A house in multiple occupation (HMO) is a property where multiple households share common areas, such as a kitchen or bathroom. HMOs are often converted from larger houses that were originally designed for a single family.
Your home is a house in multiple occupation ( HMO ) if both of the following apply, at least 3 tenants live there, forming more than 1 household. you share toilet, bathroom or kitchen facilities with other tenants.Understanding Article 4 is crucial for HMO landlords and one legal expert says there is a big difference between HMO licensing and planning permission.
Des Taylor of Landlord Licensing & Defence was recently contacted by a very confused client who asked, “my local council is insisting I get planning permission for my HMO in an Article 4 area or obtain a Certificate of Lawful Use. This situation is becoming increasingly common, leaving many landlords confused and sometimes councils refusing to issue licences; while licensing and planning are distinct legal areas, each with their own legislation, they can create a complex scenario. Council licensing departments are increasingly making these planning-related demands on behalf of their colleagues.”
Landlords who receive the demands are frequently asking if the requests are legitimate.The answer, Taylor says, lies in a recent Upper Tribunal case “while not entirely new, the case established that licensing departments can restrict a licence based on planning requirements within an Article 4 area.”
For existing HMOs in Article 4 areas (where the automatic right to convert a residence into a small HMO has been removed by the council), obtaining a new licence can become more complicated.
“Licensing departments are increasingly requesting proof of planning permission or a Certificate of Lawful Use during the application process. This is essentially due diligence. The council wants to ensure HMOs comply with planning restrictions within Article 4 areas.”
However, landlords with established HMOs prior to the Article 4 implementation can demonstrate this for licensing purposes.
“While not legally mandatory,” Taylor explains, “a certificate of lawfulness is similar to a PAT test certificate demanded for portable appliances. It’s a way for the council to ensure compliance.”
However, he claims that most council planning departments will try their utmost to deny a Certificate of Lawful Use (CLU) – after all the reason they introduced the Article 4 direction was to stop the proliferation of HMOs. So wise landlords should avoid applying for CLU and use other methods that cannot be contested so easily by the council.
He says that landlords can prove established use with tenancy agreements and other supporting paperwork to those tenancies and adds: “If you have agreements showing consistent HMO use before Article 4, that should suffice. Unfortunately, some licensing departments may resist accepting alternative evidence, and appealing a rejected licence or restricted licence to the First-tier Tribunal can be costly and time-consuming.
“Landlords with documented proof of pre-Article 4 HMO use shouldn’t face licensing issues. But if the licensing department protests or refuses to accept the evidence, professional advice is crucial.”
Having a ‘refusal to licence’ on your record as a landlord is really bad news as you will have to declare this on every licence application for the rest of time as it is on your record for ever. A refusal to licence counts as a serious black-mark not only for licensing but also with mortgage providers and insurers. Councils can even use it to get you declared ‘Not fit and Proper’ as a landlord which could destroy your entire business.
Taylor says that legal representation will strengthen a landlord’s case and demonstrate their understanding of the process.
Key takeaways for HMO landlords worried about Article 4 directions:
- Gather evidence of pre-Article 4 HMO use (tenancy agreements, rent receipts);
- Seek professional help for navigating licensing and planning complexities;
- Invest in professional advice upfront to avoid costly appeals later;
- Meticulous record-keeping is essential for future reference.
Taylor concludes “by understanding these procedures and seeking professional guidance when needed, landlords can ensure a smoother licensing process for their HMOs.”
Wales reconsiders HMO council tax policy
The Welsh Government is consulting on council tax rules for Houses in Multiple Occupation (HMOs), where each unit is charged individual council tax charges, often increasing costs for landlords.
The consultation, closing on 26 November, explores options, including aligning with England’s approach, which treats some HMOs as single dwellings for tax purposes.
Rebecca Evans MS, Welsh Cabinet Secretary for Finance, has invited feedback from taxpayers, councils, landlords, HMO owners, and tenants on the proposals.