Property licensing experts Landlord Licensing & Defense are raising concerns over a concerning enforcement strategy being used by some local authorities, where small mistakes on application forms are causing landlords to pay huge fines.
According to the firm, a growing number of councils – most recently a Midlands authority – are fining landlords thousands of pounds for making the wrong choices on House in Multiple Occupation (HMO) license applications. In one high-profile case, a landlord was fined more than £5,000 after the council refunded his license fees on the grounds that he had applied for the “wrong type” of HMO licence.
Landlord Licensing and Defense highlights that other councils are also rejecting applications where landlords inadvertently use the “additional” licensing form rather than the “mandatory”, or vice versa, despite both forms including the same licensing conditions.
By refusing the application and refunding the fee – often without notifying the landlord – the council removes the statutory protection given under the Housing Act 2004 for “duly made applications”. Once this protection expires, landlords face immediate civil penalties for operating an unlicensed HMO, leaving them with potentially serious financial consequences.
Experts warn landlords to exercise extreme caution and seek professional guidance when submitting HMO license applications to avoid falling victim to this growing enforcement loophole.
Phil Turtle, compliance director at Landlord Licensing and Defence, said: “Whilst we achieved a reduction in this case, the council refused to admit that they had caused this situation.
“They have no right by law to refuse an HMO license application simply because it was the ‘wrong type’ of HMO application, but they are unregulated, irresponsible and clearly landlord haters.
“This is the classic equivalent of British Rail blaming the ‘wrong kind of snow’ on the line!”
He added: “Sadly, the landlord was unwilling to take this to the first-tier tribunal as public broadcasting would have caused serious reputational damage to his business, which would have had a much bigger impact than a fine.
“Effectively, a landlord was intimidated into admitting the council’s unlawful action as his own crime!”
Under the Housing Act 2004, there is no legal justification for a local authority to refuse or return an HMO license application that has otherwise been duly made simply because the landlord did not understand the difference between two similar schemes or ticked the wrong box.
“This is clearly morally repugnant,” Mr Turtle said. “Most council licenses are exactly the same and rarely state whether they are mandatory or additional on the final document.
“By acting in this way, it will not surprise anyone that councils are acting illegally and unethically.
“They are using pure bureaucracy as a weapon to generate enforcement revenue rather than improving housing standards.”