Houses in multiple occupation (HMO): consultation on adding new categories to the definition of an HMO

Part One: Concerns regarding the safety of contract and transient workers accommodation when staying away from home

Background

The Scottish HMO Network Group, brings together officials from all 32 local authorities. The Group approached the Scottish Government asking for the current definition of 'only or main residence' within HMO licensing to be clarified in order to capture contract and transient workers.

It was highlighted that these workers are often found staying in a range of accommodation such as B&Bs and holiday lets. The group consider that these circumstances are equivalent to houses being used as HMOs and therefore they should be licensed in a similar way to ensure the safety of the occupants.

As holiday lets and B&B accommodation are not subject to the same safety and management standards as HMOs, local authorities highlighted clear health and safety concerns where multiple people are living within shared accommodation.

The HMO Network Group highlighted particular issues in relation to section 125(1)(a) of the Housing (Scotland) Act 2006 and, in particular, part 4(a) which states that "a person is to be treated as occupying living accommodation only if it is that persons only or main residence".

Where local authorities highlight that workers are living in a way that would mean the property should be subject to HMO licensing, they often find that many employers and/or accommodation owners challenge this by claiming that the accommodation is not the workers' 'only or main residence' in order to avoid the additional costs of HMO licensing.

The policy intention of the changes that are proposed in this consultation paper focus on ensuring that contract and transient workers – who often have no choice where they stay when working away from home – are afforded the same health and safety rights as those who live in a shared rented property as their only or main residence.

An example of such a situation is where major infrastructure works take place in a locality – such as the recent Aberdeen City Bypass or Queensferry Crossing – resulting in an influx of hundreds of construction workers to an area, many of whom are working away from home and require living accommodation.

Some workers will stay in the locality of the works on a working week basis, returning to their own homes at the weekend. Others will stay in the locality of the works for weeks or months at a time, only returning to their main residence when their contracts come to an end.

Local authorities report that many workers (or their employers) will rent holiday accommodation on a long term basis, or come to an agreement with an owner, ensuing that multiple workers have access to living accommodation in the locality of the works. In many instances they have access to special rates and arrangements are made so that workers can use facilities such as kitchens, or other arrangements for cooking, that would not be provided for tourists.

Question 1: Should holiday lets, hostels or B&Bs be licensed as HMOs, when contract and transient workers are residing in them and special arrangements have been made for the workers? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

Proposals for a new test for defining HMO accommodation

Under the Housing (Scotland) Act 2006 ("the 2006 Act"), a house has to be the only or main residence of occupants for HMO licensing to apply when the appropriate occupancy level has been reached. A house that would otherwise be a licensable HMO is not one if a sufficient number of residents have a main residence elsewhere. This includes people based outside Scotland who are working here for an extended period.

Section 125(1)(a) of the Housing (Scotland) Act 2006 states that "HMO means any living accommodation occupied by 3 or more persons who are not all members of the same family or of one or other of two families, which is occupied by those three or more persons as their only or main residence".

The local authority concerns are that some employers and accommodation owners are purposefully avoiding HMO licensing because they claim the occupants are living in the premises for only a short time and have a principal residence elsewhere. Section 125(1)(b) of the 2006 Act provides the power for Scottish Ministers to add, by order, new categories to the definition of houses in multiple occupation. Any additional descriptions of living accommodation made under the power in paragraph (b) would not include the requirement under section 125(1)(a), to be occupied as an only or main residence.

The policy aim of the proposal is to allow local authorities to consider the manner in which a property is being used without taking into account whether or not the occupant has a main residence elsewhere.

To do this, the Order would describe particular types of properties and how those properties are being occupied, without needing to take into account the only or main residence test. This would address the concerns that contract or transient workers are living in a range of differing accommodation which may be substandard, overcrowded and unsafe, or where unscrupulous landlords may be frequently moving workers - particularly vulnerable migrant workers - between different premises, describing each as a 'short term let'.

Furthermore, it would address situations where accommodation owners are actively marketing their properties to contract workers, on a long term basis that is different to normal tourist use, but are avoiding the need to obtain an HMO license by claiming it is not the workers' only or main residence.

Question 2: Do you agree with the policy approach to change the focus from the only or main residence test to instead focus on the type of accommodation and its manner of occupation for contract and transient workers? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

The Houses in Multiple Occupation (Scotland) (Order) 2019

A draft Houses in Multiple Occupation (Scotland) Order 2019 can be found within Annex A of this consultation. The following section provides further detail on the policy intention behind each article within the draft Order and seeks your views.

Types of accommodation to be added to the definition of an HMO

Article 2(1) of the draft Order sets out the types of living accommodation that are to be included within the definition of an HMO. They are:

a. bed and breakfast accommodation, occupied in the manner set out in paragraph (2)(a) of the draft order;

b. hotel accommodation, occupied in the manner set out in paragraph (2)(b) of the draft order;

c. a backpackers' hostel, occupied in the manner set out in paragraph (2)(c) of the draft order;

d. living accommodation in the same premises where the worker is employed;

e. a flat or house;

f. a serviced apartment;

g. self-catering accommodation also used for tourism lets;

h. lodgings consisting of a rented room or rooms in another person's house;

i. a non-traditional or temporary structure designed or adapted for living accommodation, which is not:

• a caravan (as defined by section 29 of the Caravan Sites and Control of Development Act 1960); or
• a tent, van, shed or similar structure, used for human habitation.

Where any of these types of accommodation is occupied by 3 or more unrelated workers - in a manner that is set out in article (2) of the draft order - then the owner or landlord would be required to apply to their local authority for an HMO license.

Whilst a wide range of accommodation types is set out in the draft Order, the policy intention is that such properties would only fall within the scope of HMO licensing when 3 or more a specific type of occupant (i.e. a contract or transient worker) is residing in the property in a particular way.

This enables Ministers to extend the benefits of HMO licensing – which can set out requirements for physical conditions, safety and tenancy management – to types of multi-occupancy property that fall outside the current definition of a licensable HMO, but which are being used in a way that raises health and safety concerns.

An example of this could be where a B&B owner has agreed with 3 contract workers that they can access the kitchen facilities in order to make their own breakfast. This is due to the workers being required to leave earlier than when breakfast is normally offered to tourists. Furthermore, the workers are able to make their own evening meal in the accommodations kitchen. This is a manner of occupation that differs from the normal services offered to a person using the premises on a tourism basis.

Question 3: Do you agree with the types of living accommodation set out in article 2(1) of the draft Order? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

Manners of occupation to be added to the definition of an HMO

Article 2(2) of the draft Order sets out the manners in which workers are occupying the property types set out in article 2(1). They are, where workers are:

a. living in bed and breakfast accommodation where the property owner has made a physical and/or operational change to the premises or the nature of the business to accommodate workers in a manner which differs from the use of the premises by tourists;

b. living in hotel accommodation where the property owner has made a physical and/or operational change to the premises or the nature of the business to accommodate workers in a manner which differs from the use of the premises by tourists;

c. living in a backpackers' hostel where the property owner has made a physical and/or operational change to the premises or the nature of the business to accommodate workers in a manner which differs from the use of the premises by tourists;

d. living in any type of accommodation mentioned in article 2(1)(d) to (i) while engaged in seasonal or agricultural work;

e. living in any type of accommodation mentioned in article 2(1)(d) to (i) either:

• before being transported offshore for employment; or
• after being transported back from offshore;

f. living in any type of accommodation mentioned in article 2(1) with other persons who occupy the living accommodation as an only or main residence where the number of workers and other persons together amounts to the 3 or more persons mentioned in section 125(1) of the 2006 Act.

As with article 2(1), the policy intention is to define that the way a property is being used by workers is central to determining whether it will come within the scope of HMO licensing.

For example, should 3 or more unrelated workers be residing in B&B accommodation but using it in the same manner as a tourist would – then HMO licensing would not apply. However, where the B&B bedrooms that those 3 workers are staying in, have been altered to provide them with cooking facilities, then HMO licensing would apply.

Similarly, should a person renting a holiday let contract with a company allowing them to use the holiday accommodation to house 3 or more unrelated staff, as they travel to and from offshore oil rigs, then an HMO license would be required. This would also apply if a group of workers approached a holiday let owner directly to rent their property for such purposes.

Question 4: Do you agree with the policy approach outlined in article 2(2) of the draft Order? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

Question 5: Do you agree with the manners of occupation set out in article 2(2) of the draft Order? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

Question 6: Are there other manners of occupation that should be described in the Order? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments:

Introducing a time pattern for manners of occupation

Article 2(3) of the draft Order introduces a time pattern for the manners of occupation. This sets out:

• occupation takes place for only part of a week; or
• that the three or more persons occupy the same living accommodation for a minimum period of one day in a 12 month period.

The policy intention behind the introduction of a time pattern for the manners of occupation is to reflect the transient nature of the workers. We know that numbers of workers living within the property types defined in the order will vary and will depend on a range of factors such as the length of their contract. This may result in a property owner accommodating 5 workers one week but the next week having none; or 4 workers living in a property for 4 days a week and then returning home.

This variation in occupant levels is not considered to be a valid reason for HMO licensing not to apply.

Question 7: Do you agree with the time pattern approach outlined in article 2(3) of the draft Order, whereby there does not have to permanently be 3 or more persons living in the accommodation? Please choose from the following options:

Yes / No / Unsure

Please explain your answer below:

Comments: