HMOs are quite common in property letting but many landlords tend to get confused about what a HMO actually is and whether they need a licence or not.
In this article, we will attempt to answer the following questions:
- What is a HMO?
- What is a HMO Licence?
- When is a HMO Licence Required?
- Do I Need a HMO Licence?
What is a HMO?
HMO is an acronym for House in Multiple Occupation. (For instance: bedsits, shared houses, student accommodation.)
To be considered a HMO, there must be at least three occupants living within the property. Each household will have their own tenancy agreement, and a household may be formed of only one individual. A HMO may have shared facilities such as a communal bathroom or kitchen, or even just a shared stairwell, corridor or landing.
What is a HMO Licence?
If a property is granted a HMO Licence, the HMO landlord will have more responsibilities in regards to the health and safety of the property and tenants can rest assured that their landlord has been personally vetted. The purpose of licensing is to ensure that HMO landlords are managing the property properly and that the property is suitable for the occupation of the number of tenants it houses. HMO properties that do not meet satisfactory standards can be identified and the local council can intervene to make sure that HMOs do not become overcrowded or unsafe.
If you register your rental property as a HMO with your local authority, they will arrange a visit to your property where they will assess the property management and living accommodations to see whether the property meets the requirements for a HMO licence.
When is a HMO Licence Required?
Not all HMO properties require a licence even if by definition the property is a House in Multiple Occupation. If the property is considered to be a large HMO, meaning that it has three or more habitable storeys and houses five or more occupants in two or more households, the property will legally require a Mandatory HMO Licence and must be registered with your local authority. However blocks of flats may be exempt from the Mandatory HMO Licence requirement if they are converted flats or purpose-built flats – even though they are considered to be HMOs, they are not licensable.
Do I Need a HMO Licence?
If you are unsure as to whether you need a HMO Licence, it is best to contact your local council and arrange an assessment rather than simply assume that you don’t. If your property consists of five or more households, three or more storeys, or shared facilities amongst your tenants (e.g. bathroom or kitchen), then you should contact your council. If you have been found to be running a licensable HMO without having applied for a licence, you may be fined up to £20,000. Furthermore, if you have broken any conditions of the licence, you could be fined up to £5000.
HMO insurance can be frustrating for HMO landlords as houses in multiple occupancy are considered high risk. We at Ashburnham can help you to find an insurance policy tailored to you. Contact us or get a quote online!