Notes / Housing / Houses in Multiple Occupation / 15 Licensing of houses in multiple occupation

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15 Licensing of houses in multiple occupation

Every house in multiple occupation (HMO) that is not exempted must be licensed. A licence for an HMO authorises its holder and any agent named on the licence to allow the HMO to be occupied in accordance with the licence conditions (Housing (Scotland) Act 2006, s.124).

An application for an HMO licence may be made only by an owner of the living accommodation concerned (s.129). The local authority may either grant the HMO licence (with or without conditions), or refuse it. Applications must be in writing. Detailed provisions as to notices, representations and hearings are set out in the Act (Sch. 4). The authority must decide whether to grant or refuse an application within 12 months of its receipt, but may apply to the sheriff for an extension to this period. If a decision is not made within the requisite period, the licence is granted unconditionally (Sch. 4, para 9).

A local authority has a discretionary power to refuse to consider an application for an HMO licence if it considers that occupation of the accommodation as an HMO would be a breach of planning control. If the applicant subsequently obtains planning permission or a certificate of lawful use or development and makes a further application for a licence within 28 days, no fee may be charged in relation to that application. If an application is refused before an existing licence for the HMO has expired, the existing licence will expire either on its normal expiry date or on a later date that the local authority considers reasonable, given the circumstances (s.129A).

An authority must refuse an application if the applicant or their agent is disqualified by court order from holding an HMO licence, or if it considers either of them not to be a fit and proper person. The factors to which the local authority must have regard in determining whether the applicant and agent are “fit and proper” are as in the Antisocial Behaviour etc (Scotland) Act 2004, s.85 and include whether the person has committed certain types of offence (involving fraud or dishonesty, violence or drugs), practised unlawful discrimination, or contravened the Letting Code or housing or landlord and tenant law; and their actions or failures to act in relation to anti-social behaviour affecting a house let by them or for which they were an agent. Where an applicant or agent is not an individual, these tests apply to any director, partner or other person involved in the management of the company, trust or organisation (s.130).

An authority may only grant a licence if the accommodation is suitable for use as an HMO or could be made so by including conditions in the licence (s.131). In deciding this, the authority must consider–

(a) its location;

(b) its condition;

(c) any amenities it contains;

(d) the type and number of persons likely to occupy it;

(da) whether any rooms within it have been subdivided;

(db) whether any rooms within it have been adapted

resulting in an alteration to the situation of the water and drainage pipes within it;

(e) the safety and security of persons likely to occupy it; and

(f) the possibility of undue public nuisance.

A local authority has a discretionary power to refuse to grant an HMO license if it considers that there is, or that the grant of the licence could result in, an overprovision of HMOs in the locality. In considering whether to refuse to grant a licence on this ground, the authority must have regard to whether there is an existing HMO licence in effect in respect of the living accommodation, the views of the applicant and any occupants, and any other matters specified by the Scottish Ministers by order. In considering whether there is overprovision, the authority must have regard to the number and capacity of licensed HMOs and the need for HMO accommodation in the locality and any other matters specified by the Scottish Ministers (s.131A).

An authority cannot consider an application from the same applicant for the same accommodation, or for any accommodation if refusal was on the grounds of his not being a fit and proper person, within a year of the refusal of an application. This restriction does not apply if the authority is satisfied that there has been a material change of circumstances e.g., if a physical feature which made the property unsuitable for licensing has been altered (s.132).

A local authority may include in an HMO licence any conditions that it considers appropriate. The Scottish Ministers may also specify in regulations conditions which must be included (s.133).

An HMO licence generally lasts for three years, although a shorter period of not less than six months can be specified. Where a licence is granted by default because the local authority did not come to a decision within the required period, it will last for one year (s.134).

Where a licensed HMO property is sold, any existing HMO licence transfers to the new owner of and lasts for one month from the date of purchase, provided that the new owner is already entered on the local authority’s register of landlords. If the new owner submits a licence application before the end of that month, the licence will continue in force until that application is determined. If the new owner is not a registered landlord, the licence is not transferred and expires on the date that ownership transfers (s.136). The licence of a deceased sole licence-holder transfers to their executor and expires three months after the date of death, unless the authority is satisfied that it is reasonable to extend it in order to wind up the holder’s estate (s.137).

A local authority may revoke an HMO licence at any time if (s.139)–

(a) the licence holder or agent is no longer a “fit and proper” person (see above);

(b) the accommodation is no longer suitable for use as an HMO and cannot be made suitable; or

(c) a condition of the licence has been breached.

A licence holder can cancel a licence at any time by returning it to the local authority (s.141).

The owner of an unlicensed HMO that requires to be licensed may apply to the local authority for the grant of a temporary exemption in order to give him time to stop the premises being used as an HMO. The owner must explain the steps to be taken to stop the premises from being so used, and the local authority must be satisfied that those steps will be successful. The HMO will not need a licence during the term of the exemption, which will be three months (subject to extension in exceptional circumstances) (s.142).

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