The following information details the law and how it has been interpreted. Owners and tenants should find these notes useful but they do not constitute legal advice.
Local Authorities are required to hold the owner rather than the occupiers responsible for Council Tax on Houses In Multiple Occupation (HMO). This is usually the person who has the freehold interest in the whole dwelling.
A house in multiple occupation is any type of dwelling which:
- was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household; or
- is occupied by one or more people, each of whom:
- is a tenant or licensee of part only of the house, flat etc. (e.g. renting a room only) or
- has a licence to occupy the dwelling as a whole but who does not pay rent or licence fee for the whole dwelling.
In general, the Landlord/owner will be personally liable and billed for the Council Tax on HMOs.
Definition differences
The definition of a HMO mentioned here is for Council Tax purposes only. It differs from that contained in the Housing Act 2004 relating to the need to obtain a HMO licence in certain cases.
What is a single household?
There is no legal definition of what constitutes a single household, it can depend on the makeup of the household at that time. For instance, no-one would argue that a family consisting of parents and children was anything other than a single household. However, many households contain individuals who are not related to each other but still regard themselves as a single unit. The following considerations should prove useful guidance.
Considerations:
- The size of the household;
- the size of the dwelling;
- the type and extent of any communal living;
- use for temporary periods only;
- use of shared facilities;
- did the occupiers come to the property as a group or separately?
- do different occupiers come and go?
- Mode of living – who does the shopping, cleaning, cooking?
- Are external locks fitted to the bedroom doors, kitchen units?
- How are gas, electricity, water and telephone bills resolved?
These factors amongst others can be used in deciding if a property is a HMO.
Where a tenant has a tenancy agreement for one room in a property, but shares the facilities, even if there are no locks on the doors, or other tenants in the property does not mean the property is not a HMO.
Is the dwelling let in parts?
The first thing to establish is whether the accommodation is classed as self-contained, e.g. one of a number of flats within a house, or whether the property is valued as one single dwelling, i.e. is there one or more Council Tax assessment?
If individual rooms are let to specified individuals with separate ‘tenancies’ rather than the whole accommodation being let to a group of ‘joint tenants’, the dwelling will be classed as a HMO.
If the dwelling is classed as a HMO, the owner, rather than the occupiers, will be liable for payment of the Council Tax.
There is a vital difference between these two types of landlord and tenancy agreement. In the first case an individual is held liable for rent in respect of a specific room. However, in the second case each of a group of joint tenants can have an agreement to rent the whole property. If you are in doubt you should check the wording of your tenancy agreement and ask your landlord for further information. You may wish to seek legal advice or check with the Citizen’s Advice Bureau. A legal tenancy agreement is a binding contract.
The following High Court and Tribunal cases indicate how the law is interpreted:
- Hayes v Humberside Valuation Tribunal & City Council 1997
This landmark Appeal Court case judged the owner liable where a dwelling is suitable for occupation by persons who do not constitute a single household. - UHU Property Trust Ltd v Lincoln City Council 2000
Landlords cannot avoid personal liability by getting tenants to sign impractical agreements. The High Court Judge decided that such agreements are irrelevant if what happens in practice differs from the ‘terms’ and there is no reasonable likelihood of them being fulfilled. - Annette v Royal Borough of Kingston-upon-Thames 1994
Not withstanding the wording of individual agreements to the contrary, the Tribunal found that the tenants each paid rent for a room only (with shared facilities) – the owner’s joint tenancy claim was not supported by Housing Benefit records which indicated that separate room rents were paid. Locks were fitted on the tenants’ bedroom doors. - Sumal v Coventry City Council 1995
The Tribunal found that locks on bedroom doors and evidence from tenants regarding receipts/payments for identified rooms (plus shared facilities) were sufficient to dismiss the property owner’s appeal. The Tribunal also decided that evidence of the tenants’ sharing household bills was irrelevant. - Neville v City of Bradford Metropolitan Council 1995
The owner argued that all his tenants shared all the accommodation in what the council had designated a HMO. The presence of lockable bedroom doors and the use of addresses such as ‘bedsit’ and ‘flat’ indicated separate tenancies and lifestyles consistent with a IHMO type property, irrespective of some versions of some of the tenancy agreements. - Price v Waverley Borough Council 1995
The Tribunal ruled that ‘adaptation’ can mean as little as ‘modifying to suit new conditions, without making radical transformation’. As a consequence externally lockable bedroom doors were sufficient evidence to class a dwelling as a HMO.
These cases illustrate a HMO is likely to be where:
- separate and different rents for particular rooms are charged;
- rent is paid by each tenant direct to the landlord and separately receipted;
- room rent is determined by the landlord;
- different rooms are let at different rents (depending on size, aspect, etc.);
- bedrooms have externally lockable doors;
- separate lifestyles are pursued;
- service supply bills are in the name of the owner;
- room usage may have altered from the original or normal intention;
- tenancies commence at different times.
Last Updated on Wednesday, May 8, 2024