HMO licensing on sale of landlord's interest
In Taylor v Mina An Ltd  UKUT 249 (LC), the Upper Tribunal (Lands Chamber) considered the licensing requirements for a house in multiple occupation (HMO) where the landlord had sold its interest.
Where a residential property is a house in multiple occupation (HMO), the person who has control of, or manages, the property must obtain a licence from the local housing authority (LHA) under the Housing Act 2004 (HA 2004). It is a criminal offence to not have an HMO licence if one is needed (section 72(1), HA 2004). A licence is personal and cannot be transferred on a sale of the property (sections 68(6), HA 2004).
In October 2016, P bought the landlord’s interest in an HMO from S. S had been granted a licence in 2016, which would expire in 2021. P did not apply to the LHA for a licence until May 2017, and the licence was granted in September 2018.
T, who had been a tenant of the property, applied to the First-tier Tribunal (FTT) for a rent repayment order (RRO), as P had committed an offence by not having a licence. The FTT dismissed T’s application, noting that the property was licensed as S’s licence had not expired. T appealed.
The Upper Tribunal (Lands Chamber) (UT) allowed the appeal. S had sold the property to P, and P required a licence. S’s licence could not be transferred to P. The fact that S’s licence had not been expressly revoked was of no assistance to P.
Practitioners acting for the purchaser of the reversion of an HMO must be alert to the need to apply promptly for a licence. Under section 68(2) of the HA 2004, a licence can be granted before it is required, to come into force at the point when it is required.
Source: Practical Law