Section 257 HMOs Explained: Licensing for Converted Flats

Not every HMO licensing trap looks like an HMO. A significant number of London landlords own a single self-contained flat in a converted building with no idea that Section 257 of the Housing Act 2004 could mean the entire building requires an HMO licence — not because of how any individual flat is let, but because of how the building itself was converted, and when.

What is a Section 257 HMO

Section 257 applies to buildings that have been converted into self-contained flats where the conversion did not meet the standards of the Building Regulations 1991 — in practice this usually means the conversion took place before June 1992, since that is the point at which the relevant building standard came into force. The second condition is about ownership: less than two-thirds of the flats in the building must be owner-occupied. Where both conditions are met, the building as a whole is treated as an HMO for licensing purposes, regardless of whether any single flat, looked at on its own, would ever ordinarily be considered a shared house or bedsit arrangement.

Why both conditions have to be checked together

A pre-1992 conversion on its own does not automatically trigger Section 257 — if two-thirds or more of the flats are owner-occupied, the building falls outside its scope, because a majority owner-occupied building is treated differently from one dominated by rented, absentee-owned flats. Equally, a building with a low rate of owner-occupation but a conversion that met 1991 Building Regulations standards (typically because it was converted more recently, to a higher fire-safety and structural specification) also falls outside Section 257. It is the combination of an older, lower-specification conversion and a predominantly rented ownership pattern that creates the obligation, because that combination is what Parliament identified as carrying the greatest risk to occupier safety in shared buildings.

Why this catches landlords out

Most landlords think about HMO licensing purely in terms of their own tenancy arrangement — how many unrelated people share their specific flat, and how many households that adds up to. Section 257 does not work that way. A landlord who owns and lets a single, perfectly ordinary self-contained one-bedroom flat, let to one tenant or one family, can still be caught if the wider building meets the two conditions above, because the licensing obligation attaches to the building's structure and ownership pattern rather than to the individual letting inside it. This is precisely why the trap catches out landlords who have never let a room to unrelated sharers in their lives — they assume, reasonably but wrongly, that HMO rules only apply to houses split into bedsits.

How this sits alongside mandatory and additional licensing

Mandatory and additional HMO licensing are both assessed at the level of an individual dwelling — how many people and households share amenities within one specific unit. Section 257 is a separate route into licensing that operates at the level of the whole building, and a single building can, in principle, contain both: a Section 257 licence for the building's structure and common parts, and separate mandatory or additional licences for any individual flats within it that independently meet the household-sharing thresholds. Landlords who only check one of these regimes can end up compliant on paper for the wrong reason.

What's assessed in a Section 257 application

A Section 257 licence application looks at the building's common parts rather than the inside of any individual flat — fire doors onto shared landings, adequate means of escape from each floor, fire detection equipment covering hallways and stairwells, and the safety of any shared or communal electrical installations serving the building. Structural condition of shared areas, and whether waste storage arrangements for the whole building meet the council's requirements, are typically reviewed as well. The electrical certification work required to evidence compliance — an EICR covering communal areas, for example — is a distinct piece of work from the licence application itself. Our sister site, electrician247.london, handles that certification side for London landlords, while we handle the licence application and council liaison.

Common misconceptions worth clearing up

Landlords sometimes assume that because they only own one flat in a converted block, responsibility for a Section 257 licence sits with a freeholder, managing agent, or residents' management company instead. In practice, the person required to hold the licence is generally whoever is the "person having control" or "person managing" the building's common parts — this can be the freeholder, but it can equally fall on individual flat owners in certain ownership structures, particularly where there is no single managing entity taking responsibility. Do not assume someone else has this covered without checking. Another common misconception is that a Section 257 building is exempt if it has fewer than five occupants overall — the five-person threshold that applies to mandatory HMO licensing of individual dwellings has no bearing on whether Section 257 applies to a converted block.

Consequences of an unlicensed Section 257 building

The consequences of operating without a required Section 257 licence mirror those for any other unlicensed HMO. Councils can impose civil penalties, historically up to £30,000 per offence, and from 1 May 2026 under the Renters' Rights Act 2025 this became a tiered structure of up to £7,000 for minor or initial non-compliance and up to £40,000 for serious or repeat non-compliance, with criminal prosecution available as an alternative route in serious cases. Tenants in the building may also be able to bring a Rent Repayment Order claim, and an unlicensed status can complicate a sale or refinancing of any flat within the building, since a buyer's solicitor conducting proper due diligence should flag it.

What to do if you think this applies to you

If you own a flat in a converted building and are not sure whether the wider building falls under Section 257, do not guess based on assumptions about the building's age or how it looks. Contact us with the building's details — its approximate age, conversion date if known, and the ownership split between flats — and we will confirm whether a licence is required and handle the application if it is, working alongside your freeholder or managing agent where relevant.