Don’t ignore new HMO licensing rules – Unlimited fines for non-compliance
What is a House in Multiple Occupation (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.
Further, the minimum bedroom space will be 6.51sqm for a single bedroom and 10.22sqm for rooms occupied by two adults. Rooms housing children aged ten or below will need to be a minimum size of 4.64sqm.
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.
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 sever. 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.