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28 November 2018 0 Comments
Posted in Opinion

HMO – new regulations

Posted by , Associate
Contributing authors: Sorcha McGillycuddy

The Housing Act 2004 introduced mandatory licensing for certain HMO properties. However, new legislation is now in force – from 1st October 2018 – amending the rules relating to when a licence is required for an HMO (house of multiple occupation) property.

HMO

What is a HMO?

This is a property which is rented out by at least three people who are not from one ‘household’ but share facilities like the bathroom or kitchen. A licence is required for large HMOs. The new legislation defines a large HMO as one that is rented to five or more people who form more than one household and who share toilet, bathroom or kitchen facilities.

Previously a large HMO would need to be at least 3 storeys high in order to require a licence. The new legislation has removed this which will result in over 170,000 more landlords needing a HMO licence. This does not mean self-contained flats within a block require a licence but if any of those individual flats are occupied by five or more people living as two or more households with shared facilities, then that flat alone will require an HMO licence.

A “single household” is specific and is defined as:

  • A family
  • A single person
  • An employer and domestic staff
  • A carer and the person receiving care
  • A foster parent and child

What else is new?

Room size

The new rules have set out minimum requirements for sleeping accommodation and who can occupy it.  The minimum room sizes are:

  1. 51m2 for one person aged 10 years+
  2. 22m2 for two persons aged 10 years+
  3. 64m2 for one child aged under 10 years.

NB: ANY room of less than 4.64m2 must not be used as sleeping accommodation and any part of the floor area where the ceiling height is less than 1.5m is not take into account when considering the room size – this may affect loft conversions being used for sleeping in HMO properties.

Waste disposal

Suitable waste disposal provisions are also required, in light of the fact that HMOs are occupied by separate and multiple households, and therefore generate more waste and rubbish than single family homes.

Transitional information

The new rules do not apply to licences granted prior to 1st October 2018 – they will apply from renewal of those licences.

If, at the time of renewal, the landlord is not compliant with the new rules regarding room size they have up to 18 months to become compliant.

Remember

When a property is sold, the HMO licence that covers the property cannot be transferred: the new owner will need to apply for a new licence (under the new rules) if they intend to continue to use the property as an HMO.  Given the new requirements over waste disposal and room size, this should be considered before completion to make sure a prospective buyer is aware of any potential alterations to the property that may be required to make the property compliant under the new HMO rules.

Why have HMOs become so prevalent?

HMOs often provide cheaper accommodation for people whose housing options are limited. This is particularly relevant in cities such as London where accommodation is increasingly expensive and where overcrowding and limited housing are of concern. The majority of people who occupy HMOs are students, young professionals and migrant workers.

The new legislation will help to ensure that HMOs are not overcrowded and do not pose a risk to the health and/or safety of the occupiers or blight the local communities in which they are located.

What’s the penalty for non-compliance with HMO licensing rules?

The government is cracking down on overcrowded house shares and therefore the penalty for not having a HMO licence is severe. A landlord can face an unlimited fine and tenants can apply for a rent repayment of up to 12 months.

It is therefore vital that all landlords make sure that they comply with HMO licensing rules, and that the property is fit for purpose. Landlords need to be aware that this legislation broadens the definition of large HMOs, and will include properties that prior to the 1st October did not require a licence.

Advice for landlords

The government have released Guidance for Local Housing Authorities which also provides information that will be of interest to landlords.

To apply for a HMO licence, contact your local council. Licences are valid for five years and you need a separate licence for each HMO you run. Landlords who already hold a HMO licence can continue to let their property until it expires; they will then have to apply for a new licence and make changes to their property so that it meets the new rules. Landlords should be aware that competition is high for licences and that local councils often limit the number of licences granted, therefore it is important to act quickly.

What about planning requirements?

Since 2010, small HMO properties have had their own use class for planning purposes, they come under Class C4 (HMO).  Large HMOs (meaning 6+ people) remain in a class of their own.

What this means is that large HMOs still and always require planning permission (which is separate and additional to the licence) for a change of use from dwellinghouse under Class C3 to HMO.

Small HMOs would not necessarily require planning permission.  It is possible to change the use of a property within its own planning class without permission so changing a property from a C3 (dwellinghouse) to a C4 (HMO) would not require permission since this would be considered as “permitted development”. This does not mean it would not potentially require a licence.  Always note, however, that some local authorities restrict permitted developments as a blanket step and if that is the case, planning permission would be required here to change the use even within its own planning class.

What else do you need to consider?

The management of an HMO comes under its own regulations, which is not new:

  • Management of Houses in Multiple Occupation (England) Regulations 2006 or
  • Management of Houses in Multiple Occupation (Wales) Regulations 2006

Legal advice for professional buy-to-let landlords

If you like to discuss your property portfolio including HMO applications, our specialist team provide legal advice for professional buy-to-let landlords. Contact us on:

0207 282 4310     Email usprivatewealth@roydswithyking.com

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