Q. I recently inherited a large 4 storey house that I’m thinking of renting out, however a friend has mentioned the house in multiple occupation legislation (HMO’s), can you tell me more about this?
A. If you have a large property to rent out, the likelihood is that it will be rented out to more than one household, that being the case you would indeed need to be aware of the rules governing houses in multiple occupation (HMO’s). From the government’s perspective, properties with many occupants can often be in a worse physical condition than smaller premises. The rules surrounding HMO’s are set up to ensure that tenants are protected by making sure that their accommodation reaches certain standards. The classification of HMO’s has existed for some time now, but as from 1st April 2006 the rules were considerably tightened up with the introduction of licensing, and certain properties now have to be licensed.
Whether or not a property is licensable is governed by the Housing Act 2004. The main test is where the property is occupied by more than one household who then share basic amenities (such as shared living space, WC’s, washing or cooking facilities). Certain categories of housing must be licensed (namely where there are 3 or more storeys, and it’s occupied by 5 or more people forming 2 or more households). However in addition to this the local council also have discretion to introduce their own specific criteria, so it’s wise to check with your local authority what the rules are in your area.
If the property is a licensable HMO then the Landlord must apply to the local council for a license. There is a fee payable for the application which varies from council to council. If a license is granted, this normally lasts for 5 years, but it can be for less. The license will usually contain restrictions on the number of occupants, and may require certain works to be carried out. If a license is refused then reasons must be given and you can appeal against that decision.
Failure to obtain a license or breaching the terms of a license can bring harsh penalties, including fines up to £20,000, repayment of rent paid to the Landlord, and the Landlord losing their right to evict tenants.