If you are a landlord
and are renting your property to several different unrelated tenants, you probably already know that the legal responsibilities can get quite complicated. In this situation, the home is usually classified as a House in Multiple Occupation – or an HMO.
Renting your property out in this way can often make a lot of sense. You will be able to rent each bedroom of a multiple-bedroom house separately to individual tenants, without having to worry about renting the entire house. However, in this situation you will need to follow a strict set of procedures that are related to health and safety. Failure to do so could mean that you may experience fines of up to £20,000.
It is important to be aware of the legal responsibilities that come with renting out your home in this way, so that you can avoid any potential difficulties.
Understanding how an HMO works
An HMO is a property where tenants that are not related to each other share facilities, such as a kitchen, bathroom, toilet or hand basin. This might include a household that consists of three or more unrelated tenants, or tenants that have separate rental agreements. Also this can apply if the property is a bedsit or a hotel or if students live at the property.
Your home could also be considered an HMO if you live at the property and rent rooms to tenants. However, the classifications can be confusing so if you are not sure you should check with the council to see if your property counts as an HMO.
Do HMO landlords need a licence?
Is it necessary to have a licence when you are operating an HMO? This depends on the type of property, as well as the specific rules of your council and how it is occupied. There are two types of HMO licensing, additional and mandatory. Those who own a certain type of property will need to apply for an HMO licence, such as if your property has five or more unrelated tenants within two or more households or three or more storeys.
However in some situations the council can impose additional licensing if they believe that significant numbers of these multiple occupant homes are not being run properly in the district. This might mean that you will need to apply for a licence even though your particular property doesn’t meet the requirements. To find out whether you need a licence or not, you should contact your local council.
How the licence works
When you successfully obtain an HMO licence, it will last for a maximum of five years. After that, you must renew the certification before it runs out. If you have more than one property, you will need to apply for a separate licence for each one.
Usually the council will want to perform an inspection of your property so that they can make sure there are not any serious health and safety hazards. Make sure that you do follow through on this procedure, because if you do not apply for the licence you could be subject to a fine of up to £20,000.
Other important factors
What are the other important factors that you will need to consider as the landlord of an HMO?
If you fail to ensure that your property is up to safety standards, this could result in criminal prosecution. Also if the council determines that your property is not being run in a safe way, it could take over management of the company.
Don’t forget to consider smoke detectors in the communal areas and the bedrooms and to set up fire extinguishers and escape routes. You will also need to make annual gas checks and make sure that the electrical systems are examined every five years.
There is a limit to the amount of people who can live in an HMO, because the facilities will need to be adequate. The council will have a ratio to determine the number of people who will be able to comfortably share a facility. For example, if your property has a shared kitchen you might not be able to rent to more than five people. Allowing more people to occupy the property might subject you to a fine.
These are just a few of the important things that you should know if you are a landlord who is renting out an HMO property, so that you can run your property safely and legally.