A High Court ruling that changes the definition of a mandatory house in multiple occupation (HMO) has left the door open for landlords to tackle councils over repaying thousands of pounds in wrongly collected licence fees.
For years, councils have treated shared houses over three floors as HMOs requiring mandatory licencing under the Housing Act.
But a landmark case relating to a Bristol maisonette has excluded the property from the statutory definition of an HMO.
And because the ruling was made in the High Court, the case is binding on any lower court and stands until a higher court rules otherwise or the government changes the law.
This allows landlords with similar properties to go back to their local councils and ask for the return of licence fees with interest.
In the case, Bristol City Council v Digs (Bristol) the council argued the property needed an HMO licence as the maisonette took up two floors of a flour-storey building.
Digs argued the property was only over two floors, and as such was outside the definition of a mandatory HMO and did not need a licence.
Tenants accessed the maisonette from a private staircase leading to the second storey of the building from the ground floor. The staircase and landings took up a small part of two other storeys of the building.
District Judge Zara sitting in Bristol Magistrates Court in October 2013 ruled in favour of Digs, but the council appealed to the High Court.
There, Justice Burnett decided the lower court was correct and upheld the decision and refused the appeal.
He asked two questions:
- Did the property fall under the statutory definition?
- Was it right to exclude stairs and landings on other storeys when deciding if the property was an HMO requiring a mandatory licence?
In both cases, the judge felt the property fell outside of legal definition.