HMO licensing is difficult at times to understand because licencing varies a lot throughout boroughs in London and the rest of the UK too.
Read on for a full guide on the topic so you can work out what HMO licensing you need for your property. It is also worth thinking about and familiarising yourself with the three different types of licensing you need to be aware of.
HMO properties have been made more popular in recent years and grew by 22% in the years from 2020 to 2022. Read more about this data here.
|Number of Licensed HMOs
Local authorities have prosecuted dozens of landlords for failing to license their HMOs. In 2018 alone, over 70 prosecutions were carried out resulting in fines of up to £30,000.
Licensing has improved rental standards, but critics argue the £500-£1000 cost of a 5 year license limits registration. Many also call for a national register to identify all HMOs and harmonize local licensing rules.
A full guide on HMO licensing
HMO licensing can get difficult to understand, beign by working out if your property is a HMO as part of the first step of managing your property correctly.
Working out if your property is a HMO
If you’ve got three or more tenants from different households, sharing things like kitchens or bathrooms, chances are you’re in HMO territory.
A property is classified as a House in Multiple Occupation (HMO) if it meets one of these conditions:
- A building with two or more people: It is a building where two or more unrelated people or families share facilities like a bathroom, toilet or kitchen. This is known as the ‘standard test’.
- It is a converted building: It is a converted building that has not been entirely made into separate self-contained flats. This is the ‘converted building test’.
- Council-related arrangements: The local council has declared it an HMO due to its living arrangements.
- There is a converted building: It is a block of converted flats where the conversion work does not meet building standards, and less than two-thirds of the flats are owner-occupied. This is called a ‘section 257 HMO’
Finding out if HMO licence applies to your property
Checking with your local council is the easiest and most accurate way to find out. The local authority handles HMO licensing so they will have a definitive answer on whether your property needs a licence. Many councils have online licence checks where you can input an address.
The table below goes over how this works and if there is a mandatory, additional or selective licence that is needed.
How to work out if your property is exempt from HMO licensing
If a HMO is under the care of the Local Housing Authority, registered social landlords, or housing providers, it might catch a break from needing an HMO license.
The same goes for houses looked after by the police, fire brigade, or Health Service Body. Additionally, if a place is regulated by other laws or is occupied by religious communities (excluding specific HMO types), it might get a pass.
Also, if only two people are living there and they form two separate households, that’s another exemption from the HMO license hassle that a lot of landlords overpay on.
What are three types of property licensing?
The three types of HMO licensing you may have heard of are Additional licensing, mandatory licensing and selective licensing. It is important you are aware of all of the types of licences so you know wat on eto use on your property.
This rule is applicable across the country for HMOs, specifically when a property houses five or more occupants from two or more households. However, an exception exists for purpose-built flats within a block of three or more self-contained flats.
Additionally, there are nationally defined minimum sizes for rooms designated as sleeping spaces, and landlords must comply with local council refuse schemes.
How to apply for mandatory HMO licences
If you’re uncertain about whether licensing is required, get in touch with the specific local borough council. Frequently, the relevant information can be found on their website including where to apply.
What legal requirements are there for mandatory licences?
Ensuring compliance with HMO licence requirements involves implementing essential safety measures, such as the installation of smoke detectors and extinguishers. Additionally, it necessitates annual checks to verify gas safety and certification of electrical wiring and appliances every five years.
Adhering to occupancy limits to prevent overcrowding, providing ample cooking and washing facilities, and maintaining communal areas in good repair are crucial aspects of meeting licence criteria. Moreover, proper refuse storage and disposal facilities must be in place to fulfil the necessary standards for HMO licensing.
Overall, meeting these requirements not only ensures legal compliance but also contributes to creating a safe and well-maintained living environment for tenants as agreed in their tenancy agreement.
An additional HMO licence is required in the UK for properties that, in addition to meeting the standard HMO licensing criteria, have certain extra hazards or non-compliances that require the local council to impose extra license conditions.
When a local council enforces a policy mandating licensing for various sizes of HMOs, it may, for instance, implement additional licensing, making it obligatory for all HMOs to undergo the licensing process by carrying out extra fire safety precautions for instance.
A selective licence in the UK is a discretionary licence that local councils can require for rental properties in a designated area that are not mandatory HMOs, but where extra licensing conditions are deemed necessary to tackle issues like anti-social behaviour or low housing demand.
The decision rests with the borough and has the potential to impact all rental properties, irrespective of their size, number of storeys, or the number of occupants.
For instance, a council might enforce mandatory licensing for all residential rental properties within a specific street, ward, or the entire borough. Prior to issuing a licence, the local authority must ensure that both the property owner and any managing agent are deemed fit and proper to hold a licence, and that the property meets the necessary physical standards.
If there is uncertainty regarding whether your property necessitates a licence, it is advisable to reach out directly to the local council for clarification, preferably in written form.
How is the licensing for HMOs enforced?
Enforcement of HMO licences involves thorough checks by the council to ensure compliance with established standards, including considerations like the size and number of bedrooms and proper management.
Additionally, the council assesses the landlord’s suitability as a ‘fit and proper’ person. Find more about what this test of being fit and proper is here.
If a landlord violates regulations, the council has the authority to deny them a licence or revoke an existing one. This process ensures adherence to legal requirements and maintains the integrity of HMO properties.
If tenants believe their landlord is not meeting HMO regulations, they should first raise the issue in writing and keep records. If the landlord does not address concerns, tenants can escalate by making a formal complaint to the council’s environmental health department, which has powers to inspect HMOs and force improvements.
If problems persist, tenants can report hazards to the council, apply for a Rent Repayment Order, check renters’ rights, and as a last resort, take the landlord to court for compensation for poor living conditions. The key is to persistently press the landlord, council and other agencies to ensure the HMO meets legal standards.
What is the punishment for not having a HMO licence?
Not obtaining a licence for a House in Multiple Occupation (HMO) constitutes a criminal offence and is punishable by an unlimited fine in most boroughs.
Can a tenant not pay rent if the landlord doesn’t have a HMO licence?
In some cases, tenants may be able to apply for a Rent Repayment Order if the landlord has failed to properly license the HMO. This means tenants could get back up to 12 months’ rent.
Do councils refuse to grant licences often?
If you licence application is rejected, the council has the authority to refuse it. In such a scenario, they will issue a notice outlining the grounds for their decision.
What is the punishment for a landlord reaching the conditions of a licence?
Usually, there is a timeframe given to rectify anything that is wrong with the property. This timeframe is a lot shorter if the HMO is actively in use with tenants. If a landlord fails after multiple attempts and continues to operate then they may face a banning order.
Depending on the offence, there are a range of fines ranging from smaller £500 fines to £5,000 fines. Smaller offences may include
- Applying to a licence but applying to the wrong one
- Having the right licencing but allowing the property to fall into disrepair
Larger offences may include things like:
- Allowing the property to become overcrowded
- Refusing an inspection from the council