Out-Law News 1 min. read

Government's HMO changes are not unlawful, Court of Appeal ruled

It was not unlawful for the Government to introduce new laws that gave greater development rights for houses in multiple occupation (HMO) without consulting councils for a second time, the Court of Appeal has ruled.

In ruling that the Government's recent consultation was fair, the judge backed a High Court ruling in April, which rejected a judicial review challenge to the changes. The claim was brought by Milton Keynes and two other local authorities.

The Court found that a consultation of local authorities last year was held to be sufficient to enable housing Minister Grant Shapps to introduce new regulations that make it easier for landlords to rent their properties out to multiple tenants.

Milton Keynes Council had claimed that the consultation process ahead of the amendments was unfair. The Council argued that the Secretary of State should have engaged directly with local authorities during the 2010 consultation, because the changes were radical and impacted mostly on local planning authorities.

The changes make it harder for councils to prevent dwellings being changed to provide HMOs, in which more than one unrelated tenant can rent rooms. Some councils have argued that HMOs lead to additional traffic, crime and anti-social behaviour.

The Court of Appeal rejected the appeal and ruled that the fairness of the 2010 consultation had to be considered in the context of a very full earlier consultation that was conducted by the previous Government in 2009, during which councils were sufficiently consulted.

"In that consultation, over a longer period, the Council and all local planning authorities were given an opportunity to make representations on a series of options, which included Option 3 subsequently adopted by the Secretary of State in September 2010," the Court said. "The Secretary of State was minded to make the orders challenged notwithstanding the strong, articulated objections to them by local planning authorities, of which he was aware. The decision to make them was a political decision which the Secretary of State was entitled to make."

The Order granted a new permitted development right enabling a change of use as a single dwelling house to use as a small house in multiple occupation. This means that landlords can rent their properties out to multiple unrelated tenants without the need to apply for planning permission.

Although councils will still be able to remove the permitted development rights, the councils argued that the new regulations mean that councils would have to give landlords 12 months' notice of their decision to remove the rights, or pay compensation.

The amendments to the HMO legislation was brought in by the Town and Country Planning (General Permitted Development) (Amendment) (No 2) (England) Order 2010 and the Town and Country Planning (Compensation) (No 3) Regulations 2010.

Timothy Mould QC and Richard Moules were instructed by Milton Keynes Council and Tim Morshead QC acted for the Government.

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