Next in our HMO series, we cover the detailed topic of HMO regulations and licensing. This article contains helpful links to government resources and professional tips from Property Forum’s CEO (multi-millionaire HMO property developer) Nicholas Wallwork.
Getting up to speed on HMO management regulations
HMOs tend to be more tightly controlled than standard rentals. At the very least, you’ll have to contend with HMO management regulations, which are designed to ensure HMOs are safe and habitable. Depending on the number of tenants, you may also be subject to planning permission and official HMO licensing (licensing is covered below and we discuss planning in a later article).
These HMO management regulations (Management of Houses in Multiple Occupation (England) Regulations 2006) apply to all HMOs, whether they are small or large, licensed or not. The regulations state that anyone running an HMO must:
• Provide contact details to each household occupying the property, and display contact details in the property.
• Ensure that means of escape from fire are maintained and kept clear.
• Ensure that fire precautions (alarms, extinguishers, etc.) are maintained and that appropriate health and safety steps are taken to protect occupants from injury (more on health and safety coming up later).
• Ensure gas safety checks are carried out once a year, and electrical installations are checked every five years. A copy of the gas safety certificate must be supplied to the local council every year, and the electrical safety certificate must be supplied to the council on request.
• Ensure essential services like electricity, gas, water and drainage are provided – and that these services are not unreasonably disrupted.
• Keep the property in a good state of repair, and take reasonable precautions to ensure the property’s structural safety.
• Ensure common areas are clean, well maintained and have adequate lighting.
• Ensure any repairs to common areas and living accommodation are properly carried out.
• Clean each rented unit (i.e. each bedroom) at the start of each new occupation.
• Provide adequate waste storage facilities (if not already provided by the council) and ensure waste is collected.
If you’re found to be in breach of these regulations, local authorities can impose fines of up to £30,000 (at the time of writing) and potentially ban you from operating HMOs.
Will you need a mandatory HMO license?
You will need to work out whether mandatory HMO licensing applies to your property. Licensing is an entirely separate consideration from the HMO management regulations above. HMO management regulations apply to all HMOs, but not every HMO will require licensing.
Mandatory licensing applies when a property is rented to five or more tenants, forming more than one household, sharing kitchen or bathroom facilities. So, in theory, an HMO rented to four tenants or fewer doesn’t need licensing. But, as with planning permission, some local authorities take a stricter view than others and impose licensing on smaller HMOs.
Pro tip: If your local authority has a dedicated HMO Enforcement Officer (many do), he or she should be your first port of call for advice on local licensing requirements. Failing that, the local Housing Officer should be able to tell you more.
Head to www.gov.uk for more on HMO licensing and to apply for a licence. You’ll be charged a fee for each application, and this is set by your local council.
Once you’ve applied, the council will usually send someone to inspect the property and assess whether:
• The property is suitable for the number of proposed tenants (depending on size and facilities). Essentially, your HMO licence will be for a set number of occupants and you’ll be fined and potentially banned from running HMOs if you breach these limits. This means it’s really important to apply for the correct occupancy limit in the first place. If you later decide to increase the occupancy, you’ll need to change your licence.
• The HMO manager (so, you or your managing agent) is considered ‘fit and proper’ to run an HMO. This basically means that you have no criminal record and haven’t been found guilty of breaching landlord laws in the past.
In addition, the council will want to check the property doesn’t pose any health or safety risks, according to the Housing Health and Safety Rating System (HHSRS) risk assessment criteria. If any issues are flagged, you’ll need to fix these before being granted a licence. Then, once you’ve secured a licence, you’ll have to continue to ensure the property remains safe to live in. We talk in more details about HMO health and safety in a later article but, as a minimum requirement, you’ll have to:
• Send the council a copy of your annual gas safety certificate.
• Install and maintain smoke alarms.
• Provide electrical safety certificates when requested.
Pro tip: You’ll notice these points tie up with the HMO management regulations we mentioned earlier. So if you diligently follow the management regulations, this will stand you in good stead for securing (and keeping) an HMO licence.
A few final, critical points to note about HMO licensing:
• Your local authority may add other conditions to your licence. For example, you may have to improve the quality of facilities or manage tenant behaviour to ensure tenants don’t pose a nuisance to other local residents.
• An HMO licence is valid for five years, and you must renew your licence before it runs out.
• You’ll need a separate licence for each HMO you operate.
• If your property is subject to licensing and you rent out rooms without securing a licence first, you could be subject to an unlimited fine and be banned from running HMOs in future.
You can use the catagory search menu at the top right of the page to see all other HMO articles in this series. You can also download our free HMO ebook (written by our CEO Nicholas Wallwork) and ask any questions in the HMO forum.