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How do you know if your HMO needs a licence?

Posted 25/05/2023 by Reeds Rains
Categories: Landlords/Lettings
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Over the last decade, the laws around Houses in Multiple Occupation (HMO) licensing in England have tightened up, both in terms of national mandatory licensing and the number of local licensing schemes imposed by individual local authorities. So, if you’re planning to let a property as an HMO, how do you know whether it needs to be licensed, and how do you find out whether local rules apply?

Mandatory licensing

You will definitely need an HMO licence if your property is a ‘large HMO’:

  • Let to five or more people
  • They form more than one household – i.e. not a family
  • Some or all of them share bathroom or kitchen facilities

To secure a licence, which is generally valid for five years, you must ensure:

  1. The property is suitable for the number of occupants
  2. The person managing the property is ‘fit and proper’
  3. The council is provided with a copy of the gas safety certificate every year
  4. You install and maintain smoke alarms as required by law
  5. Electrical safety certificates are provided to the council on request

Your local council may then add other conditions – for instance, that certain facilities are upgraded and it complies with fire safety rules.

You can apply for a licence online via the GOV.UK website and the council will let you know what is required.

Local authority additional licensing schemes

If the property is occupied by three or more people from more than one household, it’s still classified as an HMO, but there is no blanket national requirement for it to be licensed.

However, your local council has the power to extend licensing requirements to any HMO, so it’s vital that you check with them before moving forward with a let, and we’d suggest it’s worth making enquiries before even buying a property that you plan to let as an HMO. Some councils – particularly those that cover city centres – require a high proportion of HMOs to be licensed, while others have very few or even no additional licensing schemes. Also, schemes may cover a whole ward, or they may only apply to certain streets, so knowing ahead of time which areas your local council is focused on may affect your decision on where to invest.

You should be able to search on the council’s website to find out what schemes are in operation and whether there are any new ones planned, but some councils are much better at providing the information than others! So, by far the best way to find out what’s currently in effect and whether your property falls under a scheme, is to speak directly to your local housing department. A good local letting agent should also have this information – and if they’re going to be letting and managing the property, they may be able to apply for the licence on your behalf.

If the local authority wants to introduce a new scheme, they must conduct a consultation that runs for a minimum of 10 weeks, and it must be widely publicised so that local residents, landlords, agents, businesses, etc. have a chance to respond. Once introduced, these schemes generally last for five years, but they can be introduced at any time, meaning an area might have several running at once, all with difference start and end dates, so it can be something of a minefield trying to keep up to date. (See our earlier blog for examples of some recent schemes.) Again, a good local agent can help with this, and it’s also worth joining a local landlords association.

Be aware that if you fail to secure a licence where one is required, it is classed as a criminal offence and the fines can run to tens of thousands of pounds, so it’s essential you know what rules apply. In addition, your tenants could apply for a Rent Repayment Order, which may mean giving them back up to 12 months’ worth of rent.

If you’d like to discuss licensing in your area, the team in your local Reeds Rains branch are always there to help – just pop in or get in touch via phone or email.

HMO licensing in the rest of the UK

In Wales, mandatory and additional licensing is the same as in England, except the mandatory law only applies if the property is three or more storeys.

In Northern Ireland, all HMOs must be licensed – that’s any property occupied by three or more people forming more than two households.

In Scotland, every HMO must be licensed – that’s any property rented out by three or more unrelated people who share bathroom and kitchen facilities.

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