Home Information Packs. Remember those? Well the same piece of complex legislation that inspired those much-loved documents also heralded a new regime for the licensing of Houses in Multiple Occupation (HMOs). The Housing Act 2004 sets out a new definition of HMO and requires Landlords letting certain types of HMO to apply for a licence from the local authority. There are very strict penalties on landlords who fail to comply. In 2010 a landlord in Brighton was fined £2000 plus costs for failing to register an HMO and last year a Cornish Landlord only avoided a whopping fine of £62,500 for failure to register and other offences because of her ill health and impending bankruptcy.
So what exactly is a House in Multiple Occupation? As might be expected, the definition is not straightforward. In simplified terms, an HMO is a building, or part of a building, that:
- is occupied by persons who do not form a single household
- who use the building as their main residence
- and who share one or more basic amenities (such as a bathroom or kitchen).
Examples might include a house in which rooms are let individually with shared kitchen and bathroom facilities, or a property let to a group of tenants who are not part of the same family, or a building converted into bedsits with shared bathroom facilities.
Not all HMOs need a licence. Compulsory licensing under the Act only applies to HMO’s consisting of
- 3 or more storeys
- occupied by 5 or more people
- in 2 or more households.
So a 3 storey town house let to 5 students would require a licence. As would a two storey property let to 5 people who are not related, where the property is above commercial premises (as the whole building would be 3 storeys). However, the same properties let to 4 people would not require a licence.
The above are the mandatory licensing requirements. BUT individual local authorities have the power to extend licensing requirements locally to other types of HMO, so landlords should always check the definition that applies in their area.
Councils can set their own licence fees, which can be over £1000 per property in some areas and, in addition to a fine of up to £20,000, landlords who fail to apply for a licence can be required to repay the rent received in the period when the HMO was not registered.
The licences, which usually last for around 5 years, impose strict standards on fire and electrical safety, the number of tenants permitted in the property and even on the kind of person who can be a landlord.
The legislation is intended to maintain standards of rented accommodation and, in particular, to stop parts of some cities turning into ghettos with tenants crammed into unsuitable and poorly-maintained properties.
If in doubt, we advise you to check with your local authority. The requirements are onerous and in many cases Landlords may opt to reduce the number of tenants in a property to 4 or less – even if this means a reduction in rent – to avoid having to comply.
Anyone who wants to see a change in the regulation of the private rented sector should submit their views to the Communities and Local Government Committee here.
