The last two years have seen significant changes in the law relating to Houses in Multiple Occupation.  These changes were brought in by the Housing Act 2004, which provided for mandatory licensing of a property which is three or more storeys high, where five or more people live who are in two or more separate households.  

Prior to the Housing Act coming in to force, many local councils had their own policy of licensing which continued under the transitional provisions provided for in the Act.  Those transitional schemes will end in 2009 and, as a result, many councils are now applying for permission, additionally to license those properties which do not fall into the mandatory licensing regime.  In addition, certain councils, for example, Salford and Nottingham have applied for Secretary of State’s permission to license all rented properties.

More recently, local councils in Harrow, Camden and Wales have been given authority to begin the licensing of buildings converted into flats where the conversion works do not comply with the 1991 Building Regulations and where less than two thirds of the flats are let on long leases.  This is likely to have an impact on the relationship between freeholders and their long lessees.  

In the past, many freeholders have taken a laid back approach to the subletting of flats but that must now change because it is the freeholder who is ultimately responsible for applying for the License and should therefore be more proactive in obtaining information from lessees as any subletting could alter the status of the building.  Freeholders can face a significant fine if they fail to obtain a licence which they may seek to pass on to their lessees.  

Freeholders and lessees who own, or are about to purchase a flat in such a block would be wise to obtain information as to whether it may require a licence to avoid a hefty fine.  

For further information, please contact the Property Dispute Resolution Team at Seddons on 020 7725 8000