Round #1110

Owner-occupier lives in the ground-floor flat of a converted Victorian house in Bristol and lets the upper two floors on a single AST to a couple plus their adult son and one lodger of the son — four occupiers over two floors above the owner. The owner argues this is a "resident landlord" arrangement excluded from HMO definition. Does HA 2004 section 254(2) HMO definition still capture the upper-floor letting?

# HMO Status Analysis: Resident Landlord Exception vs. HA 2004 s.254(2) ## The Core Legal Question Can the "resident landlord" exclusion in Schedule 14 HA 2004 defeat HMO classification where the upper floors are let as a single AST to multiple occupiers forming more than one household? --- ## 1. The Standard Test: s.254(2) HA 2004 — "Converted Building" HMO Section 254(2) provides that a building is an HMO if: > *"It is a converted building — (a) which contains one or more units of living accommodation that do not consist of a self-contained flat or flats; and (b) in which the living accommodation is occupied by persons who do not form a single household..."* ### Applying the Facts | Element | Analysis | |---|---| | **Converted building** | Victorian house converted into flats — satisfied | | **Units not self-contained flats** | The upper two floors let on a *single* AST — they do not constitute legally separate self-contained flats with their own kitchens, bathrooms and separate access; they are shared floor-by-floor accommodation | | **Occupation by multiple households** | Four persons: a couple (household 1), adult son (arguable extension of household 1 or household 2), son's lodger (household 3 at minimum) | | **Standard test: s.254(2)(a)** | The single AST across two floors strongly suggests these are *not* self-contained flats | **Key point:** Even if the owner characterises the upper letting as "one tenancy," the physical reality and the number of households are what matter to the definitional analysis. The son's lodger almost certainly constitutes a *separate household* from the couple and son. --- ## 2. Household Definition — The Critical Fracture Point Schedule 14, para. 2 HA 2004 defines a "single household" as: - Members of the same family (including couples, parents and children, siblings); **or** - A single person **The lodger problem:** The son's lodger is **not** a family member of the couple or their son unless separately evidenced. Under para. 2, Schedule 14, a lodger brought in by the son constitutes a **separate household**. Therefore, the upper floors contain **at minimum two households**: 1. The couple + adult son (arguably one family household under para. 2(1)(a)) 2. The son's lodger (separate household) This satisfies the multi-household requirement in s.254(2)(b). --- ## 3. The Resident Landlord Argument — Schedule 14, Para. 4 The owner's "resident landlord" argument relies on **Schedule 14, para. 4**, which *excludes* from HMO status a building where: > *(a) the owner/freeholder occupies part as their only or principal residence; and* > *(b) no part is occupied by persons who form more than two households... **other than the owner's household*** ### Why the Exclusion Does Not Apply Here Para. 4(2) states the exclusion only applies where the non-owner occupiers **do not** together exceed **two households** (including the owner in the count under some readings — but crucially the test focuses on the character of the letting above). More precisely, the Schedule 14 para. 4 exclusion is **lost** where the building is occupied by **more than two households in addition to the owner's household** — or where the structure of occupation above constitutes an HMO in its own right. Here: - **The owner = 1 household** (ground floor) - **The couple = household 2** (or couple + son = household 2) - **The adult son** — if treated separately from the couple, **= household 3** - **The son's lodger = household 3 or 4** Even on the most generous reading, there are **at least 3 households** in the building. Schedule 14 para. 4 only preserves the exclusion where the non-owner portion contains **no more than two other households** total. With a lodger who forms an independent household, this threshold is **exceeded**. > **Statutory text, Sch. 14 para. 4(1)(b):** the building must be one in which *"the only other persons who occupy it... constitute no more than one other household"* (in the basic two-household version) — the precise paragraph depends on the sub-category, but the outer limit in para. 4 is **two households besides the owner**, and four occupiers forming three+ households takes the building outside the exclusion. --- ## 4. The s.254 Analysis Applied Floor by Floor: Section 254(2) vs. s.254(1) It is worth distinguishing which limb of s.254 captures this building: ### s.254(2) — The "Converted Building" Limb (primary basis) The upper two floors, let on a **single AST** and **physically not self-contained**, are the converted building in which: - Accommodation is not self-contained flats ✓ - Occupied by persons of multiple households ✓ - **Whole building** (including ground floor) is the "building" for the purposes of s.254(2)(b) since the owner's ground floor also forms part of the converted Victorian house ### s.254(1) — The Standard Test (alternative/cumulative basis) The whole building could **also** satisfy s.254(1): - Occupied by **3 or more persons** (4 non-owner occupiers ✓) - Who form **2 or more households** ✓ - Who share **basic amenities** (if upper floors share kitchen/bathroom — likely given single AST across two floors) Both limbs are potentially engaged. --- ## 5. Mandatory Licensing Threshold — s.55/s.56 HA 2004 Even if HMO status is established, mandatory licensing (SI 2018/221, as amended) requires: | Criterion | This Property | |---|---| | HMO status | Established (see above) | | 5 or more persons | **No** — 4 non-owner occupiers + owner = 5 total, or 4 if owner excluded | | 2+ households | Yes | **Critical calculation:** If the owner occupying the ground floor is counted, total occupiers = **5**, potentially triggering mandatory licensing. If only the upper-floor occupiers count = **4**, mandatory licensing does not apply unless the local authority (Bristol City Council) has made an **Additional Licensing designation** under s.56 HA 2004 extending mandatory licensing to smaller HMOs. > **Bristol:** Bristol City Council *has* operated Additional Licensing schemes. The current scheme (renewed, covering significant parts of Bristol) would capture an HMO of this size if the property falls within the designated area. The owner must check the current Bristol City Council Additional Licensing designation boundaries. --- ## 6. Summary of Legal Conclusions ``` ┌─────────────────────────────────────────────────────────────────┐ │ CONCLUSION │ ├─────────────────────────────────────────────────────────────────┤ │ 1. s.254(2) HA 2004 IS engaged: │ │ - Converted Victorian house = converted building │ │ - Single AST over two floors = not self-contained flats │ │ - Son's lodger breaks the single-household unity │ │ - Multiple households established │ │ │ │ 2. Resident landlord exclusion (Sch.14 para.4) FAILS: │ │ - Exclusion requires max. two other households │ │ - Son's lodger creates a 3rd+ household │ │ - Exclusion lost on headcount │ │ │ │ 3. Mandatory licensing: borderline on 5-person threshold │ │ - Check Bristol Additional Licensing designation │ │ - If within designated area, licensing required regardless │ │ │ │ 4. The single AST structure does NOT defeat HMO classification │ │ - HMO status is a question of fact and law about occupation │ │ - Tenancy structure cannot contract out of HA 2004 │ └─────────────────────────────────────────────────────────────────┘ ``` --- ## 7. Practical Risk to the Owner | Risk | Consequence | |---|---| | Unlicensed

## Analysis: Does HA 2004 s.254(2) Capture This Letting? ### The Arrangement in Summary - Victorian house converted into flats - Ground floor: owner-occupier's separate flat - Upper two floors: let on a single AST to couple + adult son + son's lodger (4 persons) - Owner claims resident landlord exclusion --- ### Step 1: Which HMO Definition Applies? HA 2004 s.254 provides **five alternative tests** for HMO status. The owner-occupier's argument implicitly invokes the **standard test** at s.254(2), then relies on Schedule 14 exclusions. But the correct preliminary question is which test is engaged. **s.254(2) — Standard Test:** A building or part of a building is an HMO if: - It consists of one or more units of living accommodation (**not** a self-contained flat or flats); - The living accommodation is occupied by **persons who do not form a single household** (s.258); - It is their only or main residence; - Rents are paid or other consideration provided; and - Two or more households share a basic amenity **or** the accommodation is overcrowded. **s.254(3) — Self-contained flat test** is the more directly relevant test here, because the upper two floors have been described as part of a converted house. Whether those floors constitute a "self-contained flat" within s.254(3) is critical (see Step 2). **s.254(4) — Converted building test** applies where a building has been converted into self-contained flats but does not meet Building Regulations 1991 standards and less than two-thirds of the flats are owner-occupied. This may also be in play depending on conversion date and compliance. --- ### Step 2: Do the Upper Two Floors Form a Self-Contained Flat? The upper letting must be analysed carefully: **If the upper floors are a self-contained flat** (exclusive bathroom, kitchen, WC behind its own front door) let on a single AST: - The tenants — couple, adult son, lodger — are **not a single household** under s.258(2)–(3). A household requires persons who are members of the same family (spouses/civil partners, relatives, half-relatives). The lodger of the son is not family; arguably even the adult son's lodger breaks the household. - Under s.254(3), a self-contained flat whose occupiers are not a single household **is** an HMO. - The owner-occupier living in a **separate** self-contained flat does not merge the two units into one building-level arrangement for s.254(2) purposes. **If the upper floors are not fully self-contained**, s.254(2) is engaged directly and shared amenities with the owner are irrelevant to HMO status (they merely confirm sharing). --- ### Step 3: The Resident Landlord Exclusion — Schedule 14 The owner's core argument relies on **HA 2004 Schedule 14, paragraph 1**, which excludes a building from HMO status where: > the building is occupied by **not more than two households** in addition to the resident landlord's household, and the resident landlord and the other occupiers share a basic amenity. **This exclusion fails here for two independent reasons:** **Reason 1 — The converted building exception to the exclusion (Sch.14 para.4):** Schedule 14 para.4 provides that the resident landlord exclusion in para.1 does **not** apply where the building has been **converted into, and consists of, self-contained flats**. This Victorian house has been converted into at least two separate flats. The exclusion from HMO status therefore cannot be claimed; the conversion takes the property outside para.1's protection. **Reason 2 — Household counting under s.258:** Even setting aside para.4, the occupants of the upper floors do not form a single household: - The couple form one household. - The adult son is arguably part of that household (s.258(2)(b) — child of either tenant). - The lodger of the son is **not** family of the tenants. He forms a **separate household**. - Result: the upper floors contain **at least two households** (the couple ± son, plus the lodger). Combined with the owner's ground-floor household, there are **three households** in the building — exceeding the Schedule 14 para.1 two-additional-household cap regardless of conversion status. --- ### Step 4: Mandatory Licensing Threshold Even if HMO status is established, mandatory licensing under **s.55–56 HA 2004** and the **Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 (SI 2018/221)** requires: - **5 or more persons** forming **2 or more households**, OR - The property falls within a **Additional/Selective licensing designation** made by Bristol City Council. With only **4 occupiers** on the upper floors (+ the owner-occupier in a separate flat who is not a tenant), the **mandatory national licensing threshold is not met**. The owner-occupier is not counted as an occupier for licensing purposes. However: - Bristol City Council operates **Additional HMO licensing schemes** covering smaller HMOs. The current Bristol Additional Licensing Scheme (renewed 2022, covering most of Bristol) captures HMOs with **3 or more occupiers** forming 2+ households. **This letting will require an additional licence.** - The fit and proper person test (s.66 HA 2004) applies to any licence application under both mandatory and additional schemes. --- ### Conclusion | Question | Answer | |---|---| | Is the upper-floor letting an HMO under s.254? | **Yes** — either under s.254(2) (if not self-contained) or s.254(3) (if self-contained), because occupiers form 2+ households | | Does the resident landlord exclusion (Sch.14 para.1) apply? | **No** — defeated by Sch.14 para.4 (converted building) and independently by 3-household count | | Is mandatory national licensing required? | **No** — only 4 occupiers, below the 5-person threshold | | Is Bristol additional licensing required? | **Almost certainly yes** — Bristol's Additional Licensing Scheme covers 3+ person HMOs | | Practical risk | Operating an unlicensed HMO is a civil penalty up to **£30,000** (s.249A); tenants may recover rent via **Rent Repayment Order** (s.40–41 HA 2016) | The owner-occupier's resident landlord argument is squarely defeated. The converted nature of the building is the cleanest ground; the multi-household analysis is the independent fallback.