In a House of Multiple Occupancy (HMO), tenants typically share facilities like bathrooms and kitchens, often with individuals from different families.
As a landlord in the UK, it's really important to know and understand the rules and requirements around HMOs and HMO licences to make sure you stay on the right side of the law and that the well-being of your tenants is safeguarded.
In this article, we will explore, HMO rules and requirements, licence requirements for HMOs, and the consequences of being a landlord without an HMO license.
What is an HMO?
A House in Multiple Occupancy (HMO from now on) refers to a property where several individuals, who are not all related, live together. Typically, they share common areas like the kitchen and bathroom while having their separate bedrooms.
HMOs are often chosen by people looking to save on living costs, especially in major cities, such as university students or unmarried working professionals.
Legal definitions
In the UK, an HMO is defined as a house occupied by at least three tenants from different 'households' who share bathroom and kitchen facilities.
A large HMO is a property with a minimum of three stories and five or more occupants from different 'households.' In addition to shared kitchen and bathroom facilities, large HMOs also include shared toilet facilities.
Advantages of renting a property as an HMO
Renting our your property as an HMO can come with several benefits including:
Increased rental income;
Reduced risk of rental loss as if one tenant struggles to pay their rent other tenants will continue to make payments;
Tapping into the rising demand for shared accommodation, particularly in urban areas.
Disadvantages of renting a property as an HMO
While renting out your property as an HMO can offer attractive income opportunities, it also comes with certain challenges:
Increased regulations and licensing requirements
Operating an HMO involves following stricter regulations and licensing requirements compared to standard rental properties, taking more time, effort, and resources.
Increased management responsibilities
Managing an HMO involves handling more tenants and addressing their individual needs and concerns. This can result in increased administrative tasks and responsibilities for the landlord.
Potential conflicts among tenants
With multiple tenants sharing common areas, there is a higher potential for conflicts to arise, such as disputes over shared spaces or noise disturbances. Resolving these conflicts may require additional time and intervention from the landlord.
HMO licence requirements
Properties with multiple unrelated tenants must meet strict safety and welfare standards to secure an HMO licence. In the UK, landlords of larger HMOs are required to get this licence, the specific requirements of which vary depending on the local council.
Requirements for getting an HMO licence include:
Making sleeping areas for adults at least 6.51 square meters;
Providing adequate facilities for washing and cooking;
Implementing fire safety measures including alarms and marked escape routes;
Providing essential amenities;
Conducting regular gas and electrical safety checks;
Maintaining shared facilities.
Failure to comply with these standards can result in significant fines and legal consequences.
Beyond the fundamental HMO guidelines, additional requirements for getting an HMO licence include:
Clear and explicit tenancy agreements outlining the obligations and rights of tenants and landlords;
Getting planning permission where necessary, especially when converting a single residence into an HMO;
Paying council tax and utility bills if this is an obligation of the landlord outlined in the tenancy agreement;
Checking with the mortgage provider regarding any restrictions or requirements regarding HMOs as not all of them permit the usage of properties in this way;
Securing appropriate HMO-specific insurance to adequately protect the property and its occupants if required.
When is an HMO licence required?
Not all properties used as HMOs require a licence. However, a licence is typically necessary for larger HMOs, defined by specific criteria.
To better understand whether your property requires an HMO licence, you should check with your local council, as requirements may vary from one council to another, with some mandating licences for all HMOs within their jurisdiction.
HMO licence restrictions
Not everyone can get an HMO licence, particularly individuals with criminal records or a history of landlord-related legal issues.
Failure to stick to HMO licence regulations can result in fines and legal action against the landlord. Therefore, they should make sure they are familiar with the law relating to HMO and ensure the safety and satisfaction of their tenants as far as reasonably possible.
HMO licence exemptions
HMO licensing requirements may not apply to all properties or landlords, particularly those undergoing specific property conversions.
For example, buildings undergoing conversion into HMOs may be granted temporary exemptions from licensing requirements until the process is complete.
How to apply for an HMO licence
Landlords can apply for an HMO licence by submitting the relevant application through their local council. This can usually be done online.
The cost of a five-year HMO licence varies depending on the council, typically ranging from £500 to £1,000.
In some circumstances, HMO licenses can be refused, especially if the landlord is thought to be unfit or if the property fails to meet required safety standards.
Making changes to an HMO
If there are to be significant changes to a property's use or layout, landlords may need to notify the local council and potentially modify the existing licence to ensure continued compliance with safety standards.
This is usually done in a similar way to the initial application, through the local council.
Consequences of not having an HMO licence
Landlords who operate an HMO without the required licence may face unlimited fines and other legal action against them, not to mention damage to their reputation as a landlord.
How can Lawhive help?
Landlords in the UK need to understand when they need an HMO license and what responsibilities come with operating an HMO. The right licence protects landlords legally but also makes sure tenants have a safe place to live.
If you need legal help with getting an HMO licence or anything else related to landlord and tenant law, such as eviction, our expert network of solicitors is here for you.
At Lawhive, we connect you with fast, affordable online legal help tailored to your situation. Get in touch today for a free case evaluation and fixed-fee quote from our legal assessment team, who will assign the best solicitor in our network to your case quickly, so you can get the support you need without delay.