The legislation about what constitutes a house of multiple occupancy (HMO) is quite complex, with different councils designating different things and a raft of exclusions and exceptions to the rule. But legislation changed in October 2018, meaning more properties could now be classified as HMOs, meaning that it's a good idea to stay up to date.
It’s also a criminal offence not to have an HMO license if one is required for a property, and offending landlords can face an unlimited fine. Basically, it’s an expensive mistake and one that can be avoided. However, not all HMO properties require a license. Confused? Let us help.
What is an HMO?
An HMO, or house of multiple occupation, is classed as a residential property occupied by three or more people sharing facilities such as a bathroom or kitchen who make up two or more households.
In this context a household is defined as a single person or members of the same family (step siblings, foster children and grandparents all qualify) living together. A co-habiting couple is also regarded as one household.
So far, so simple. But different types of HMO require different licenses, and some HMOs don’t require licenses at all, which is where things start to get complicated.
Three different types of HMO license
HMOs that are occupied by five or more people who make up at least two households require a mandatory license. The only exception to this rule are individual flats containing 5 or more tenants located inside a purpose built flat of three or more self-contained flats (large flats inside large blocks, typically found in student housing).
Under mandatory licensing, properties are required to meet certain standards for the number of people living in the accommodation, relating to room sizes, the number of shared facilities per person as well as adhering to fire safety measures. Checks are also carried out to make sure landlords/property managers are “fit and proper” and do not have criminal convictions.
Additional licensing of HMOs is at the discretion of the local council and varies on a case-by-case basis. It was put into place to help tenants of properties not covered by the mandatory licensing scheme (due to size), which may suffer from poor management. Boroughs such as Hammersmith and Fulham have extended their additional licensing to include all privately rented properties with three or more people making up two households but each council is different.
Unfortunately there are a number of exemptions to this type of license and no centralisation of policy across the country. To find out whether or not your HMO property requires this type of license, check your council’s website or contact them directly.
Again this license is at the discretion of the borough and can affect all rental properties, regardless of size and number of occupants. For example a council who may be concerned about conditions for tenants can instigate compulsory licensing of all residential properties within a street, ward or whole borough. Typically, it’s brought in to try and smarten up areas or wards where there have been complaints about standards of accommodation.
If you are unsure whether your property needs an HMO licence, contact your local council directly and obtain clarification preferably in writing. While HMOs that require a mandatory license are easily identifiable, the licensing process for smaller properties is considerably less transparent. Landlords should also remember that they will need an HMO for every relevant property – it’s the residence rather than the landlord that the property relates to.
We take an in-depth look at HMOs, answering most of the key questions around managing licences for a house of multiple occupancy here.
If you've found this useful, take a look at our library of free guides for letting agents, block managers and landlords. Find out more about HMOs and property licensing with our free guides below.
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