Houses in Multiple Occupation (HMO)
Houses in Multiple Occupation (HMO) Licence Application Checklist
While numerous families reside in the private rented sector, certain properties fall under the category of houses in multiple occupation (HMO). Typically, these properties are leased to individuals without familial ties, with tenants often being students or young professionals.
Due to the unique nature of these tenancies, landlords overseeing HMO properties face additional requirements. These include more stringent fire safety standards, waste disposal regulations, and possibly the obligation to obtain a license to manage the property.
It is crucial to ascertain whether your property qualifies as an HMO and understand the additional obligations that come with managing such a property.
This guide aims to furnish you with the necessary information to determine if you have an HMO and elucidate the responsibilities incumbent upon an HMO manager.
What constitutes a house in multiple occupation (HMO)?
Fundamentally, an HMO is a property inhabited by three or more people, forming two or more households as their primary residence.
However, the Housing Act 2004 introduces various definitions of an HMO, adding complexity to this straightforward definition.
A property falls under the HMO category if at least three people live in it and it meets one of the following criteria:
The standard test or self-contained flat tests: a self-contained building or flat shared by at least three people, where more than one household shares basic amenities like a toilet, bathroom, or cooking facilities.
The converted building test: a building that has been converted and does not solely consist of self-contained flats. For instance, a property where the bathroom is situated in a separate hallway rather than inside the flat.
Section 257 HMO: a converted block of self-contained flats where fewer than two-thirds of the flats are owner-occupied, and the conversion does not meet relevant building standards.
Local authority defined HMO: if the property is not solely used as residential accommodation but satisfies the criteria of other tests, the local authority may designate it as an HMO.
Can a property shared by two people be an HMO?
No, a minimum of three people must reside in the property for it to be classified as an HMO.
I have lodgers in my property; is it an HMO?
If you own the property (either via freehold ownership or a lease of 21 years or more) and have no more than two lodgers, your property will not be considered an HMO. However, this exemption does not apply to Section 257 HMO properties (the converted building test). If you have three or more lodgers, your property will be classified as an HMO, and the management requirements will be based on the total number of people living in the property.
HMO Licensing:
The Housing Act 2004 establishes two types of HMO licenses under Part 2 of the Act: mandatory and additional licensing schemes, each imposing additional obligations on landlords.
What is a mandatorily licensable HMO?
Previously, mandatory licensing applied to properties in England where five or more people, in two or more households, shared a property of three stories or more. This criterion still applies in Wales, but it has changed in England since October 1, 2018.
In England, a property falls within the mandatory licensing regime if it:
Is occupied by five or more persons;
Is occupied by persons living in two or more separate households; and
Meets the standard test; the self-contained test but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or the converted buildings test.
If a building (or part of a building) does not meet one of the above tests but meets one of the other criteria, you may not require a mandatory license, but you might need an additional license.
What is additional licensing for HMO properties?
If a property does not necessitate a mandatory license but the local authority has implemented an additional licensing scheme, you may still require a license.
If a local authority believes that a significant proportion of HMOs in an area or of a particular type are being inadequately managed, causing problems in the local area or for the tenants, they may implement an additional licensing scheme. This scheme must undergo consultation first, ensuring landlords are informed of the requirements ahead of implementation. To stay informed, regularly check your local authority's website for updates on licensing schemes.
The scheme does not have to apply to an entire area or all HMO properties. For instance, it might require additional licensing for HMOs with four or more people in a converted flat in a specific part of the area. However, it can potentially apply to any property that meets the basic HMO requirement.
How do I apply for a license?
Most licenses can be applied for on the relevant local authority website, click here.
How long does my license last for?
Licenses can last up to a maximum of five years, depending on the length of the scheme and the council's satisfaction with your past performance and the property's condition.
If my application fails, should I be refunded?
Licenses are divided into two parts: an administrative charge for processing the license and a charge for enforcing the scheme
#HMO #HouseinMultipleOccupation #HousingAct2004 #LandlordObligations #FireSafetyRequirements #WasteDisposalRules #HMOManagement #RentalPropertyLicensing #MandatoryLicensing #AdditionalLicensing #LicenseApplication #PropertyManagement #LocalAuthorityRequirements #RentingGuidelines #TenancyRegulations #TenantSafety #ComplianceStandards #LivingAccommodationStandards #GoogleListingImprovement #RentingInEngland #LandlordDownloads
