What few people realise is that the rules contain another set of definitions of houses in multiple occupation that include pre-1991 conversions that have been let out by their owners. These can also be licensed if the local authority so desires.

The reason for this is to make the houses comply with the fire safety rules contained in the 1991 building regulations. The offending part of the Act is Section 257.
This says that any converted building that fails to comply with the 1991 Building Regulations, and where more than a third of the units are let out, will be classified as an HMO.

Crazy requirement

This is clearly quite crazy and difficult to police and enforce. Most self-contained flats were sold on leases created some time ago. For most of these older leases there was no requirement to inform the freeholder or their managing agent if the flat was let out to tenants. Modern leases made after the buy to let boom are more likely to have such a requirement.

This means that there is no way anyone could know if the property is occupied by the owner or let out, though in theory managing agents could check to see if the correspondence address of the owner is the same as the address of the flat, but how many will bother?
So, in the worst case, it could be that people could face fines when there only crime is to not know whether the occupiers of the various flats in the block are either tenants or owner occupiers.

Who is responsible? Managing agents or flat owners?

Right now, it's still not clear who will ultimately be responsible for the registration of the building as an HMO - the leaseholder, the freeholder or the managing agent.

Experts in this area that I have spoken to tend to think the responsible party would probably be deemed to be the managing agent.

If this does turn out to be the case - and we are still waiting for a test case - then managing agents are not exactly going to be jumping over each other to try to manage blocks of flats. It could turn out that they could be slapped with a big fine just for not knowing whether the leaseholders / flat owners had let their properties to tenants.
Indeed, the Association of Residential Managing Agents (ARMA) and the British Property Federation have said that it could be the case that lessees and freeholders in blocks could struggle to find managing agents.

With no managing agents, these conversions, often not well maintained at the best of times, could go into further disrepair.

Landlords who, say, have two flats in the same house that was converted before 1991 and who look after the management of their own blocks could also be caught out, if both properties are let out.

If the property was found to be licensable, then it would probably need emergency lighting, fire proof doors and bringing up to building regulation standards.

Local authorities may target conversions

There is a risk that local authorities may be more likely to chase up conversions than trying to start from scratch and find whole houses that may or may not require licensing.
Certainly, with the information the councils have, the conversions are likely to be the easier target.

According to Chris Town from the Residential Landlords' Association, 'Local officials would love a test case prosecution to scare unlicensed landlords to come out with their licence fee cheques.'

Many landlords are still unlicensed

And yet, despite the potential fines, massive numbers of landlords are just ignoring the new licensing system with most landlords associations saying that they think that only around a third of landlords who should have applied for licenses have done so, thus far.
It seems that the landlords are hoping that the legislation will just go away or be revised once the government realises how hard it is to enforce or when they come to terms with the shrinkage in the number of rented rooms available in HMOs as landlords take fright of the new rules and costs of implementation and sell up.

As with so much in the Housing Act, it all comes down to how it is going to be enforced - whether with a light hand or an iron fist.

David Lawrenson is Director of www.LettingFocus.com the private rented sector experts. Lawrenson is author of "Successful Property Letting - How to
Make Money in Buy to Let" - the UK's top selling property book and LettingFocus advises a range of organisations on their private rented sector
strategies and operations.