Houses in multiple occupation – legal risks and tips

What is an HMO? House in Multiple Occupation (HMO) is a term of property law, which relates to rented property with shared facilities (such as kitchen, bathroom or toilet). It could be the case in: Houses split into bedsits Students in shared accommodation Shared houses of three or more tenants where each tenant has got

Home » Uncategorized » Houses in multiple occupation – legal risks and tips

What is an HMO?

House in Multiple Occupation (HMO) is a term of property law, which relates to rented property with shared facilities (such as kitchen, bathroom or toilet). It could be the case in:

  • Houses split into bedsits
  • Students in shared accommodation
  • Shared houses of three or more tenants where each tenant has got their own tenancy agreement
  • Households with a lodger

Hostels

  • Bed & breakfasts, which provide accommodation for homeless
  • Guesthouses (if rented out of season)

When is the HMO licence needed?

The HMO licence is needed if the building:

  • Has got 3 or more residential floors; and
  • is occupied by 5 or more people forming more than 1 household.

A household can be formed by a single person or members of a family living together, which includes same-sex couples or cohabiting unmarried couples but does not include friends living together as they form separate households.

How is the HMO licence obtained?

If the HMO licence is necessary, it needs to be applied for by the landlord at the local council. The following parties need to be informed of the application:

  • The owner of the HMO
  • The mortgage lender, if any
  • Long leasehold tenants
  • Whoever is bound by the licence

A fee is charged when applying for the licence and its amount is decided by the local council themselves.

Requirements to grant the licence

The council needs to assess the shared facilities, size of the HMO and abilities of the landlord in order to grant the licence.

If the licence is refused it is advisable for landlords and local councils to try to resolve any issues between themselves, however if that is impossible then the landlord can appeal to the Residential Property Tribunal.

Licence conditions

The conditions listed in the licence relate to health and fire safety. The licence imposes various responsibilities on the landlord holding the licence such as:

  • Completing a fire risk assessment and consider any fire precautions to ensure the safety of the building and common parts such as fire alarms
  • Producing a gas safety certificate
  • Ensuring that all the electrical equipments are in the working order
  • Installing smoke alarms or providing fire extinguishers etc.

The local council is responsible for enforcing the licence conditions and if a tenant living in the HMO complains about any of the conditions the local council will take action against the landlord to correct any fault.

The licence is usually granted for 5 years, it needs to be renewed before the end of that period.

Landlord’s obligations with an HMO

The landlord needs to:

  • Give the tenants of the HMO his contact details if he needs to be reached in case of emergency.
  • Keep fire escape routes clear and fire warning systems in working order
  • Provide written tenancy agreements
  • Provide an adequate supply of water, drainage, electricity and gas.
  • Keep the property in good repair.
  • Provide adequate rubbish disposal means.

Changes to an HMO

The landlord needs to be aware of any changes of circumstance in the HMO such as:

  • The HMO licence allowance is breached by too many people living in the HMO
  • The HMO licence holder is no longer an appropriate person to hold it or the landlord wants to change the holder
  • The HMO is changed to single occupation (no longer an HMO)
  • The property is being sold as a result of the local council’s decision an HMO is no longer suitable

The landlord needs to inform the local council of any change of circumstances. If the landlord wants to change the conditions of the licence, he must apply to the local council by filling out a form (an additional fee might be payable) including the details of the proposed changes to licence’s conditions and the reason for the changes as well as an explanation how they will be made.

james Contact us for further help and guidance in this area. 

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