Understanding the Difference Between Planning and Licensing for HMOs

When operating or developing Houses in Multiple Occupation (HMOs), it’s important to understand both the planning and licensing requirements that apply. While these can seem similar, there are key distinctions,  we recently had a potential client who did not appreciate the difference between planning and licensing.

Planning

A HMO is a property rented out by at least 3 people who are not from the same household (i.e. related family) but share basic amenities like bathrooms, toilets and kitchens.  There are 2 categories of HMO – Class C4: Small HMO – 3-6 residents and Large HMOs (Sui-Generis) – more than 6 residents.  We have several articles and guides on our website covering what a HMO is, see the related content section below.

  • There is a permitted change of use from C3 dwelling to a C4 small HMO.  However if there are restrictions on the property ie via a condition or an Article 4 Direction restricting this permission change.
  • Permission is often needed to convert a home into a large HMO or make physical changes to the property.
  • Policies around property thresholds, amenities and size restrictions fall under planning.
  • Applications are made to the local planning authority (the LPA).

Licensing

HMO licensing is a regulatory framework that applies to certain types of HMOs, which is governed by the Housing Act 2004.  The aim of HMO licensing is to ensure that shared houses meet minimum standards for amenities, safety precautions and management practices. This helps protect the health and well being of the tenants.

There are two main categories of HMO licensing:

Mandatory licensing – This applies to large HMOs occupied by 5 or more people, HMOs must be licensed by the local authority (the Council).

Additional licensing – Some local authorities have additional licensing schemes that apply the mandatory licensing criteria to smaller HMOs. This aims to address problems in the private rented sector.

There is another form of licensing, Selective which applies to all privately rented properties within an area designated by a local authority not just Houses in Multiple Occupation (HMOs).

To obtain an HMO license, the property must pass inspection against criteria like fire safety, basic maintenance, waste disposal, gas/electrical safety, space standards and management arrangements.

Licenses are granted for 5 years. HMOs do not operate lawfully without a license where one is required. And failure to license is a criminal offence that can incur unlimited fines.

In summary:

  • Licensing regulation focuses on the health, safety and management standards of HMOs.
  • It ensures proper facilities, fire precautions and that occupants will be treated suitable.
  • Licenses are required from the local housing authority for certain sized/types of HMOs.
  • This covers mandatory licensing schemes and additional licensing in designated areas.

IMPORTANT TO UNDERSTAND – A license can be issued without planning permission being granted, this does not mean planning permission is not required – they are 2 separate processes.

Things a landlord needs to know?

  • A HMO often requires planning permission due to its use class this is separate to any licensing assessment.
  • Once permission is granted, or if planning is not required, a licence may still be required dependent on thresholds, and vice versa.
  • All HMOs occupied by 5 or more people from more than one household need a mandatory licence, you need to check with your local authority for other licenses.

It’s vital to check both the planning and licensing position with the local authority to fully understand your obligations when operating a HMO.  Non-compliance can lead to enforcement action under either regime.

Here are some common pitfalls in HMO planning and licensing that you should be aware of:

  • Failing to apply for planning permission (when required) before operating an HMO is a breach of planning.
  • Not obtaining the confirmation that the use is lawful – Securing a certificate of lawful use rather than full permission can limit future flexibility and cause issues.
  • Exceeding maximum occupancy levels – Licenses and permissions usually specify a limit, going over could require further approval.
  • Non-compliance with amenity/safety standards – Meeting space, waste disposal and fire safety standards can effect securing further licenses.
  • Poor property management – Complaints from neighbours about noise, parking or rubbish can jeopardise a license renewal.
  • Late license applications or renewals – Councils can refuse licenses if these timeframes are missed.
  • Lack of property maintenance – Regulations require regular safety checks, repairs and refurbishments are carried out.
  • Selling or leasing an unlicensed HMO – New owners or tenants need to be aware of any planning or licensing issues.

Careful due diligence and ongoing compliance monitoring is required to avoid these common pitfalls with HMO planning and licensing. Early advice from a specialist is recommended.

Do not confuse planning and licensing, they are completely separate one can be approved without the other – but it doesn’t mean that the other is not needed.

Don’t be of the opinion that the Licensing Team and the Planning Team within a Council talk to one another and therefore if you have one you must be fine to proceed as you don’t need the other because one would department would not issue a license or permission without the other, right? – ABSOLUTELY INCORRECT – this is such a common mistake.

Related Content

More information for you is available in our series of eBooks and Practical Guides which cover everything from the very basics of town planning to application processes and what developers need to consider.  Our Practical Guide to Houses in Multiple Occupation (HMOs) covers all the town planning basics relating to HMOs.

You might also find the following articles helpful:

If you’re not sure if you need help from a Town Planner take a look at blog on When to Hire a Town Planner our download a Guide on How to Choose a Town Planner.

Understanding the Difference Between Planning and Licensing for HMOs