When is an HMO not an HMO – Article 4 direction?

Hello, I recently went through a frustrating experience with trying to obtain a Certificate of Lawful Existing Use or Development (CLEUD) on an existing HMO in a newly designated Article 4 Directions area. I would like to share my experience in case this is of assistance to other landlords.

A growing number of councils across England have introduced Article 4 Directions restricting the creation of new small HMOs, while many authorities are also expanding their HMO licensing schemes.

With these measures having significant consequences for landlords, wouldn’t you expect the councils introducing them to be crystal clear about the basics of HMO planning law, starting with what actually constitutes an HMO?

Not so Medway Council, apparently—but more about that later.

So, what is an Article 4 Direction?

In a nutshell, if you want to convert a residential property in planning use class C3 into a small HMO occupied by three to six people forming two or more households, which falls within Class C4, you will need to submit a full planning application if the property is within an Article 4 Direction area.

Outside these areas, a change from C3 to C4 will normally fall within permitted development rights.

HMOs that were lawfully operating as C4 properties before an Article 4 Direction took effect do not need retrospective planning permission simply because those permitted development rights were later withdrawn.

However, an owner may need convincing evidence showing that the C4 use was established before the relevant date and has not subsequently been abandoned. In practice, the burden is on the owner to demonstrate that the property was being used as an HMO before the Article 4 Direction came into force.

Who is affected by Article 4?

A larger group than you might think.

It clearly affects anyone buying a residential property with the intention of converting it into a C4 HMO, as they may now need to submit a full planning application.

However, it can also affect landlords trying to sell an existing HMO; landlords whose properties do not have a long-term track record of HMO use; those attempting to remortgage where the lender wants proof that the use is lawful; landlords wanting to increase the number of occupants; and owners who may be asked to provide evidence of lawful planning use during an HMO licence application.

Planning control and HMO licensing are separate legal regimes, but questions about the lawful planning use of a property can still arise during a sale, remortgage or licensing process.

A property owner can apply for a Certificate of Lawful Existing Use or Development to obtain formal confirmation that an established C4 use is lawful.

That may be because the change of use was permitted development when it occurred, including before an Article 4 Direction took effect, or because an otherwise unauthorised use has continued for the applicable enforcement period.

The certificate confirms the lawful use of the property and can provide valuable reassurance to a future purchaser or lender.

So, what happened to me?

I am a student landlord and, for all the usual reasons, I decided to sell my four-bedroom student HMO at the end of my current five-year fixed-rate mortgage deal.

I found a buyer, another HMO landlord, who made the purchase conditional on me obtaining a Certificate of Lawful Existing Use or Development. Smart move!

I had owned and operated the house as a four-bedroom student HMO since 2010. I submitted my application through the Planning Portal at a cost of £673.

I had mountains of evidence showing continuous C4 HMO use going back to 2010, including tenancy agreements, council tax exemptions, rent statements, HMO mortgage and insurance documents and tenant deposit records. I was fully expecting the certificate to be granted.

I was therefore shocked to receive an email from a senior planning officer at Medway Council telling me that my application “will be refused”.

The reason given was that the property had been let as student accommodation to four individuals on joint tenancies and therefore, according to the officer, would “not constitute C4 (HMO) use”.

I asked for clarification and was told that the council’s approach to HMOs had required the occupants to hold “separate tenancies”.

However, there is nothing in housing or HMO legislation that says an HMO must involve separate tenancy agreements. Whether a property falls within Class C4 depends principally on the factual nature of the occupation, not simply on whether the tenants hold joint or separate agreements.

Following correspondence in which I challenged that interpretation and highlighted the legal position, the council took legal advice—staggeringly—and reviewed its approach.

It subsequently acknowledged that whether a use falls within Class C4 depends on the nature of the occupation rather than the form of tenancy alone. My certificate was then granted.

As well as challenging Medway Council’s interpretation of C4 use, I also had to remind the council that an application for a lawful development certificate is not decided in the same way as an ordinary planning application.

The council was not being asked whether it liked having an HMO at that location. It had to determine, on the balance of probabilities, whether the evidence established that the existing C4 use was lawful.

I had supplied ample evidence to meet that test, and the quality of my evidence was never questioned.

The episode raises an important question.

How can a local authority introduce an Article 4 Direction, with significant consequences for property owners, while apparently misunderstanding the legal test its officers are required to apply?

I felt I had no choice but to raise the issue as a formal complaint to Medway Council. I wanted reassurance that its planning department would make future decisions affecting HMO landlords on the basis of a correct interpretation of the law.

I have since received an apology and confirmation that “reinforced guidance has been provided to officers on the correct interpretation of HMO use classes and the evidential requirements for a Certificate of Lawful Development”.

Certificates confirming lawful use can provide valuable certainty for owners, purchasers and lenders. They can prevent unnecessary disputes, assist with a sale or remortgage and provide protection against planning enforcement action.

My experience has reminded me of the importance of preserving evidence, understanding the law and, where necessary, challenging decisions that appear to misapply it.

The difference between refusal and approval may not lie in the facts at all, but in the authority’s interpretation of them.

Thank you,

Marlena