Do you rent to sharers? Are any of the sharers unrelated? Yes? Your property could be a House in Multiple Occupation - commonly known as an HMO.
There are a number of myths about HMO's:
- That if the tenants sign the same tenancy agreement - it can’t be an HMO
- That if they ‘live like a family’ and share meals - it can’t be an HMO
- That if the Council have told you, you don’t need an HMO license - it can’t be an HMO
Wong, wrong, wrong.
Moreover, if you have five or more people living in the property - whether or not you authorised this, it will automatically be a licensable HMO and you can be fined and/or prosecuted by the Council for failing to have an HMO license.
And your tenants can go to the First-Tier Tribunal and get a Rent Repayment Order for up to 12 months’ worth of rent.
So, it is worth learning something about the complex area of HMO law and practice:
- If you DON’T want to run an HMO - you will know what to avoid
- If you DO want to run an HMO - you will know how to comply with all the rules.
Why we have HMO laws
HMO's come about when people who are not family members share living accommodation. And although some HMO's can be very posh, most often they are at the lower end of the spectrum where most of the worst housing can be found.
So special health and safety rules have been introduced to protect HMO tenants.
Some HMO's - those with over 5 persons living in them, now need to get a license from the council. Penalties for failing to do this are fierce.
Is your property compliant?
The law changed in England last October (2018) to provide for ALL HMO's with more than five persons living in them to be licensable. Before that the rule only be applied to the larger HMO's with three or more storeys.
So, there are probably many landlords renting to sharers who are totally unaware of this change, and that they need to get a license. When the Council find out that they don’t have one it could be very expensive for them. And maybe also for their letting agents! Letting agents can be prosecuted by councils along with their landlords for breach of the HMO rules.
Help is at hand
To help landlords and agents understand the tricky area of HMO law and practice, Landlord Law Services have released a free online ‘HMO 101’ course which explains the law in a simple and easy to understand manner. HMO 101 is part of a larger course which will be released in October 2019. Landlords and agents can take advantage of an ‘Early Bird’ 50% discount offer if they sign up before 20 September 2019.
This is a guest post written by Landlord Law Services.
If you would like to read more about property licensing, download our free Quick Guide on Property and HMO Licensing in England and Wales here.