What landlords need to know about HMOs

A desirable choice for landlords, HMO properties offer lots of advantages however often come with added responsibilities.

We have answered some frequently asked questions which will provide you with everything you need to know about HMOs.

What is an HMO?

HMO is short for houses in multiple occupation. This is a rented house or flat shared by multiple people which can consist of families, single persons, or couples.

To be considered an HMO property however, it must fall into one the following categories:

• a building or flat in which more than one household shares basic amenities, such as bathrooms or cooking facilities
• a converted building that does not entirely comprise of self-contained flats
• a building declared an HMO by the local authority
• a converted block of flats where the standard of the conversion does not meet the relevant building standards and fewer than two-thirds of the flats are owner-occupied: this is known as a section 257 HMO

Helpful hint: most properties are an HMO if the people living there are not related and share facilities.

What is an HMO licence?

If you are a landlord of an HMO, you may legally be required to obtain a licence to make sure the property is being managed correctly.

You will need a licence if your property:

·         is higher than 3 stories

or

·         has 5 or more occupants from two or more households

This is called mandatory licencing.

If you are still not sure if your HMO property needs a licence, you can check with your local authorities. Some councils require all private landlords to apply for a licence so it is worth checking to avoid any unwanted fines.

How to apply for an HMO licence?

An HMO licence application form can be requested from your local council. The application can be made by either the landlord or a property letting agent. Payment is required, and the licence will last up to five years.

You should always have copies of essential documentation ready to include with the application. These include:

• Gas Safety Certificates for the property
• Electrical Safety Certificate for the property 
• A plan of the property 

Councils also look at the following factors before deciding to grant a licence:

• If the HMO property accommodates the number of people living there, and if the shared facilities are suitable
• If the landlord or managing agent are ‘fit and proper’ to take on the role (this can include looking at criminal convictions and previous unlawful discriminations as a landlord)
• Since 1st October 2018, councils also check that bedrooms meet the minimum size requirements.

If you require a licence, you can apply for an HMO licence here.

Can an HMO licence application be refused?

It is possible for the council to refuse your application, but they will always give you a reason behind their decision. Applicants are usually granted a month to try and persuade the council to change their decision.

What are the penalties for not having an HMO licence?

Landlords who fail to apply for a licence face fines of up to £20,000. Landlords can also be fined separately for failing to comply with licence conditions.

Councils however cannot prosecute you if you have applied for a licence or exemption and no decision has been made.

Managing an HMO property is not always easy. If you are thinking of taking on the HMO model, make sure you understand your full responsibilities or work with an experienced property letting agent.