Many HMO landlords and agents will be aware of the case of R(Gaskin) v LB Richmond Upon Thames (2018) EWHC 1996 (Admin). In this case the High Court held that the Provision of Services Regulations 2009, which bring into force the EU Provision of Services Directive applied to HMO licensing schemes. For Mr Gaskin, this had important implications in terms of the fees paid and the form of a licence application. However, as I set out in this blog post there are wider implications for how license schemes operate. These include prohibitions on local authorities discriminating against potential license holders on the basis that they are outside the UK. This meant that many local authorities (along with schemes such as Rent Smart Wales) had to remove restrictions on landlords established outside the UK because this violated EU law and the regulations as all EEA countries had to be treated equally.
However, the government has been quietly producing draft regulations for a range of areas for some time in preparation for our departure from the EU. Recently they produced a draft of the Provision of Services (Amendment) (EU Exit) Regulations 2018 which amend the Provision of Services Regulations 2009. One of the key amendments is to allow authorising bodies (such as local authorities) to discriminate in their licensing schemes against anyone established outside the UK. So, this would permit local authorities to refuse licences to landlords who were not based in the UK.
This is only a draft regulation and it may well be subject to amendment or delays caused by a transition arrangement or some other deal made with the EU. However, with a no deal looking increasingly likely in October is looks like local authorities are likely to be able to operate more restrictive licensing arrangement at that stage. Landlords who are based outside the UK will need to consider how they will deal with this, whether by transferring their properties to organisations or individuals inside the UK or hoping that they will be able to put forward a UK-based licence holder.