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HMO ruling lets landlords reclaim licence fees

28 March 2014

HMO ruling lets landlords reclaim licence feesThousands of landlords could reclaim house in multiple occupation licence fees wrongly levied by councils following a landmark ruling in the High Court.

Since the Housing Act was introduced in 2006, councils have automatically demanded shared housing in a building over three floors or more needed a mandatory licence.

However, the latest case in the High Court turns this interpretation of the law on its head if the rented home only takes up two floors in a building with more storeys.

And as the ruling was made in the High Court, only an appeal to a higher court or a law change can overturn the verdict.

The decision allows landlords with rental homes that make up only one or two floors of a larger building to review whether they need a mandatory HMO licence.

If not, they can reclaim licence costs and interest from their local councils.

The ruling particularly affects flats over commercial premises or those in residential blocks.

In the case, Bristol City Council v Digs (Bristol) Ltd [2014] EWHC 869, the council complained a maisonette taking up two floors of a flour-storey building needed a mandatory HMO licence.

Lawyers for Digs successfully argued the property only took up two floors of the building and did not need an HMO licence as the mandatory definition did not cover the maisonette.

To support the argument, Digs explained tenants took a private staircase leading to the second storey maisonette from the ground floor. The staircase and landings took up a small part of two other storeys of the building.

At Bristol Magistrates Court in October 2013, District Judge Zara agreed with Digs, but the council appealed to the High Court.

Now, Justice Burnett has ruled the lower court decision was right and refused the appeal on the grounds the maisonette failed the statutory definition and the staircase and landings were part of the building, but not the rented maisonette.