Nottingham City Council v Parr & Anor [2018] UKSC 51

Nottingham City Council challenged HMO licence conditions allowing undersized attic bedrooms to be occupied by full-time students living cohesively. The Supreme Court held that licensing conditions under the Housing Act 2004 may lawfully restrict occupation to a particular class of person, dismissing the appeal save for deleting an irrational ten-month occupancy limit.

Facts

Nottingham City Council, the licensing authority for houses in multiple occupation (HMOs) under Part 2 of the Housing Act 2004, granted HMO licences for two terraced student properties at 44 Rothesay Avenue and 50 Bute Avenue, both owned by Trevor Parr Associates Ltd. Each property had a converted attic bedroom with a sloping ceiling. Once Nottingham disregarded floor space with a ceiling height of less than 1.53 metres, the useable area of each attic room fell below the eight square metre minimum recommended in Nottingham’s HMO Amenity Guidance and the East Midlands DASH Guide.

Nottingham accordingly imposed licence conditions prohibiting use of the attic rooms for sleeping unless structurally enlarged. On appeal, the First-tier Tribunal substituted conditions permitting occupation of the attic bedroom by persons engaged in full-time education for a maximum of ten calendar months per year, finding sufficient compensating features (notably generous communal living space) to make the houses suitable for cohesive student occupation. The Upper Tribunal and Court of Appeal upheld this approach, the Court of Appeal adding conditions requiring the ground floor communal space be retained for that purpose and that no bedrooms be let other than to full-time students.

Issues

The Supreme Court considered two grounds:

Ground 1: Whether the power to impose conditions under sections 64 and 67 of the Housing Act 2004, in order to make an HMO suitable for a particular number of households or persons, may lawfully be used to limit the class of persons for whom the HMO is suitable.

Ground 2: Whether the conditions imposed by the Tribunals and Court of Appeal were irrational and unenforceable.

Arguments

Appellant (Nottingham)

Mr Andrew Arden QC argued that section 64(3)(a) is concerned only with numbers of occupants, and section 67(2)(a) does not permit conditions restricting who may occupy an HMO. The conditions effectively created an exception for students contrary to the legislative purpose, which had been (in part) to reverse Barnes v Sheffield City Council (1995) 27 HLR 719 and bring shared student houses within the regulatory regime. Permitting lower standards for particular categories was the antithesis of the statute’s purpose. The conditions were also said to be irrational and unenforceable, particularly the ten-month limit and the inability practically to evict non-students.

Intervener (Secretary of State)

Mr Jonathan Moffett QC accepted that section 67 could empower a class-based condition in an appropriate case, but submitted that such a condition could not justify licensing a greater number of occupants than would otherwise be permitted, and criticised any approach allowing different standards for different classes.

Advocate to the Court

Mr Martin Chamberlain QC submitted that the conditions regulated the “use” and “occupation” of the rooms within the natural meaning of section 67, did not introduce an exception, and did not lower applicable standards. The student proxy for cohesive living was sufficiently precise.

Judgment

Lord Lloyd-Jones, with whom Lady Hale, Lord Wilson, Lord Carnwath and Lady Black agreed, dismissed the appeal save for deleting the ten-month occupancy condition.

Ground 1: Statutory power

The Court held that section 67(1)(a) permits conditions “regulating the management, use and occupation” of an HMO, and section 67(2)(a) refers disjunctively to “the use or occupation of particular parts of the house by persons occupying it”. The inclusion of “occupation” alongside “use” must extend the scope of permissible conditions, encompassing conditions governing how or by whom a property may be occupied.

The Court considered whether this natural reading was consistent with the statutory scheme. It noted that elsewhere in Part 2 the personal characteristics or activities of occupants are relevant (e.g. the 2006 Regulations on tied accommodation; section 259(2)(a) on full-time students; Schedule 14 paragraph 5 on religious communities). Pre-existing and continuing guidance from environmental health bodies and local authorities (including the East Midlands DASH Guide) had long distinguished between modes of HMO occupation, recognising that communal facilities may compensate for smaller individual rooms in shared (Category B) houses.

The Court rejected Nottingham’s submission that the conditions undermined the policy of reversing Barnes v Sheffield City Council: the houses remained within the regulatory scheme and were subject to rigorous inspection. Crucially, the conditions did not apply lower standards but applied the same objective standards while taking account of the proposed mode of occupation. Where occupants live cohesively, sharing kitchen/diner and living room, the availability of additional communal facilities is a material consideration that may compensate for a slightly undersized bedroom.

Ground 2: Rationality and enforceability

The Court agreed with the Court of Appeal that the original Tribunal conditions were deficient for not preserving communal space or restricting other bedrooms to students, but those deficiencies were cured by the Court of Appeal’s additional conditions.

On the use of “full-time education” as a proxy for cohesive living, the Court accepted that students vary individually but held that the normal expectation in a shared student house is a high level of social interaction and use of shared facilities, making the proxy sufficiently precise. The First-tier Tribunal members had relevant local experience.

The ten-month per year limitation was held to be irrational: if a room is suitable for sleeping for ten months it is suitable for the entire year, and full-time students often need year-round accommodation. That condition was deleted.

On enforceability, the Court noted that landlords’ tenancy agreements already required tenancy to students, that section 72(5) of the 2004 Act provided a reasonable excuse defence where eviction was attempted but failed, and that the sanction of revocation of the licence remained available and sufficient.

Implications

The decision confirms that under sections 64 and 67 of the Housing Act 2004, a local housing authority (or tribunal on appeal) may impose HMO licensing conditions that restrict occupation to a particular class of person, such as full-time students, where the mode of occupation is materially relevant to the suitability of the accommodation. The judgment is carefully circumscribed: the Court emphasised that this does not permit lower standards for particular categories. Rather, the same objective standards apply, but factors such as availability of generous communal living space may, as a matter of common sense, compensate for an individual bedroom marginally below recommended minima where cohesive shared living is expected.

The judgment is significant for landlords of student HMOs, university-city local authorities, and tribunals adjudicating licensing appeals. It legitimises the established practice (reflected in pre- and post-2004 Act guidance) of treating shared (Category B) HMOs differently in practical application from HMOs where occupants live independently.

The decision is notably qualified. The Court drew attention to the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, which from 1 October 2018 imposed a mandatory minimum of 6.51 square metres for single-occupancy sleeping rooms. Class-based flexibility cannot displace such mandatory minima. The Court also indicated that an alternative condition requiring occupants to be members of a group intending to share communal space might more closely reflect the rationale, though the student proxy was acceptable. The ten-month limit was struck down as irrational, illustrating that conditions must be logically connected to the suitability assessment.

More broadly, the case clarifies the breadth of “use and occupation” in section 67, recognising that Parliament intentionally extended permissible conditions beyond mere use to encompass who may occupy and how, while keeping HMO regulation focused on protection of often-vulnerable tenants.

Verdict: Appeal dismissed save that the conditions imposed in respect of each property were varied to delete the requirement that the attic rooms be occupied for only ten months in each year. The remaining conditions imposed by the Tribunals and the Court of Appeal, considered cumulatively, were lawful.

Source: Nottingham City Council v Parr & Anor [2018] UKSC 51