Increased HMO licence fees for non-compliant properties

Rhys Owen, Senior Property Advisor at CPS Homes in Cardiff, South WalesCardiff Council have announced that, as of 1st September 2021, the HMO licensing fee landlords traditionally paid as one lump sum will now be payable in two parts, as endorsed by the Supreme Court in R (Hemming, t/a Simply Pleasure Ltd) v Westminster CC [2015].

In the landmark case, the court ruled that licensing fees must be charged in two stages; an application fee to cover only the costs of obtaining authorisation under the scheme, and a licence fee levied only on successful applicants to cover the remaining costs of administration and enforcement etc.

As such, Cardiff Council now require an initial application fee of £160, payable with the application. A further payment is required after the Council have visited and deemed if the property is compliant with the required standards or not. A non-compliant property will command a higher fee, and the bigger the property, the higher the fee.

The Council say: “The effect of this is that landlords who comply will benefit from proportionately lower fees, while the higher fees will help the local authority resource the enforcement of standards within non-compliant properties.”

Because of the significant cost difference, we sought clarification on the benchmark for compliance and non-compliance and, pleasingly, have been advised that the Council will not take into account minor maintenance issues, particularly where resolved quickly by the landlord. The Council have also acknowledged that laying down guidance on what is “minor” isn’t easy and will involve the inspecting officer’s judgement, though they will do their best to benchmark between officers through internal team meetings.

The amended fee structure is outlined in the table below. You will note that there is one exception where a licence is effectively being “transferred” from one owner to a new owner for the remaining term of the licence, where that property is fully compliant with licensing standards.

Cardiff HMO Fees table

Applications for new licences and renewal of licences will now be made on one form, with an option to skip several sections of the form on renewal. The form is also now available as a fillable PDF file, which is a welcome change.

Please note that, at the time of writing, the Cathays additional licensing scheme is effectively “on hold”. The five-year period of the scheme expired on 1st January 2021. The Council must consult stakeholders before declaring any further scheme and aim to carry out that consultation later this year. In the meantime, all licences issued under the scheme remain valid until the five-year period specified on the individual licence expires. So, by way of an example, a licensed issued under the Cathays scheme in 2020 will continue in force until 2025 and will not require renewal until that date, even if the Cathays scheme is re-declared.

The Plasnewydd (Roath) Additional Licensing Scheme went live for a second time on 1st January 2021 for five years and all HMOs within that district must be licensed.

Mandatory licensing of larger HMOs continues to apply across the City to HMOs having a minimum of 3 storeys and 5 or more occupiers.

21 September 2021


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