Grey areas in exempt and supported accommodation
The niche questions where the rules are unclear: more than minimal support, acting for the landlord, CICs, lease models, HMOs, planning and licences.
Quick answer
Most disputes in exempt accommodation come from questions the regulations never fully answer. How much support is more than minimal, when a support provider acts for the landlord, whether a CIC is a voluntary organisation, and how HMO, planning and tenancy law apply. Decisions turn on facts, so the safest position is a structure that matches what happens day to day.
The short version
- There is no set number of support hours that counts as more than minimal. Councils look at the substance and the records.
- A support provider commissioned by the council may be acting for the council, not the landlord, which can move a scheme out of category 1.
- Community interest companies can be voluntary organisations, but councils check the constitution, accounts and any linked companies.
- Only registered providers and a few public bodies are exempt from HMO licensing. Charities and CICs are not.
- Calling an agreement a licence, a scheme transitional or support intensive does not make it so. The facts decide.
In this guide
The exempt accommodation rules were written in the 1990s for a smaller, mostly commissioned sector. They leave a lot unsaid. Councils, tribunals and providers have filled the gaps over the years, and not always in the same way. These are the grey areas that come up most, what is settled, what is not, and what to do about each.
1. How much support is more than minimal?
What is settled: the support must be more than minimal, a threshold that comes from case law, not the regulations. In R(H) 7/07, a landlord's tenant liaison service was held to be minimal. The same decision said the landlord does not have to be the main provider of support.
What is unclear: there is no number. Some briefings cite around three hours a week as a level tribunals have accepted, but that is one example on its facts.
What to do: record support in a way that would make sense to someone who was not there. Dates, length, what was done, and how it connects to the resident's support plan. Template notes that read the same for every resident undermine the whole scheme.
2. When does a support provider act on the landlord's behalf?
What is settled: for category 1, the support must come from the landlord or from someone acting on its behalf.
What is unclear: when a separate organisation delivers support, it may be acting for the landlord, for the council that commissions it, or for itself. DWP guidance gives the example of a care provider that provides care for the council, so it cannot be counted as support provided by the landlord.
What to do: if you rely on a partner for support, have a written agreement that makes the landlord responsible for arranging it, sets out what the partner delivers for the landlord, and includes how the landlord monitors it. Then make sure the landlord does monitor it.
3. Is a community interest company a voluntary organisation?
What is settled: a voluntary organisation is a body whose activities are carried on otherwise than for profit.
What is unclear: whether a particular CIC passes. CICs have an asset lock, but a CIC limited by shares can pay capped dividends. Councils also look through group structures. In Wirral v Furlong (2013) the council argued that linked companies and a shared director meant the provider was really profit-making. The tribunal had found nobody made a profit on the facts, and the Upper Tribunal dismissed the council's appeal.
What to do: expect to be asked for your articles, asset lock statement, accounts, and details of directors and any connected companies that receive money from the scheme, such as the property owner or a maintenance contractor.
4. Who is really the landlord in a lease model?
What is settled: the landlord for exempt accommodation is the body that grants the occupancy agreement, so a private owner can lease to a charity which then becomes the landlord.
What is unclear: where the charity has no real control, for example the owner chooses tenants, sets rents or handles all management, a council may question whether the charity is genuinely the landlord.
What to do: make sure the lease and management agreement match reality. The landlord should set policy, approve rents, control allocations and hold the relationship with residents.
5. Commissioned or non-commissioned?
What is settled: non-commissioned exempt accommodation is lawful. A provider can fund support from its own income with no contract from the council.
What is unclear: how councils will treat non-commissioned schemes under their supported housing strategies and licensing. The 2026 government response confirmed commissioned services will not have to meet the national standards licensing condition directly, because commissioners are expected to buy support that meets the standards. Non-commissioned providers will.
What to do: if you are non-commissioned, assume you will be judged directly against the national standards and start gathering evidence now.
6. Support charges and intensive housing management
What is settled: Housing Benefit does not pay for support, counselling or personal care. It can pay for eligible service charges and for housing management.
What is unclear: where housing management ends and support begins. Intensive housing management, meaning extra management because of residents' needs, such as more frequent visits, extra repairs from damage and faster reletting, is widely accepted as eligible. Helping someone attend appointments or manage their mental health is support.
What to do: keep a cost breakdown that explains each line, with time records for any staff whose role is split between housing management and support. See rent and service charges.
7. HMO licensing
What is settled: under Schedule 14 to the Housing Act 2004, buildings managed or controlled by a local housing authority, a registered provider of social housing, the police, fire services or certain health bodies are not HMOs for licensing purposes.
What is unclear for many providers: charities and CICs are not on that list. A supported shared house run by a charity with five or more residents from two or more households is likely to need a mandatory HMO licence, and smaller houses may need one under additional licensing.
What to do: check the licensing status of every shared property and keep licences, conditions and inspection records on file. Licensing officers increasingly cross-check against exempt accommodation claims.
8. Planning use class
What is settled: up to six people living together as a single household and receiving care can fall within use class C3(b). Three to six unrelated people sharing basic facilities is usually class C4, a small HMO. Seven or more is usually sui generis and needs permission.
What is unclear: whether a supported shared house is a single household or an HMO depends on how it runs. Many cities, including Birmingham, use Article 4 directions to require planning permission for C3 to C4 changes.
What to do: check the planning history of each property before you lease it, and get advice if the use is borderline.
9. Licence or tenancy?
What is settled: the label on the agreement does not decide whether it is a licence or a tenancy. Exclusive possession usually means a tenancy.
What changed: since 1 May 2026, the Renters' Rights Act applies to private assured tenancies, including supported housing run by landlords that are not registered providers. Licences are outside those reforms. New possession grounds exist for supported accommodation, but only for certain landlords. See the Renters' Rights Act guide.
10. Young people aged 16 and 17 in adult schemes
What is settled: supported accommodation for looked-after 16 and 17 year olds and care leavers must be registered with Ofsted.
What is unclear: referrals of homeless 16 and 17 year olds who have not been assessed by children's services. They may be owed accommodation as children, and adult exempt accommodation is not the answer.
What to do: do not accept under-18s into unregistered adult provision. Ask the council for the children's services assessment.
11. Care homes in disguise
What is settled: if accommodation and personal care are provided together, the service may need to register with the CQC as a care home.
What is unclear: how much connection between landlord and care provider is too much. Shared directors, shared offices and tenancies tied to a care provider all raise questions.
What to do: test whether each resident could change care provider without losing their home, and document the answer. See supported living.
12. People with no recourse to public funds
What is settled: people with no recourse to public funds cannot claim Housing Benefit, so exempt accommodation funding does not work for them.
What is unclear: how providers fund places when councils have support duties under other legislation, such as the Care Act 2014 or the Children Act 1989.
What to do: agree funding in writing with the council before accepting the referral.
Your next step
Pick the grey area that applies to your largest scheme and write a one-page note on your position and evidence.
Questions people ask
How many hours of support make it more than minimal?
No figure is set in law. Some briefings mention around three hours a week as a level tribunals have accepted, but that is one example, not a rule. A council looks at what the support is, how often it happens, who it is for and whether records show it took place.
Can a CIC provide exempt accommodation?
A community interest company can qualify as a voluntary organisation if its activities are carried on otherwise than for profit. Councils usually ask for the articles, asset lock, accounts and information about directors and linked companies. A CIC limited by shares that pays dividends faces harder questions than one limited by guarantee.
Do supported shared houses need an HMO licence?
If five or more people from two or more households share facilities, a mandatory HMO licence is usually needed unless the building is managed or controlled by a registered provider of social housing or another exempt public body. Councils can also require licences for smaller HMOs through additional licensing schemes.
Does a supported house need planning permission?
It depends on the use. A house where up to six people live together as a single household receiving care can fall within use class C3(b). A small shared house of three to six unrelated people is usually C4, and larger HMOs are sui generis. Article 4 directions in many cities remove the right to switch from C3 to C4 without permission.
Is support charged for separately covered by Housing Benefit?
No. Charges for support, counselling and personal care are ineligible for Housing Benefit. Intensive housing management, which is housing management that costs more because of residents' needs, can be eligible if it is properly evidenced and kept separate from support.
Sources
Primary legislation and official guidance come first. Where we rely on commentary, we say so.
- 1R(H) 7/07 summary UK Supported Housing knowledge bank (commentary)
- 2Wirral MBC v Furlong and others [2013] UKUT 291 (AAC) Upper Tribunal
- 3Housing Act 2004, Schedule 14 legislation.gov.uk
- 4The Town and Country Planning (Use Classes) Order 1987 legislation.gov.uk
- 5Housing Benefit guidance for supported housing claims Department for Work and Pensions
- 6Tackling problems with non-commissioned exempt housing Crisis
- 7Housing Benefit 101 FAQs Homeless Link
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