England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
HA/5/2015/2015 & HA/17/2015

		Royal Courts of Justice Strand, London, WC2A 2LL
		29/03/2017

Lord Justice Lewison:

1. The issue raised on this appeal is the extent of the power to impose conditions in licences of houses in multiple occupation ("HMOs"). The Upper Tribunal (Martin Rodger QC, Deputy President) upheld the imposition of a condition requiring an attic bedroom to be occupied by a full-time student. Nottingham City Council says that such a condition is unlawful.
2. HMOs must now be licensed under the Housing Act 2004: section 61. An HMO is defined by section 254. The essence of the definition, for present purposes, is that an HMO consists of one or more units of accommodation which are not self-contained and are occupied as their only or main residence by persons who do not form part of a single household. A person is treated as occupying part of a building as their only or main residence if it is occupied by the person:

"as the person's residence for the purpose of undertaking a full-time course of further or higher education." (section 259 (2) (a))

3. However, where the accommodation is managed by the educational establishment itself it does not count as an HMO: Sched 14 para 4. An application for a licence must be made to the local housing authority: section 63 (1). Before granting a licence the authority must be satisfied that the house is reasonably suitable for occupation by a specified number of persons or that it can be made so suitable by the imposition of conditions: section 64 (3)(a). In some cases standards are prescribed by regulations, and failure to comply with those standards means that the authority cannot grant a licence: section 65. These prescribed standards do not apply in our case. The power to impose conditions is contained in section 67 which provides so far as material:

"(1) A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following—

(a) the management, use and occupation of the house concerned …

(2) Those conditions may, in particular, include (so far as appropriate in the circumstances)—

(a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it; …

(5) A licence may not include conditions imposing restrictions or obligations on a particular person other than the licence holder unless that person has consented to the imposition of the restrictions or obligations.

(6) A licence may not include conditions requiring (or intended to secure) any alteration in the terms of any tenancy or licence under which any person occupies the house."

4. If an authority grants a licence subject to conditions, there is a right of appeal to the FTT. The appeal is by way of rehearing, and the FTT may confirm, reverse or vary the decision of the authority. It can also direct the authority to grant a licence on such terms as the FTT may direct: Sched 5 para 34.
5. I can take the facts from the very clear decision of the UT. The appeal concerns two HMOs in Nottingham: 44 Rothesay Avenue and 50 Bute Avenue. Each is a terraced house of traditional brick construction with a slate roof. Each is used for letting to students. In each case the attics have been converted into bedrooms.
6. The Council is the licensing authority for HMOs in Nottingham. There are no prescribed sizes for bedrooms in HMOs. But the Council considers that 8m² is the minimum acceptable size for a bedroom in an HMO, and in carrying out its measurements it disregards all space with a floor to ceiling height of less than 1.53m. Each of the attic bedrooms has a sloping ceiling which reduces the area regarded by the Council as useable living space below 8m². At 44 Rothesay Avenue the attic room has a total floor area of 9.75m² but, due to the sloping ceiling, only 5.89m² has a floor to ceiling height of 1.53m or more. The room at 50 Bute Avenue has a floor area of approximately 11m² of which 6.89m² has a ceiling height of greater than 1.53m. The UT quoted the description of one of the bedrooms:

"The area of the relevant bedroom having a height of less than 1.53m was utilised to accommodate a desk and for storage. The relevant room includes a double bed, desk, chest of drawers, bedside table, bookshelves and a built-in wardrobe. The pitch of the roof slope was such that it appeared possible to use the desk without undue risk of collision and any such risk could be reduced further by placing a chair in the area beneath the pitched roof window thereby eliminating the risk of collision when rising from the chair. The head of the bed was fitted under that part of the room with reduced height. A risk of collision could be avoided by turning the bed through 180º. The risk of collision when changing the bed linen could be avoided by pulling the bed out of the area with reduced headroom prior to performing that task."

7. In each case the Council granted a new HMO licence which imposed a condition prohibiting the use of the attic bedroom for sleeping. Paragraph 36 of the licence for 44 Rothesay Avenue, provided:

"That the second floor front bedroom be prohibited for the use of sleeping. This room will not be allowed for the use for sleeping until it has provided by way of alteration, adaptation or extension a useable floor surface area of 8m² within a minimum ceiling height of 1.53m below the sloping ceiling from the floor."

8. The licence for 50 Bute Avenue limited the number of persons permitted to occupy the HMO to a maximum of 5 and provided, by paragraph 38, that:

"The second floor front bedroom is not to be used as a sleeping room except where it is let in combination with another room within the property in such a way as to provide the occupant with the exclusive use of two rooms."

9. The restriction in paragraph 38 was supplemented by further conditions which contemplated that the restriction on sleeping in the room might be removed if alterations were carried out to increase the size of the room to 8m² (excluding any area where the ceiling height is below 1.53m).
10. The Respondents appealed to the FTT against the imposition of those conditions. The FTT allowed both appeals and deleted the relevant conditions. In essence the FTT found that in each house there was sufficient shared space (kitchen/diner and sitting room) to counter-balance the small size of the attic bedrooms; and that the occupiers, who would all be students, would live "cohesively"; that is to say that they would share the shared space.
11. Accordingly, in the licence for 44 Rothesay Avenue the FTT substituted an alternative condition of its own, namely that:

"The second floor front bedroom may only be used for sleeping accommodation by a person engaged in full-time education and who resides in the dwelling for a maximum period of 10 calendar months over a period of one year."

12. No such condition was explicitly imposed in the licence for 50 Bute Avenue although in paragraph [58] of its decision the FTT justified its conclusion by saying that "there are sufficient compensating features in the property to make it suitable for students or similar cohesive occupation for six persons in six households." However, in dismissing the Council's appeal against the decisions of the FTT the UT directed the inclusion of that condition in the licence for 50 Bute Avenue.
13. The principal question, therefore, is whether that condition is lawful.
14. The Council's argument can, I think, be summarised as follows:

i) What is relevant for the purposes of the licensing regime is the physical characteristics of the property in question: not the personal characteristics of the potential occupiers. The condition is therefore outside the ambit of the power to impose conditions. The condition has the effect of allowing students to live in sub-standard accommodation and is therefore contrary to the policy of the Act.

ii) The condition will not achieve its intended purpose and is incapable of effective policing. It is therefore irrational.

15. Until the passing of the Housing Act 2004 local housing authorities had a patchwork of powers to deal with unsatisfactory conditions in HMOs. These were in essence reactive powers dependent on a complaint by an occupier. The introduction of a compulsory licensing scheme, which had been advocated by housing charities and others for many years, established a more proactive regime. HMOs are typically occupied by those who cannot afford better accommodation, such as students, people on low incomes or foreign nationals. These classes of persons are or may be vulnerable, and the imposition of standards on HMOs is intended to protect their housing conditions and hence their health and welfare.
16. As Mr Arden QC on behalf of the Council points out, what is licenced under the regime is a "house"; and it is licensed by reference to a permitted maximum number of occupiers. That permitted maximum is not, in itself, limited to any particular type of occupier. Mr Arden also correctly points out that the information required to support an application for a licence does not include any requirement to provide information about the type of prospective occupier of the HMO in question.
17. The Council's skeleton argument acknowledges that "superficially" the reference in section 67 to "management, use and occupation" and "conditions imposing restrictions or prohibitions on the use or occupation … by persons" might be thought to permit reference to the personal characteristics of an occupier. However, Mr Arden argues that in context they are not capable of doing so. How property is used in quite different from who uses it. Students use property in exactly the same way as anybody else. Once licenced an HMO may be occupied by anyone. However, in my judgment, the final step in this part of the argument begs the very question that must be resolved. An HMO, once licenced, may be occupied by anyone only if it is impossible to impose conditions restricting the class of persons who may occupy it. Mr Arden says, nevertheless, that the power to impose conditions enables the Council only to regulate how property may be used. It does not give it a power to regulate who may live in it. That is why the conditions imposed by the FTT are outside the powers contained in the Act.
18. There is no doubt, in my judgment, that the general characteristics of occupiers are relevant in some contexts connected both with HMOs and with housing standards generally. Thus one of the standard conditions which must be imposed in a licence is a requirement that the manager of the HMO must demand references from persons who wish to occupy the house: Sched. 4 para 2. Necessarily a reference is likely to comment on the personal characteristics of an occupier. In some cases it will be relevant to investigate not only the personal characteristics of occupiers, but also what they do. For example in deciding whether a house is occupied by a single household or more than one household, persons carrying out domestic services are regarded as occupying the same household as their employer if they are occupying rent free tied accommodation in the same building: The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 reg. 3. It must, therefore, be relevant in some cases to investigate whether someone is actually carrying out domestic services. Likewise, a full-time student is regarded as occupying accommodation as his only or main residence if it is occupied for the purpose of his full time course. So it must in some cases be relevant to investigate what kind of course a student is pursuing. Some religious communities are outside the HMO scheme, but only if their "principal occupation" is prayer, contemplation, education or the relief of suffering: Housing Act 2004 Sched. 14 para. 5. It may therefore be relevant to investigate what is the principal occupation of a religious community.
19. The final part of this argument is that the grant of the licence permitting the attic bedrooms to be used as sleeping accommodation by students will result in students living in sub-standard accommodation. Small cramped rooms with low ceiling heights are not healthy to live in. In its skeleton argument the Council also criticised the UT for referring to guidance on the previous regime for the regulation of HMOs published by the Institution of Environmental Health Officers. This guidance, which dated from 1994, discussed amenity standards for HMOs. It divided HMOs into a number of categories, one of which was "Category B houses" described thus:

"Houses occupied on a shared basis. These would normally be occupied by members of a defined social group, eg. students or a group of young single adults. The occupiers each enjoy exclusive use of a bedroom but would share other facilities including a communal living space."

20. In the case of such houses the Institute recommended that where a separate living room was provided the minimum acceptable size for a bedroom was 6.5m². What the UT said about that at [25] was:

"It is quite a different thing to take into account the subjective views of individuals, and to have regard to the suitability of an HMO for occupation by a particular category of occupier. The categorisation of HMOs before the 2004 Act clearly recognised that, and the same awareness is apparent in guidance published with the current regime in mind. Obviously none of that guidance can change the meaning of the legislation, but it provides a useful point of reference."

21. Since the UT said in terms that the guidance could not change the meaning of the legislation I cannot see that there was any legal error in referring to it, and the submission in this form was not pressed in oral argument. However, what Mr Arden did argue was that the availability of communal living areas could not compensate for the inadequacy of the private space provided by an undersized bedroom. I did not understand him to say that it was legally incapable of doing so. If that was the submission, there was nothing in the Act or the Regulations made under it to which he referred that would support such a submission. Indeed he himself accepted that it was open to a licensing authority to authorise a relaxation of standards in a particular case by reference to a particular letting to particular individuals. If the submission was (as I understood it to be) that in practical terms the availability of communal living space could not compensate for an undersized bedroom, then the Institution of Environmental Health Officers' guidance contradicts that submission.
22. Mr Arden went on to argue that if (as he said the FTT had found) the attic bedrooms are unhealthy for living in all year round, they are unhealthy to live in for 10 months in the year. However, each FTT (and the UT) was satisfied that if inhabited by a student able to share communal living space within the HMO, the accommodation would not be sub-standard. Since there are no prescribed standards for the size of bedrooms, that is a value judgment that the FTT was entitled to make and does not disclose any error of law.
23. There is, in my judgment, nothing intrinsically inimical to the regime governing HMOs in investigating the general characteristics and activities of an occupier. Since the words of section 67 (2) (a) on their face include the power to impose conditions restricting the "use or occupation [of the HMO] by persons occupying it" and there is no context which would exclude a description of the class of persons entitled to occupy specified parts of the HMO, I would reject the Council's argument under this head. A restriction of occupation to "occupation by students" is in my judgment a restriction on "occupation by persons".
24. Additionally the Council's skeleton argument said that the condition is unlawful because it is imposed on the occupier of the attic room without his consent, contrary to section 67 (5). I do not accept this argument which was not pressed in oral submission. The condition is imposed on the manager of the HMO and it will be up to him to ensure that it is complied with. The mechanism for doing that will be through the medium of the lettings policy and the letting agreement that the manager uses. The occupier will not be bound by the condition, but by the terms of that agreement.
25. The second main part of the argument is that the condition imposed by the FTT and the UT does not achieve its aim of securing "cohesive living" and is incapable of effective enforcement. Since a large part of the thinking of the FTT was that the house was suitable for student accommodation because of its expectation that there would be what it called "cohesive living" the single condition imposed is irrational in the sense that it is not calculated to achieve its underlying objective. Indeed, so it is argued, the very notion that students participate in "cohesive living" is a populist view of the way in which students live their lives, unsupported by evidence. People do not live as a class: they live as individuals. The FTT in each case recognised that an individual occupier might not wish to participate in "cohesive living" in which event the attic bedrooms might not be appropriate. But the solution proposed by the FTT in the Rothesay Avenue case at [28], namely the imposition of another condition limiting occupation to "students or similar", is impractical. In the first place the notion of "cohesive living" is too vague to ensure a sharing of communal facilities. Second, even if parts of the house are required to be used for "cohesive living" there is no guarantee that an individual occupier will wish to participate in it. Third, there is no condition that in fact requires any part of the HMO to be available for communal living. The single condition imposed does not, for example, expressly require the sitting room to be kept available for shared use. Fourth, the condition does not require the remaining bedrooms to be let to students. Thus while the attic bedroom might be let to a student the remaining bedrooms could be let to an entirely disparate group of other people, with whom the student in the attic might not be able to live cohesively.
26. The condition is also said to be incapable of enforcement. It does not state whether the period of occupation must be continuous or may be met by a student who occupies all year but goes elsewhere at weekends. Nor is it clear whether the period of occupation must coincide with the time in full time education. In effect therefore the condition imposed by the FTT limited occupation not merely to students, but to a sub-set of students. It would be impractical for the Council to monitor whether any particular occupier met the criteria required by the condition.
27. The first of these criticisms is, in my opinion, unfair. The FTT was not attempting to define "cohesive living"; nor did it include that expression in any condition intended to have binding legal effect. In fact the phrase appears to have been taken from a publication by DASH (Decent and Safe Homes). DASH was a consultative group of local authorities in the Midlands, including the Council itself, which provided guidance on minimum requirements for HMOs under the new regime. That guidance applied to HMOs in various different categories one of which was:

"HMOs where occupants live as a cohesive group."

28. There was nothing that suggested that this description of one particular category of HMOs was unworkable in practice. The second criticism is also misplaced. The regime for the regulation of HMOs is designed to ensure that adequate facilities are available for occupiers of HMOs. It is not designed to compel them to use them. Every HMO must, for example, provide a suitably equipped kitchen, with facilities for the preparation and cooking of food; and refrigerators and freezers. But there is nothing to stop an occupier from living only on pre-cooked takeaway meals bought daily, or from eating out.
29. There is some substance in the third and fourth points, but they can be met by the imposition of suitable conditions. This has been the position of the respondents throughout this case (and as I have said was floated by the FTT in the Rothesay Avenue case). The Council, however, has studiously avoided in engaging with this latter suggestion, preferring to take its stand on the point of principle. When the court put to Mr Fookes, appearing on behalf of the respondents, the suggestion that the licence should be varied to include conditions:

i) Requiring a sitting room and kitchen/diner to be kept available for communal use, and

ii) Prohibiting any bedrooms to be let to persons other than students engaged in full-time education,

he readily agreed.

30. As far as policing the condition is concerned, I cannot see that it is any more difficult than policing adherence to conditions which prevent a building from being an HMO in the first place (e.g. the provision of domestic services, or the activities of a monastery), or, indeed investigating whether someone is occupying a putative HMO as their main residence. If the condition is not enforced by the manager of the house, then that is likely to lead to a revocation of the licence, which is sanction enough.
31. Subject to the amendment of the licence in the way that Mr Fookes accepted, I would dismiss the appeal.

Lord Justice Briggs:

32. I agree

Lord Justice Longmore:

33. I also agree.