What counts as a storey?
The definition of a storey for the purpose of mandatory licensing  contained in The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006  is worthy of a closer look as a couple of relatively recent decisions have explained this order in more detail.
Mandatory licensing applies where the following conditions are met (Article 3(2)) –
(a) the HMO or any part of it comprises three storeys or more;
(b) it is occupied by five or more persons; and
(c) it is occupied by persons living in two or more single households.
Article 3(3) then says –
The following storeys shall be taken into account when calculating whether the HMO or any part of it comprises three storeys or more –
After which, the order defines various parts of a building –
(c) and (d) where living accommodation is above or below business premisses
(e) mezzanine floors; and
(f) other storeys
A basement shall be taken into account as a storey of the HMO if –
(i) it is used wholly or partly as living accommodation;
(ii) it has been constructed, converted or adapted for use wholly or partly as living accommodation;
(iii) it is being used in connection with, and as an integral part of, the HMO; or
(iv) it is the only or principal entry into the HMO from the street.
Is it a storey of the building or the HMO?
It is worth pausing for a moment here and first answer a fundamental question. If we assume for a moment there is a two bedroom maisonette on the ground and first floor with it’s own ground floor entrance and there is a self contained flat in the basement, does that basement flat count as a storey?
Article 3(3)(a) provides a basement storey shall be taken into account if (i) it is used … as living accommodation or, (ii) it has been constructed or converted … as living accommodation, (iii) used in connection with the HMO or, (iv) it’s the entrance to the HMO.
Going backwards, clearly (iv) doesn’t apply because in our example the entrance is on the ground floor not the basement. Nor does (iii) because the storey must be used “in connection with the HMO” which, in our example as it’s a self contained flat, is not in connection with our HMO.
However, (i) and (ii) are less clear. They refer to the basement storey as being taken into account if it’s used as living accommodation or was converted for such use.
The High Court and Magistrates Court have ruled in separate cases that the storey must be part of the HMO and not the building.