The idea of renting out a property as an HMO rather than a traditional let may well be appealing to numerous property investors, however it is crucial to understand that there are additional regulations and legislations that must be adhered to with HMO investments. Depending on the size and location of the property, some HMOs require the manager to apply for an HMO Licence before they can rent the property to members of the public. Here we take a look at some of the requirements you will need to fulfil in order to obtain and be in compliance with your HMO licence.
If your property is deemed as a large HMO then you will be required to hold an HMO licence, a large HMO is defined as a property which has five or more people living there, is at least three storeys high and the tenants share bathroom, toilet and kitchen facilities. Some local councils will require a landlord to hold a licence even if the property falls outside of the above criteria, for that reason it is essential for you to check if a licence is required for your property or not. Once obtained, an HMO licence can last up to five years (this will vary depending on each council), as a result it is imperative to renew your licence before it expires – renting a property without a licence can result in fines of up to £20,000! For property investors who are considering more than one HMO, you will be required to submit a licence application for each property.
To comply with the HMO regulations there are certain conditions/standards which must be met, these include:
- The house being suitable for the number of occupants (adequate size/washing & cooking facilities etc.)
- The manager of the house being deemed ‘fit and proper’ (no criminal record or past breaches of landlord laws/code of practice)
- Sending the council an up-to-date gas safety certificate each year
- Install smoke alarms and ensure they are properly maintained and no main access ways are blocked
- Ensure that fixed electrical installations are inspected and tested by a qualified individual at least once every five years
- Provide safety certificates for all electrical appliances when requested
- Provision of suitable facilities to dispose of all the waste produced by the property
- Ensure proper care and maintenance of the property, both in communal areas and each individual living unit
As a landlord you must also inform the local council of any of the following:
- You plan to make changes to the HMO
- Your tenants make changes
- Your tenants circumstances change (e.g. they have a child)
Of course these aren’t the only regulations that prospective landlords must adhere to, there are other considerations that all landlords must adhere to by law regardless of the property that is managed. You can find more information about each landlord regulation click here.
A full detailed explanation of all the HMO regulations can be found in the government publication “Licensing of houses in multiple occupation in England: a guide for landlords and managers” which can be found here.