The National Landlords Association (NLA) has written to all local authorities in England after recent court judgements have clarified issues over the licensing of Houses in Multiple Occupation (HMOs) and how local licensing fees should be determined.
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The action was taken after the outcomes from three specific judgments* involving English local authorities. Importantly, the rulings mean that many landlords may have been wrongly charged licensing fees and could be entitled to refunds.
In the wake of the rulings the NLA is asking all local authorities in England to contact any affected landlords, informing them of their right to appropriate refunds and providing details of how they may make a claim.
Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said:
“The private-rented sector is a valuable and growing part of local housing provision and it is essential that landlords are able to work with their local authorities constructively to meet housing need. However, this has been made difficult by some councils’ obfuscations concerning licensing fees.
“In light of these recent rulings we have asked local authorities to come clean about the level of fees they have charged private-landlords, if they were entitled to make these charges, and when they will refund any money unjustly demanded.
“In writing to all local authorities in England we’re acknowledging the good working partnership many private landlords have with town halls, but making clear they should not be absorbing the costs of overcharging to support other council functions”.
A copy of the NLA’s letter to local authorities can be read on the NLA’s website: www.landlords.org.uk/node/8726.
*The three cases in question are:
Hemming v Westminster City Council: The case outlines the type of costs that councils can recover through locally set licence fees and the processes councils have in place to ensure fee setting is transparent and open to scrutiny. The key issue addressed was whether the fees set by Westminster City Council complied with the requirements of the European Services Directive 2009 and the interpretation of Article 13(2) of the Directive. The Services Directive also makes it clear that licence fees covered by the Directive can only be used to recover costs and should not be used to make a profit or deter service providers from entering a market.
Read decision here.
Crompton v Oxford City Council: The power to charge fees in respect of HMO licensing is found in s63 of the Housing Act 2004. Importantly, this power is granted in respect of licence applications only. Oxford City Council has sought to charge a fee for the variation of an HMO licence. The Residential Property Tribunal (RPT) ruled that the fee was unlawful and that it could not be charged.
Bristol City Council v Digs (Bristol) Ltd: The defendant was the private landlord of a maisonette in multiple occupation. The council brought a prosecution for failure to obtain an HMO licence and for breaches of the HMO regulations. A District Judge at Bristol Magistrates Court tried the preliminary issue of whether the maisonette was a licensable HMO. It extended over two storeys of a building with a further entrance corridor and hallway on a lower storey. The council included the lower storey in deciding that the HMO extended to three storeys. The Judge held that having regard to Article 3 of the HMO (Prescribed Description) (England) (Order) the maisonette was not an HMO. The council had been wrong to include the lower storey. In the light of that ruling, the council offered no evidence and the defendant was acquitted.
Read decision here.