Clause 49: Duration, review and revocation of designations

146.     Clause 49 requires a designation to last no longer than 5 years. An LHA must, from time to time, review a designation. On revocation of a designation, the LHA must publish notice of the revocation in such a manner as is prescribed by regulations.

Clause 50: Requirement for HMOs to be licensed

147.     Clause 50 provides that every HMO to which the Part applies must be licensed other than one covered by a temporary exemption notice or which is subject to an IMO or FMO. It explains that a licence authorises occupation of the HMO by no more than the maximum number of persons specified in it. It also provides that the appropriate national authority may determine by regulations when licensing provisions apply in the case of certain converted blocks of flats (see clause 193). The clause places a duty on LHAs to take reasonable steps to ensure that applications for licences are made to them in respect of HMOs required to be licensed in their area.

Clause 51: Temporary exemption from licensing requirements

148.     Clause 51 provides that an LHA may, if they think fit, serve a temporary exemption notice on managers or owners of licensable HMOs who notify them of their intention to take particular steps to ensure that their HMOs no longer require a licence. A temporary exemption notice lasts for 3 months but is renewable for another 3 months in exceptional circumstances. Where the exemption is not granted, the LHA must notify the applicant of their decision, the reasons for it, the right of appeal and the period for appealing.

Clause 52: Applications for licences

149.     Clause 52 provides that an application for a licence must be made to an LHA in accordance with its requirements that may include the payment of such a fee as it might determine. The appropriate national authority may prescribe by regulations various matters concerning applications, including the contents and form of application forms, the manner in which applications are made and the maximum fees that an LHA can charge. Subject to the regulations, an LHA can take account of all its costs of running the licensing scheme when setting the licence fee.

Clause 53: Grant or refusal of licence

150.     Clause 53 provides that an LHA may grant a licence to an applicant or some other agreed person, or may refuse to grant a licence. A licence can be granted if (a) the house is reasonably suitable for occupation by the number of persons or households specified in the application or decided upon by the LHA, or can be rendered suitable for that number by imposition of conditions in the licence; (b) the proposed licence holder is a fit and proper person (and the most appropriate person to be granted a licence); (c) the proposed manager of the HMO is the person having control of the house or an agent or employee of that person and is also a fit and proper person; and (d) the proposed management arrangements are satisfactory.

Clause 54: Tests as to suitability for multiple occupation

151.     Clause 54 sets out what needs to be considered for a house to be suitable for occupation by a particular maximum number of households or persons. Regulations may prescribe minimum standards such as to number, type and quality of toilets, washing facilities and food preparation facilities and certain other standards of facilities or equipment to be provided. The LHA may require higher standards than those prescribed when determining whether the HMO is reasonably suitable.

Clause 55: Tests for fitness etc. and satisfactory management arrangements

152.     Clause 55 sets out the evidence that must be considered (amongst other matters) when addressing the question of whether a person is, or is not, fit and proper to be a licence holder or a manager. These include whether that person (or a relevant associate) has been engaged in offences of fraud, dishonesty, violence, drugs or unlawful discrimination in business or contravention of housing law or breach of any applicable code of practice approved under clause 171. However, a person is not required to disclose a spent conviction. The clause also sets out the matters to be addressed when considering whether or not the management arrangements for a HMO are satisfactory (in terms of the competence of the manager, management structure and funding).

Clause 56: Licence conditions

153.     Clause 56 provides that an LHA may include conditions in licences it grants. Such conditions could include restrictions or prohibitions on the use of parts of the house by occupants, or requirements to take steps to deal with behaviour of the occupants or visitors, or to make facilities available in good working order to meet prescribed standards under clause 54, or to carry out necessary works within specified periods. Schedule 4 conditions are mandatory in all licences. An LHA is required, as a general rule, to address health and safety issues through its Part 1 functions and not by means of licence conditions. But it may impose conditions which relate to the installation or maintenance of facilities or equipment.

Clause 57: Licences: general requirements and duration

154.     Clause 57 provides that a licence must not relate to more than one HMO, and is valid for a period that is specified in the licence (not more than five years) although it may be brought to an end earlier if there is non-compliance with a provision of the licence. A licence is non-transferable and upon the death of a licence holder, a 3-month temporary exemption would automatically be granted in line with the provisions of clause 51(2). The exemption can be renewed for another three months.

Clause 58: Variation of licences

155.     Clause 58 provides for an LHA to vary a licence with the agreement of the licence holder or without agreement if it appears that circumstances have changed. The change in circumstances may, in particular, relate either to the number of persons (or households) that can be permitted to occupy the house or the standards required for a particular number of occupants. A variation made with the agreement of the licence holder takes effect immediately; otherwise the variation does not come into effect until the time for making an appeal has expired, or any appeal against it is disposed of or withdrawn.

Clause 59: Revocation of licences

156.     Clause 59 provides for the circumstances in which an LHA may revoke a licence. These include: with the agreement of the licence holder; where the LHA no longer believes that the licence holder is a fit and proper person; or where, in terms of the number of occupants or other standards currently applying, the house would not currently have been licensable. There is a power for the appropriate national authority to make regulations setting out other circumstances in which a licence may be revoked. Other than where revocation has been agreed to by the licence holder, it does not take effect until the time for making an appeal has expired, or any appeal is finally disposed of or withdrawn.

Clause 60: Procedural requirements and appeals against licence decisions

157.     Clause 60 gives effect to the procedural requirements and appeals procedure set out in Schedule 5.

Clause 61: Offences in relation to licensing of HMOs

158.     Clause 61 makes it an offence punishable by a fine of up to £20,000 if a person controlling or managing a HMO does not have the required licence. However, no offence is committed by a person who has an outstanding application either for a licence or for a temporary exemption. An offence is also committed by permitting the HMO to be occupied by more persons than are permitted to occupy it under the licence. This is punishable with a fine of up to £20,000. It also an offence to breach any condition of a licence, punishable by a fine not exceeding level 5 (currently £5,000). It is a defence to proceedings for any of the three offences if the person accused can show that he had a reasonable excuse.

Clause 62: Further sanctions relating to unlicensed HMOs

159.     Clause 62 provides that during any period when a person is guilty of the offence of having control of managing a HMO which is not licensed, but ought to be licensed, no rent is payable by occupiers and no charge can be made in lieu of rent. An occupier's security of tenure is not affected by this provision and nothing in it affects the terms of occupancy (other than payment of rent).

Clause 63: Transitional arrangements relating to introduction and termination of licensing

160.     Clause 63 contains provisions for transitional arrangements dealing with when a HMO becomes licensed for the first time if more persons occupy the property at that time than is permitted under the licence. It is a defence to the offence under clause 61(3) that the licence holder is taking reasonable steps to reduce the number of residents so as to comply with the licence. The clause also provides that an order made under clause 204 (transitional provisions etc.) may make provision in relation to HMOs which are registered under Part 11 of the Housing Act 1985 immediately before a requirement to obtain a licence applies.

Clause 64: Meaning of "HMO"

161.     Clause 64 provides that a "HMO" means a house in multiple occupation as defined in clauses 191 -195 and includes any yard, garden, outhouses and appurtenances linked to it.

PART 3 - SELECTIVE LICENSING OF OTHER RESIDENTIAL ACCOMODATION

Clause 66: Licensing of houses to which this Part applies

162.     Clause 66 provides that any residential building within a designated area must have a licence if it is occupied by tenants or licensees. (See clause 72 that excepts properties licensed under Part 2). It does not apply to tenancies or licences granted by registered social landlords or such other tenancies or licences as the appropriate national authority may prescribe.

Clause 67: Designation of selective licensing areas

163.     Clause 67 provides that an LHA may designate an area as subject to selective licensing

164.     In addition, regulations made by the appropriate national authority can specify other criteria for imposing a licensing requirement. The LHA must consult before making a designation under this clause.

Clause 68: Designations under clause 67: further considerations

165.     Clause 68 sets out further requirements that the LHA must consider in exercising the power to make designations under clause 67. These are as follows: (a) ensuring the exercise of power is in accordance with the LHA's overall housing strategy; (b) adopting a co-ordinated approach when dealing with wider issues; (c) considering whether there are other courses of action that could be used to deal with the problems identified and (d) considering whether the designation will significantly help to deal with the problems.

Clause 69: Designation needs confirmation or general approval to be effective

166.     Clause 69 provides proposals for designation under clause 67 by an LHA to be confirmed by the appropriate national authority. The LHA may confirm, or refuse to confirm a designation. On confirmation the LHA will determine a date when the designation comes into force, to be no earlier than 3 months after the date of confirmation. The clause also provides that the LHA may give general approval to any description of designation. Where a general approval is given, the designation comes into force no earlier than three months after it is made.

Clause 70: Notification requirements relating to designations

167.     Clause 70 requires that when a designation is made or confirmed, a notice should be published giving prescribed information about the designation, and (if applicable) its confirmation. The LHA must make copies of the information and other prescribed information available to the public.

Clause 71: Duration, review and revocation of designations

168.     Clause 71 requires a designation to last no longer than 5 years. An LHA must review a designation from time to time and revoke it if they consider it appropriate to do so. When a designation is revoked, the LHA must publish a notice of revocation.

Clause 72: Requirement for Part 3 houses to be licensed

169.     Clause 72 provides that all occupied houses to which the Part applies in a designated area must be licensed except if the property is licensed under Part 2, a temporary exemption notice is in force or the property is subject to a management order under Part 4.

Clause 73: Temporary exemption from licensing requirements

170.     Clause 73 provides that the LHA may issue a notice granting temporary exemption from licensing for a house which would otherwise be required to be licensed under clause 72. The temporary exemption notice will last no longer than 3 months but is renewable for another 3 months in exceptional circumstances. Where the exemption is not granted, the LHA must notify the applicant of their decision, the reasons for it, the right of appeal and the period for appealing.

Clause 74: Applications for licences

171.     Clause 74 provides that an application for a licence must be made to an LHA in accordance with its requirements that may include payments of a fee as it might determine. The appropriate national authority may prescribe by regulations various matters concerning applications, including the contents and form of application forms, the manner in which applications are made and the maximum fees that an LHA can charge. Subject to the regulations, an LHA can take account of all its costs of running the licensing scheme when setting the licence fee.

Clause 75: Grant or refusal of licence

172.     Clause 75 provides for an LHA to grant or refuse to grant a licence. The LHA may grant a licence to the applicant or some other agreed person if they are satisfied that: the proposed licence holder is a fit and proper person (and is the most appropriate person to be the licence holder); the proposed manager is also a fit and proper person to be the manager of the house and is also the person having control of the house or an agent or employee of that person; and the proposed management arrangements for the house are satisfactory.

Clause 76: Tests for fitness etc. and satisfactory management arrangements

173.     Clause 76 sets out the evidence that must be taken into account (amongst other matters) by an LHA in reaching a decision as to whether an applicant for a licence and the proposed manager is a fit and proper person. These include whether that person (or a relevant associate) has been engaged in offences of fraud, dishonesty, violence, drugs, or unlawful discrimination in business or contravention of housing law. However, a person is not required to disclose a spent conviction. Clause 76 also sets out the matters to be addressed when considering whether or not the management arrangements for the house are satisfactory (including the competence of the manager, management structure and funding arrangements).

Clause 77: Licence conditions

174.     Clause 77 provides that an LHA may include conditions in licences it grants. Such conditions could include restrictions or prohibitions on the use of parts of the house by occupants, requirements to take steps to deal with the behaviour of the occupants, or to make facilities available in good working order to meet prescribed standards, or to carry out necessary works within specified periods. Schedule 4 conditions are mandatory in all licences. An LHA is required, as a general rule, to address health and safety issues through its Part 1 functions and not by means of licence conditions, but may impose conditions which relate to the installation or maintenance of facilities or equipment.

Clause 78: Licences: general requirements and duration

175.     Clause 78 provides that a licence must not relate to more than one house, is not transferable and is valid for a period specified in it, up to a maximum of five years. In the event of the death of the licence holder whilst the licence is in force, the licence ceases and a three-month temporary exemption is then automatically granted. This can be renewed for another three months.

Clause 79: Variation of licences

176.     Clause 79 provides for an LHA to vary a licence with the agreement of the licence holder or without agreement if it appears that there is a change of circumstances such as discovery of new information since the licence was granted. A variation made with the agreement of the licence holder takes effect immediately, otherwise the variation does not come into effect until the time for making an appeal has expired, or any appeal against it is disposed of or withdrawn.

Clause 80: Revocation of licences

177.     Clause 80 provides for the circumstances in which an LHA may revoke a licence. These include: (a) with the agreement of the licence holder; (b) where there has been a breach of licence conditions; (c) where the licence holder or the manager is no longer fit and proper; (d) where the house ceases to be a Part 3 house; (e) where a HMO licence has been granted in respect of the house or (f) where the house would not currently have been licensable. Revocation by agreement takes effect immediately; otherwise it does not take effect until the time for making an appeal has expired, or any appeal is finally disposed of or withdrawn.

Clause 81: Procedural requirements and appeals against licence decisions

178.     Clause 81 provides that Schedule 5 has effect in relation to procedural matters and licensing appeals under this Part.

Clause 82: Offences in relation to licensing of houses under this Part

179.     Clause 82 provides that an offence is committed if a person has control of or manages a property required to be licensed under this Part which is not licensed. There is a maximum fine of £20,000. No offence is committed by a person who has an outstanding application either for a licence or for a temporary exemption. It is also an offence to breach a condition of a licence. There is a fine not exceeding a level 5 fine for this offence (currently £5,000). It is a defence to proceedings for either of these offences if the person accused can show that he had a reasonable excuse

Clause 83: Further sanctions relating to unlicensed Part 3 houses

180.     Clause 83 provides that during any period when a person is guilty of the offence of having control or managing house that should be licensed but is not, then no rent is payable by the by occupiers and a charge can not be made in lieu of rent. An occupier's security of tenure is not affected by this provision and nothing in it affects the terms of occupancy (other than payment of rent).

Clause 84: Meaning of "house"etc

181.     Clause 84 contains the definition of "dwelling" and "house". "House" includes any yard, garden outhouse or appurtenance linked to a house.

PART 4 - ADDITIONAL CONTROL PROVISIONS IN RELATION TO RESIDENTIAL ACCOMMODATION

Clause 86: Interim and final management orders: introductory

182.     Clause 86 explains what IMO and FMOs are and their purpose.

Clause 87: Making of interim management orders

183.     Clause 87 sets out the circumstances in which an IMO must be made. These are: (a) when a HMO or a house subject to Part 3 ("the house") ought to be licensed, but is not and there is no reasonable prospect of the house becoming licensed in the near future, or the health and safety condition is met or, (b) the house is licensed, but the LHA intends to revoke the licence and on revocation there will be no reasonable prospect of it becoming licensed in the near future or the health and safety condition will be met. The clause also provides that the LHA may also apply to a county court for authority to make an order in respect of a house that is a HMO that is not required to be licensed or a house which is neither a HMO nor required to be licensed under Part 3. In relation to HMOs the court must have regard to the level of compliance with the Approved Code of Practice (see clause 171) in deciding whether to grant the LHA and can only do so if it satisfied the health and safety condition is met; and in respect of any other house clause 88 sets out the conditions the court must have regard to. Any order made under the provisions in the clause may exclude any part of the house occupied by a person who is the owner or long leaseholder of the whole of the house. The clauses also provides that two or more IMOs cannot be made in succession.

Clause 88: Special interim management orders

184.     Clause 88 sets out the circumstances in which an IMO can be made under clause 87. An IMO may be authorised by a county court in respect of a house which, had a licensing scheme been made under Part 3, it would have been subject to it and the conditions for making the order apply. The appropriate national authority may prescribe the circumstances in which this power may be used, but these must relate to combating anti-social behaviour or other prescribed circumstances in which a Part 3 licensing regime may be set up.

Clause 89: The health and safety condition

185.     Clause 89 defines the "health and safety condition" for the purposes of clause 87. The condition is that it is necessary to make the IMO to protect the health, safety or welfare of the occupiers of the house or persons occupying or owning property in its vicinity. The clause provides that a threat of eviction to avoid licensing requirements under Part 2 may be a ground for making the order. It also explains that the condition is not met where the LHA is under a duty to take action under Part 1 to remedy a category 1 hazard and the LHA is satisfied that by doing so the occupiers' health, safety and welfare will be protected.

Clause 90: Operation of interim management orders

186.     Clause 90 sets out when an IMO comes into effect or ends. When the IMO is made in respect of a licensed house where the LHA intends to revoke the licence, the order comes into effect at the same time as the revocation. In other circumstances the order comes into effect when it is made. The IMO can be made for a maximum period of twelve months or such shorter period as is specified. An IMO will continue in force beyond twelve months where the LHA has decided to make an FMO and an appeal has been made against that decision, but where the IMO is made in respect of a HMO which is not subject to licensing, it is only with the leave of the court that the order may be extended.

Clause 91: Local housing authority's duties once interim management order in force

187.     Clause 91 sets out the LHA's obligations after making the IMO. It must take immediate steps to protect the health and safety and welfare of those occupying the premises or living nearby. It must also take steps as soon as practicable to put in place long-term management arrangements, and ensure the house is properly managed while those arrangements are determined. Where the house is licensable the LHA must grant a licence or make an FMO. Where the house is not subject to licensing, the LHA must consider whether, at the end of the order, it ought to make an FMO or take no further action.

Clause 92: General effect of interim management orders

188.     Clause 92 provides that the LHA are to take over many of the rights and obligations of the landlord in respect of the house. It has a power to manage the property, and to authorise a manager to do so on its behalf whilst the IMO is in force, together with power to permit others to take up occupation of the premises (but only with the written consent of the legal owner). The LHA does not acquire the legal estate and the house is not treated as LHA accommodation for the purposes of any other statutory provision (so occupiers do not acquire the status of secure tenants of the LHA). Occupiers of the premises retain the same rights that they had before the IMO was made (see clause 106). The IMO is a local land charge.

Clause 93: General effect of interim management orders: immediate landlords, mortgagees etc

189.     Clause 93 provides for the immediate landlord to be no longer able to exercise any of the rights taken over by the LHA as set out in clause 92. Clause 93 provides that the immediate landlord is not entitled to receive any rent or other charges, to grant tenancies or otherwise manage the property whilst the IMO is in force. The clause, however, provides that any rights of a person to sell the house are not affected by the IMO. The making of an IMO has no effect on any mortgage of the house or the rights of the mortgagee or any superior leaseholder. The immediate landlord is defined as the person who would be entitled to receive the rent from the occupiers of the house if the IMO had not been made.