Student landlords need to note a new counting rule for the number of floors in a house of multiple occupation (HMO), following a recent High Court ruling which has changed the way that floors are counted for mandatory HMO licensing. And this ruling affects current as well as new HMO properties, particularly those are a part of a building with ground floor commercial premises.

In a recent court case, London Borough of Islington v The Unite Group Plc [2013] EWHC 508 (Admin), the judges were asked to consider the method for floor counting for mandatory HMO licensing.

A building owned by The Unite Group which housed student tenants was higher than three floors, including the ground floor commercial premises, but Islington Council insisted it needed mandatory HMO licensing. An HMO or part of an HMO needs mandatory licensing if it comprises three or more floors and it comprises of five or more tenants forming two or more households.

The recent High Court case decided that for a building which had a commercial use basement and/pr ground-floor and with flats on the above floors, the property owner- landlord should count the number of floors in the HMO, and not the building of which it is a part.

David Smith, a lawyer at Nearly Legal who reported on the ruling says that when counting storeys in a building for HMO purposes it is not necessary to consider other residential storeys unless they are actually part of the HMO being considered. It is however necessary to consider business premises.”

He added: “The case should make it simpler to calculate whether an HMO falls into the mandatory licensing category and should release many landlords from the requirement to license self-contained single storey flats that sit in a block.”

This decision reverses R v Roderick John Williams from 2008. Mr. Williams was fined for renting out an unlicensed HMO. His flat was above a basement flat and had two floors. The court decided as the building was comprised of three storeys, Mr Williams flat should have had a HMO licence.