HMO Licence Conditions: When Can Councils Ask for Tenant Data? Upper Tribunal Clarifies

Neutral Citation Number: [2026] UKUT 234 (LC) Case No: LC-2025-331 IN THE UPPER TRIBUNAL (LANDS CHAMBER) AN APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER) Ref: CHI/00MR/HML/2024/0001 & 0002 Royal Courts of Justice, Strand, London, WC2A 2LL 26 June 2026 TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007 HOUSING – HOUSE IN MULTIPLE OCCUPATION – whether licence conditions appropriate – whether regulation 15(1)-(3) of the Provision of Services Regulations 2009 applies to the licence conditions – approach where the same conditions are included in all licences BETWEEN: [APPELLANT] Appellants -and- PORTSMOUTH CITY COUNCIL Respondent 1 Sheffield Road, Fratton, Portsmouth, PO1 5DP His Honour Judge Johns KC Hearing date: 21 April 2026 Written submissions: 28 April 2026 Michael Field (instructed by Freemans Solicitors ) for the appellants Mathew McDermott (instructed by Portsmouth City Council, Legal Services ) for the respondent © CROWN COPYRIGHT 2026 The following cases were referred to in this decision: Hussain (Nasim) and others v Waltham Forest London Borough Council [2023] EWCA Civ 733 R (Gaskin) v Richmond upon Thames LBC [2018] EWHC 1966 (Admin) R (Hemming) v Westminster City Council [2015] UKSC 25 Hemming v Westminster City Council C316/15 Harmsen C341/14 Kirchstein C-393/17 Cali Apartments SCI C-724/18 Nottingham City Council v Parr [2018] UKSC 51 Introduction 1. Part 2 of the Housing Act 2004 ( the 2004 Act ) requires every house in multiple occupation ( HMO ) to which the Part applies to be licensed. There are specified conditions which must be included in such a licence – see the 2004 Act at s.67(3) and Schedule 4. The local housing authority also has the power to include other conditions it considers appropriate – see s.67(1) . This appeal is about conditions included by the respondent local housing authority, Portsmouth City Council ( the Council ), in an HMO licence ( the Licence ) granted to the appellants, [APPELLANT], in respect of 1 Sheffield Road, Portsmouth PO1 5DP ( the Property ). Factual background and FTT Decision 2. The Licence was granted to [APPELLANT] on 29 January 2024. It included 36 conditions. On the evidence before the First-Tier Tribunal, Property Chamber ( the FTT ), those conditions are in a standard form which is applied across the city of Portsmouth and which aligns the Council’s mandatory licensing of HMOs with its other licensing schemes. They were arrived at after consultation. 3. [APPELLANT] appealed to the FTT against many of the conditions in the Licence. The FTT also dealt on the same occasion with an appeal by [APPELLANT] in respect of like conditions in a licence granted to [APPELLANT] for another HMO, 38 Hudson Road, Southsea, PO5 1HD.

4. Some variations to the conditions in the Licence, as well as in the licence for 38 Hudson Road, were made by the FTT in its decision which, as reviewed, is dated 30 June 2025 ( the Decision ). But the majority of conditions challenged were not varied on appeal. This appeal 5. [APPELLANT] now appeal with the permission of this Tribunal given by the Deputy Chamber President on 19 September 2025.

6. There are six grounds of appeal, each relating to one or more conditions in the Licence challenged by [APPELLANT]. It is convenient to tackle each ground of appeal in turn, identifying which of the conditions in the Licence such ground applies to, and setting out, so far as necessary, in full or in summary the substance of those conditions challenged.

7. But first, it is helpful to describe the proper approach to appeals against licensing decisions and outline the relevant statutory framework for those decisions. Approach to appeals and the statutory framework 8. The task of the FTT on appeals from a licensing decision under Part 2 of the 2004 Act has been clarified by the Court of Appeal in Hussain (Nasim) and others v Waltham Forest London Borough Council [2023] EWCA Civ 733 . It is to determine whether the decision under appeal was wrong at the time when it was taken, where “wrong” means that the FTT disagrees with the decision despite having accorded it the deference or special weight appropriate to a decision involving the exercise of judgment by the body tasked by Parliament with the primary responsibility for making licensing decisions. Put simply, the question the FTT must address is, does the tribunal consider that the authority should have decided the application differently? The FTT is not asking whether the decision of the authority was within the range of decisions reasonably open to it, as might be done on a judicial review.

9. As to an appeal to this Tribunal from the FTT’s decision, while the argument for [APPELLANT] described each of their complaints about the decision as an error of law, an appeal from the FTT on a decision under the 2004 Act is not confined to errors of law. An appeal also lies on other points under s.231 C of the 2004 Act . In any event, as stated in the Upper Tribunal (Lands Chamber) Practice Directions at [10.3], what is a point of law is widely interpreted. The question for this Tribunal is therefore simply whether the FTT went wrong in its task as described in Hussain .

10. Insofar as it is concluded on this appeal that the FTT was in error, it became common ground at the hearing that, in the interests of saving costs and avoiding delay, I should go on and decide whether the challenged conditions should be varied rather than remitting the case to the FTT to make those decisions again.

11. It is s.67 of the 2004 Act which governs the inclusion of conditions in HMO licenses. It provides as follows: “67 Licence conditions (1) A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following– (a) the management, use and occupation of the house concerned, and (b) its condition and contents. (2) Those conditions may, in particular, include (so far as appropriate in the circumstances)– (a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it; (b) conditions requiring the taking of reasonable and practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the house; (c) conditions requiring facilities and equipment to be made available in the house for the purpose of meeting standards prescribed under section 65; (d) conditions requiring such facilities and equipment to be kept in repair and proper working order; (e) conditions requiring, in the case of any works needed in order for any such facilities or equipment to be made available or to meet any such standards, that the works are carried out within such period or periods as may be specified in, or determined under, the licence; (f) conditions requiring the licence holder or the manager of the house to attend training courses in relation to any applicable code of practice approved under section 233. (3) A licence must include the conditions required by Schedule 4. (4) As regards the relationship between the authority's power to impose conditions under this section and functions exercisable by them under or for the purposes of Part 1 (‘Part 1 functions’)– (a) the authority must proceed on the basis that, in general, they should seek to identify, remove or reduce category 1 or category 2 hazards in the house by the exercise of Part 1 functions and not by means of licence conditions; (b) this does not, however, prevent the authority from imposing licence conditions relating to the installation or maintenance of facilities or equipment within subsection (2)(c) above, even if the same result could be achieved by the exercise of Part 1 functions; (c) the fact that licence conditions are imposed for a particular purpose that could be achieved by the exercise of Part 1 functions does not affect the way in which Part 1 functions can be subsequently exercised by the authority. (5) A licence may not include conditions imposing restrictions or obligations on a particular person other than the licence holder unless that person has consented to the imposition of the restrictions or obligations. (6) A licence may not include conditions requiring (or intended to secure) any alteration in the terms of any tenancy or licence under which any person occupies the house.” 12. Paragraph 1 of Schedule 4 contains the principal conditions required by Schedule 4 to be included in licences under Part 2 of the 2004 Act . Additional mandatory conditions appear in paragraphs 1A to 1C. It is sufficient to set out paragraphs 1 and 1C (omitting the headings). “1(1) A licence under Part 2 or 3 must include the following conditions. (2) Conditions requiring the licence holder, if gas is supplied to the house, to produce to the local housing authority annually for their inspection a gas safety certificate obtained in respect of the house within the last 12 months. (3) Conditions requiring the licence holder– (a) to keep electrical appliances and furniture made available by him in the house in a safe condition; (b) to supply the authority, on demand, with a declaration by him as to the safety of such appliances and furniture; (c) where the house is in England, additionally— (i) to ensure that every electrical installation in the house is in proper working order and safe for continued use; and (ii) to supply the authority, on demand, with a declaration by him as to the safety of such installations; (d) for the purposes of paragraph (c) "electrical installation" has the meaning given in regulation 2(1) of the Building Regulations 2010. (4) Conditions requiring the licence holder– (za) where the house is in England— (i) to ensure that a smoke alarm is installed on each storey of the house on which there is a room used wholly or partly as living accommodation, and (ii) to keep each such alarm in proper working order; (a) where the house is in Wales, to ensure that smoke alarms are installed in the house and to keep them in proper working order; (b) in either case, to supply the authority, on demand, with a declaration by him as to the condition and positioning of such alarms. (4A) Where the house is in England, conditions requiring the licence holder— (a) to ensure that a carbon monoxide alarm is installed in any room in the house which is used wholly or partly as living accommodation and contains a fixed combustion appliance other than a gas cooker; (b) to keep any such alarm in proper working order; and (c) to supply the authority, on demand, with a declaration by him as to the condition and positioning of any such alarm. (5) Conditions requiring the licence holder to supply to the occupiers of the house a written statement of the terms on which they occupy it. (6) In sub-paragraph (4A) “room” includes a hall or landing. (7) For the purposes of sub-paragraphs (4) and (4A), a bathroom or lavatory is to be treated as a room used as living accommodation. … 1C. Where the HMO is in England, a licence under Part 2 must include conditions requiring the licence holder to comply with any scheme which is provided by the local housing authority to the licence holder and which relates to the storage and disposal of household waste at the HMO pending collection” 13. Also relevant to this appeal is the power in s.235 of the 2004 Act to give notice requiring the production of documents the local housing authority reasonably requires. That section is in these terms. “(1) A person authorised in writing by a local housing authority may exercise the power conferred by subsection (2) in relation to documents reasonably required by the authority– (a) for any purpose connected with the exercise of any of the authority's functions under any of Parts 1 to 4 in relation to any premises, (aa) for any purpose connected with the exercise of any of the authority's functions under this Part in relation to any qualifying residential premises within the meaning given by section 2B, or (b) for the purpose of investigating whether any offence has been committed under any of Parts 1 to 4 in relation to any premises or under this Part in relation to any qualifying residential premises within the meaning given by section 2B. (2) A person so authorised may give a notice to a relevant person requiring him– (a) to produce any documents which– (i) are specified or described in the notice, or fall within a category of document which is specified or described in the notice, and (ii) are in his custody or under his control, and (b) to produce them at a time and place so specified and to a person so specified. (3) The notice must include information about the possible consequences of not complying with the notice. (4) The person to whom any document is produced in accordance with the notice may copy the document. (5) No person may be required under this section to produce any document which he would be entitled to refuse to provide in proceedings in the High Court on grounds of legal professional privilege. (6) In this section ‘document’ includes information recorded otherwise than in legible form, and in relation to information so recorded, any reference to the production of a document is a reference to the production of a copy of the information in legible form. (7) In this section ‘relevant person’ means, in relation to any premises, a person within any of the following paragraphs– (a) a person who is, or is proposed to be, the holder of a licence under Part 2 or 3 in respect of the premises, or a person on whom any obligation or restriction under such a licence is, or is proposed to be, imposed, (b) a person who has an estate or interest in the premises, (c) a person who is, or is proposing to be, managing or having control of the premises, (d) a person who is, or is proposing to be, otherwise involved in the management of the premises, (e) a person who occupies the premises.” Ground 1 14. Ground 1 for this appeal concerns condition 18 in the Licence. Condition 18 should be set out in full. “The licence holder is to ensure that the requirements of landlord and tenant legislation are properly adhered to. In particular, the licence holder will ensure that written terms of tenancy are to be provided for all occupiers. These terms will describe and give details of: a. The type of tenancy, its duration and terms of notice. b. The amount of rent due together with dates and method of payment, and the circumstances when the rent may be reassessed. c. The amount of deposit taken, how it is held and the terms for its return. d. An inventory of contents and condition at the commencement of the tenancy. e. The means of contacting the property owner and/or property manager to report repairs, etc. The Licence Holder must, on demand, ensure that the Authority is provided with a copy of the written terms of tenancy described above*” 15. The asterisk appears to be designed to draw attention to a note at the foot of the conditions in the Licence. “Note: Where on demand is stated within these licence conditions, this means within 7 (seven) days from the written request by the licensing authority.” 16. A number of points are advanced under this ground and for which permission to appeal was granted by this Tribunal. One, that condition 18 is contrary to s.67(5) and s.67(6) in that it will involve altering existing tenancy terms and oblige the tenants to agree those terms. Two, that it does not properly reflect the condition in Schedule 4, para.1(5). Condition 18 refers only to tenants, not occupiers more widely. Three, that condition 18 also fails to reflect the para.1(5), Schedule 4 condition in going well beyond it. Condition 18 specifies the substance of tenancy terms, not merely requires a written statement of such terms as there are.

17. The FTT dealt with condition 18 in this way in the Decision. “176. Condition 18: We would not vary the same. 177. We are satisfied that the condition as worded provides a clear explanation as to what requirements the Respondent considers suitable for such lettings. We agree. We note [APPELLANT] does provide agreements. Equally [APPELLANT] provides inventories. We do not accept this condition would provide any additional administrative burden and in fact contains requirements which aid and assist good management.” 18. At the hearing of this appeal, the Council submitted that the FTT was right in the Decision not to vary condition 18. Mr McDermott, appearing for the Council, argued that condition 18 did exactly what para.1(5) of Schedule 4 requires; that the licence holder supply to the occupiers a written statement of the terms on which they occupy. He submitted that Schedule 4 does not set out the text of conditions but rather specifies goals. It is for the local housing authority to decide how to achieve those goals and to frame conditions accordingly. Nor did condition 18 offend s.67(5) or (6). He pointed to evidence before the FTT from the Council to the effect that the condition would only be applied to new, not existing, tenancies. He also pointed to the evidence as an answer to the complaint that condition 18 referred to tenants, not occupiers. The evidence before the FTT was that the occupiers at the Property were tenants, the rooms being used as student lets, save for occasional short visits by members of [APPELLANT]’s family.

19. The reasoning of the FTT appears to regard condition 18 as extending to the substance of the arrangements between the licence holders and the tenants. I take the same view. For example, condition 18 specifies that the terms of the tenancy will include detailing an inventory of contents and condition at the commencement of the tenancy. It follows, in my judgment, that the condition is not justified by the list of mandatory conditions in Schedule 4, contrary to the submission for the Council. Mr McDermott is right that Schedule 4 does not set out the precise text of conditions, but it is plain from para.1(5) that it is concerned only with a requirement to supply a written statement of terms, and does not extend to prescribing the substance or scope of those terms. That condition 18 does so extend also means, in my judgment, that it offends s.67(5) and s.67(6) . In that regard, I do not consider it can be read as applying only to new lettings. There are no words in condition 18 which confine its operation in that way. That it is not limited to new lettings is rather underlined by the Council’s case that the condition is intended to give effect to para.1(5) of Schedule 4. The requirement to give a written statement of terms could be expected to apply to all occupiers, not only new occupiers.

20. It follows from these conclusions that it is my judgment the FTT did go wrong in its task when dealing with condition 18 and that the Council was wrong in the different sense that I disagree with its decision. The appropriateness of a condition must be judged, it seems to me, in light of the justification offered for it. Here, the points said to justify condition 18 in the Licence do not point to it being an appropriate condition.

21. It is unnecessary to decide whether it is fatal to condition 18 that it refers to tenants rather than occupiers. While it is plainly safest for local housing authorities to follow closely the wording in Schedule 4, conditions should generally be chosen and framed having regard to the particular property being licensed. Here, paying occupiers at the Property were, on the evidence, tenants. It may be that, in those circumstances, condition 18 did properly reflect para.1(5) of Schedule 4. As to the terms of a licence going beyond the mandatory conditions, I would not go so far as saying that any extension to the mandatory conditions in Schedule 4 is illegitimate. As long as those mandatory conditions are included in a licence, that there are also further requirements included might not necessarily be fatal. If those can be regarded as additional conditions which have their own justification, they may be appropriate within s.67(1) and (2). That is consistent with the explanatory notes to the 2004 Act at para.197. It is there said of conditions under s.67(1) and (2) that, “Any such conditions will be in addition to those laid out in Schedule 4 which sets out mandatory conditions”.

22. There was a further argument made for [APPELLANT] on condition 18 at the hearing. It was that, in extending to the substance of the arrangements with occupiers, it went beyond “the management, use and occupation of the house” and so fell entirely outside s.67(1) of the 2004 Act . This point did not form part of the grounds of appeal so there was no permission for it. It is best addressed in a case where it arises squarely and is fully argued. I therefore say no more about it.

23. Condition 18 will be varied so that it simply mirrors the mandatory condition in Schedule 4, as proposed by [APPELLANT] before the FTT (in the addendum to their statement of case). “The licence holder must supply to the occupiers of the house a written statement of the terms on which they occupy it.” Ground 2 24. Ground 2 is a challenge to conditions which require documents to be given to the Council on request or on demand. It is said that these subvert s.235 of the 2004 Act . The conditions specified in the grounds of appeal are conditions 18, 20 and 32.

25. Condition 18 has already been set out. Conditions 20 and 32 are as follows: “20. The Licence Holder must ensure that references are requested from persons who wish to occupy the house and wherever possible, are obtained. When referencing consideration must be given to the tenant’s history, credit and right to rent checks. The Licence Holder must, on demand, ensure that the Council is provided with a copy of any such references and records.” “32. A written record of visual inspections of the property undertaken by the licence holder relating to the overall condition of the property and Management Regulations shall be maintained by the licence holder and produced to the council when requested.” 26. These must be read with the note at the foot of the conditions already set out at [15] above.

27. By s.235 Parliament has provided for a right to demand documents and has taken care to ensure that the notice specifies very clearly how it is to be complied with ( s.235(2) (b)) and warns clearly of the possible consequences of non-compliance ( s.235(3) ).

28. Given s.235 and its safeguards, it does seem to me that conditions which provide for production of documents on demand outside of s.235 at the very least need particular justification. Such particular justification is lacking here. In those circumstances, I would expect the FTT on appeal to strike down at least those parts of the conditions requiring production of documents on demand or request.

29. The FTT nevertheless upheld these conditions. It dealt with the s.235 argument as follows in the Decision at [151]. “We do not accept this argument. We are not satisfied there is any reason why a condition cannot or should not require a licence holder to keep and retain records. We accept the evidence and explanation given by [NAME] that this places a positive requirement upon a licence holder which goes beyond Section 235 of the Act . We do not find that any conditions requiring a landlord to keep and retain records which could be requested under Section 235 of the Act subverts the intent of that section. To the contrary we can see how this furthers the aim by placing a positive duty on licence holders to retain and hold such documents so if a request is made they produce the same.” 30. I agree with that, so far as it goes. The keeping of records makes much sense as a condition. But this does not meet the s.235 point; focussing instead, as it does, on the requirement to keep records.

31. Mr McDermott sought to support these conditions by pointing to the fact that some of the mandatory conditions in para.1 of Schedule 4 require the production of documents to the local housing authority on demand. That is true. But they are of a different nature. They are declarations to be made by the licence holder, not underlying records. Those mandatory conditions are not therefore in any tension with s.235 of the 2004 Act . Unlike conditions 18, 20 and 32 in the Licence. I would add that while it must be acknowledged that there is one mandatory condition requiring production to the local housing authority of an underlying document, namely the condition in para.1(2) of Schedule 4 concerning a gas safety certificate, that is in a different form; requiring, as it does, production annually, not on demand.

32. Mr McDermott also rightly emphasised the broad discretion given to the local housing authority by s.67(1) of the 2004 Act to impose appropriate conditions. This was a submission he made generally on the appeal. But individual conditions must still be justified as appropriate. Here, no real justification is offered for conditions which cover like ground to s.235 but without its safeguards.

33. For these reasons, I consider that the FTT was in error in upholding these conditions and also that the Council was wrong to include them to the extent that they went beyond the keeping of records and gave the right to demand their production outside of s.235 of the 2004 Act .

34. Conditions 20 and 32 will be varied so as to remove the obligation to produce the documents to the Council on demand or request, but not otherwise. Ground 3 35. Ground 3 for the appeal relied on regulation 15(1)-(3) of the Provision of Services Regulations 2009 ( the Regulations ). “(1) An authorisation scheme provided for by a competent authority must be based on criteria which preclude the competent authority from exercising its power of assessment in an arbitrary manner. (2) The criteria must be—… (b) justified by an overriding reason relating to the public interest, (c) proportionate to that public interest objective, (d) clear and unambiguous, (e) objective, (f) made public in advance, and (g) transparent and accessible. (3) The conditions imposed by a competent authority for granting authorisation for a new establishment under an authorisation scheme must not duplicate requirements and controls— (a) to which the provider of the service is already subject in the United Kingdom, and (b) that are equivalent or essentially comparable as regards their purpose.” 36. It was contended before the FTT for [APPELLANT] that the conditions in the Licence had not been shown to be based on the criteria set out in regulation 15(1), and some duplicated requirements and controls in existing legislation contrary to regulation 15(3). For the applicability of these regulations to licensing conditions under Part 2 of the 2004 Act , [APPELLANT] relied on R (Gaskin) v Richmond upon Thames LBC [2018] EWHC 1966 (Admin) , a decision of the Divisional Court.

37. The FTT rejected these contentions, preferring the argument for the Council that regulation 15 did not apply to these Licence conditions; Gaskin being a case about payment of a fee which could be distinguished. There were no such restrictions on the s.67(1) discretion. 38. [APPELLANT] renew their complaint on this appeal. Their list of conditions to which this ground of appeal relates is: 8, 10, 11, 15, 25, 26, and 32.

39. Before considering the arguments in response for the Council on this appeal, some detail should be given of the decision in Gaskin . That case was a challenge by way of judicial review to the requirement to pay a fee when applying to renew an HMO licence under Part 2 of the 2004 Act . It was argued that the fee should not be the same as that payable on an application for a first licence and that it wrongly included a contribution to the costs of running and enforcing the licensing scheme (contrary to the decision of the Court of Justice of the EU ( CJEU ) on the question referred to it in R (Hemming) v Westmin