A Beginner’s Guide for HMO Landlords

Introduction

HMO properties are an attractive choice for landlords due to their profitability, but they come with additional demands to ensure tenant safety and compliance. As an HMO landlord, it's essential to understand and address these requirements. This comprehensive guide will provide you with necessary information to start your journey to successfully managing your HMO property while adhering to legal obligations.

What is an HMO Property?

HMO stands for Houses in Multiple Occupation. In simple terms, it refers to a rented property shared by multiple individuals or households. To determine if your property qualifies as an HMO, it's important to understand the different types:

• A house or flat shared by three or more individuals from at least two different households, with shared communal areas.

• A home where the landlord resides as the owner-occupier, but has more than two tenants, with some areas being shared.

• Since The Housing Act 2004, certain student accommodations fall under the category of HMO. These privately-owned properties are shared by students, each treated as a separate household, with exclusive use of their assigned accommodation.

Here's where it becomes more intricate: A building or a section of a building consisting solely of converted self-contained units that do not meet the conversion requirements outlined in the Building Regulations 1991. Additionally, if more than a third of these units are occupied by short tenancies, it is also classified as a Section 257 HMO.

To be considered HMO a property must…

• Be shared by more than two people.

• Be the main residence of the tenants.

• Have rent paid by the tenants.

Legal Responsibilities of HMO Landlords:

As a landlord of an HMO property, you have additional legal responsibilities. Familiarize yourself with these obligations to avoid hefty fines. Here are some key requirements:

• Display a notice with your contact details prominently in the property.

• Ensure proper maintenance and conduct regular health and safety inspections.

• Prevent overcrowding.

• Comply with fire safety standards by installing working smoke alarms and heat detectors, conducting fire risk assessments, and keeping fire escapes clear.

• Maintain a clean water supply, proper drainage, and protect pipes from frost.

• Conduct inspections of electrical equipment every five years and keep records.

• Provide gas and electrical safety records upon request.

• Ensure cleanliness and safety in communal areas.

• Keep the property in good order, both internally and externally.

• Meet local requirements for shared bathrooms and kitchens.

• Facilitate regular refuse disposal.

• Conduct up-to-date legionella risk assessments.

• Obtain appropriate landlord insurance tailored for HMO properties.

HMO Licensing:

Depending on the circumstances, your HMO property may require a license. Here are two scenarios:

What is an HMO License?

As a responsible HMO landlord, it's crucial to determine whether your property requires a license. Certain multiple occupancy HMO properties have a legal requirement for licensing to ensure proper management and compliance.

You will need an HMO license if:

1. Your property has five or more occupants from two or more households and exceeds three stories in height. This is known as mandatory licensing.

2. The local council has concerns about the inadequate management of HMOs in the area. In such cases, additional licensing may be required, and the specific conditions will vary depending on the council.

If you're uncertain about whether your HMO property necessitates a license, it's advisable to consult your local authorities. Some councils mandate all private landlords to obtain a license, so it's essential to verify the requirements to avoid any potential penalties.

HMO License Denials

In the event that the council refuses to grant you an HMO license, there might be an option to designate a different license holder, such as a property manager. Typically, you will have approximately one month to attempt to persuade the council to reconsider their decision. The council will always provide the reasons for their ruling.

Furthermore, the council holds the authority to revoke a license if they suspect violations of the license conditions. If this occurs, you will have a two-week period to respond and one month to appeal to a Residential Property Tribunal.

Non-compliance with the license terms also carries the risk of fines amounting to £5000. If the license conditions are breached, and your tenant receives Housing Benefits, the council can apply for a Rent Repayment Order to reclaim the rent paid during the period when the HMO was unlicensed.

As a landlord, you have the option to voluntarily revoke your license if you wish to change license holders or cease operating the property as an HMO.

Remember, it is a criminal offense to disregard licensing laws, and failing to obtain the necessary license puts you at risk of repaying up to twelve months' rent and facing fines of up to £20,000! Without proper licensing, a Section 21 Notice will be invalid, potentially hindering your ability to evict tenants.

With the information provided in this guide, you now possess the knowledge to be a responsible and competent HMO landlord, avoiding any unforeseen legal requirements. However, it's important to acknowledge that managing an HMO property can present challenges. With multiple tenants under one roof, essential tasks like inventory management can be demanding. Fortunately, No Letting Go offers hassle-free inventory services powered by advanced technology, along with a range of assistance plans to prevent disputes and simplify the process as much as possible.