Quick HMO Lesson
In short, the definition of a House of Multiple Occupation (HMO) is three or more tenants in two or more households. Take for example, if three student nurses share a flat – that will be a HMO. Unless they are sisters. Although if two of the three are sisters and the other is a friend that will be classified as HMO. As there will be two ‘households’ and the friend is not a blood relative.
The definition of a Licensable HMO is currently:
- Five or more tenants
- In two or more households
- In a property with three or more stories
If there are five student nurses sharing – they are unlikely from one family. If the property is a three storey building, it would be a licensable HMO. If it is a two storey building or less it would not be (Unless the Local Authority has an additional licensing scheme).
After 1 October 2018, the three storey requirement will not be applicable. A HMO would be based on the people living in the property. Any property with five or more tenants will be a licensable HMO. Even if it is a bungalow. That mean on 1 October, 2018, if you have any properties with five persons forming two or more households, you will be in breach and possibly face prosecution or a Local Authority penalty charge of up to £30,000. Beside that your tenants could claim First Tier Tribunal for a rent repayment order for up to 12 months rent. Read more about First Tier Tribunal on gov.uk website.
Other Possible problems
How do you know that your properties are not HMOs? Have you checked the number of people living there? What if someone had recently moved in and not told you? What if your family of four people had rented a room to someone, for example if they had taken in a lodger to make ends meet since your last inspection? What if the tenants had moved in the extra person without my consent? That would make it into an HMO. However, the tenant’s breach of contract would justify you taking action to evict them if they failed to regularise the situation.
You need to keep tabs on what is happening at your property and possibly do inspection every three months. Some landlords don’t visit their properties once they’re let, either because they don’t want to disturb the new tenants or because they can’t be bothered, but you really should try to swing by once every few months. So you can take action if new occupiers move in without your consent. And potentially avoid a situation where you suddenly find the Council on your case because you don’t have a HMO license – when you thought you didn’t need one.
These are mandatory conditions which license holder must adhere to:
- An annual gas safety certificate
- Electrical appliances and furniture supplied by the landlord in a safe condition and to supply declarations of their safety to the local council on demand
- Install smoke alarms and keep them in proper working order and to supply to the local council, on demand, a declaration of their positioning and condition
- give the tenants a statement of the terms on which they occupy the HMO.
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