Do I Need an HMO Licence?
Your Essential Guide to Compliance
Welcome to the world of HMO licensing, where the landscape can be complex and the stakes high. In this guide, we’ll unravel the essentials of HMO compliance, allowing you to assess your need to obtain a licence and providing an overview of the process. It is important to know the rules surrounding HMO licensing to determine if your property needs to be licensed.
HMO, or House in Multiple Occupation, isn’t just a term; it’s a legal framework designed to ensure tenant safety and property standards. We’ll delve into what classifies a property as an HMO and why it’s crucial for landlords to grasp these definitions.
Types of HMO Licence
Breaking down the types of HMO licensing is key. From property size and occupancy thresholds to specific conditions triggering the need for a licence, HMO landlords need clarity on the parameters.
There are four types of licences under the umbrella of HMO licensing.
Mandatory Licence
A Mandatory HMO licence covers five or more occupants forming two or more households in a shared house or flat. This type of licensing applies throughout the UK with certain exemptions in place, as we will later explore
Additional Licence
An Additional HMO licence covers 3-4 occupants forming two or more households in a shared house or flat. Unlike Mandatory licensing which is required throughout the country, it is the council who decides if Additional licensing will be enforced in the borough. Therefore, Additional licensing is not always applicable. The licensing requirements are relatively similar to Mandatory licensing.
Selective Licence
When a Selective licence is required, it can apply to all rented properties in the area designated by the council, unless Additional or Mandatory licensing apply. Even if the property is only occupied by one household or one person, a Selective licence would be required if the property falls under a designated area.
Section 257 Licence
A Section 257 licence applies to a building which has been converted into self-contained flats and does not comply with the appropriate building standards. The self-contained units must be less than two-thirds owner occupied.
Exceptions and Exemptions
Not every property falls under the same licensing requirements. Properties that meet the criteria below might not need an HMO licence:
• managed or controlled by private registered providers of social housing, a co-operative society, local authorities and other specified public sector bodies
• buildings regulated under other legislation, for example boarding schools, prisons, accommodation centres for asylum seekers and care homes
• occupied by religious communities, unless they are section 257 HMOs
• halls of residence (or other accommodation occupied by students) that are managed or controlled by one of the educational establishments listed in the regulations
• only occupied by an owner/occupier, members of their household and no more than two tenants or licensees. This exemption does not apply to section 257 HMOs
• only occupied by two people who form two households
• properties subject to a temporary exemption notice or an interim management order
Temporary Exemption Notice
A Temporary Exemption Notice (TEN) can be requested from the council to allow you to operate without a licence for up to 3 months while changes are being made in the property to ensure property compliance. To issue a TEN, the council will require proof of the compliance actions being taken.
Consequences of Non-Compliance:
The repercussions of operating without the requisite HMO license can be severe. Here, we detail the potential penalties landlords could incur due to non-compliance.
Unlimited Fines:
Failure to obtain a proper license for a HMO, or permitting occupancy by a greater number of individuals or households than permitted by the license, constitutes an offense under section 72 of the Housing Act 2004. The individual in control or managing such a property may be issued a financial penalty notice of up to £30,000 or face an unlimited fine. Moreover, breaching any restrictions or obligations outlined in the license can result in fines of an unlimited nature for each condition violated, along with the potential revocation of the license.
Rent Repayment:
Tenants dwelling in unlicensed HMOs retain the right to seek rent repayment for a period of up to 12 months, contingent upon the duration of their tenancy. Notably, recent legal proceedings saw a group of five students successfully pursuing litigation against their landlord, reclaiming £15,000 in rent payments owed due to the landlord’s failure to obtain proper HMO licensing.
The Application Process
For landlords ready to take the compliance leap, we’ve got a step-by-step guide on the HMO licence application process. From required documentation to associated fees, we’ll ensure landlords are well-prepared.
Our streamlined compliance process begins with a thorough survey, offered free within the M25 area and remotely outside, providing landlords with comprehensive compliance information tailored to their property’s needs. Following the survey, our dedicated team offers an integrated compliance service, quoting for all necessary work under HMO specialist supervision to ensure adherence to regulatory standards. We also handle the application process on behalf of landlords, managing correspondence and potential delays with the council, providing end-to-end support for a hassle-free experience in obtaining HMO licensing compliance.
As you reflect on the key points discussed, consider the weight of compliance on your property investment. To make this process seamless, our dedicated service is here to guide you through every step of securing your HMO licence. Don’t let compliance be a headache—invest in our expertise and make your journey to hassle-free HMO licensing a reality.