, if they will not be commissioning an experienced agent to undertake the work. This does make completion of a renewal application simpler and less error-prone for the uninitiated even though no less time-consuming.
For those who choose to use an agent to make a licence renewal application, you may have a reasonable case for reclaiming, say, ~75% of the agents charge from PCC given that they have failed to offer a renewal form in compliance with the law (see Notes below), and it is that failing driving the agents workload and that level of expense for the landlord.
We urge PCC to:
1. Review and streamline their mandatory renewal application process to comply with the 2012 regulations.
2. Enhance communications to ensure landlords clearly understand the steps required for a simple renewal application.
3. Address inefficiencies to reduce the time and cost burden on landlords, delivering a fairer and more transparent service.
4. And to review the support that can be provided
Notes:
This is a composite article, drafted by a number of members of the PDPLA.
In para 3.5 of the 2019 government guidance on HMO licencing issued to local authorities, a 2017 High Court decision is referred to with a reminder that a local authority is not entitled to demand more information than specified in amended regulation 7 of the 2006 regulations with regard to renewals, see:https://www.gov.uk/government/publications/houses-in-multiple-occupation-and-residential-property-licensing-reform-guidance-for-local-housing-authorities/houses-in-multiple-occupation-and-residential-property-licensing-reform-guidance-for-local-housing-authorities
TheHigh Court case referred to in the guidance is:Gaskin v Richmond LBC [2017] EWHC 3234 (Admin) . It was determined by the justices that the local authority was not entitled to any information further than that specified in The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 as amended by The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions)(Amendment)(England) Regulations 2012 .
The explanatory note for the 2012 regulations states: "Regulation 2(1)(a) and (c) amend regulation 7 of the 2006 Regulations so that, where an application under Part 2 or 3 is a renewal application (that is, where a licence of the kind sought already exists at the time the application is made), the information required by paragraph 2(c) to (g) of Schedule 2 to those Regulations is not required. Instead, the applicant is required to declare that the information in question has not materially changed since the existing licence was granted, or to set out any material changes as part of the declaration. The form of declaration is added to Schedule 2 by regulation 2(3) of these Regulations.".