Understanding the Complexities of HMOs and Licensing

Understanding the Complexities of HMOs and Licensing

The Government first introduced The Mandatory Licensing in 2006 as part of their commitment to improve the standards in the private rented sector, with the aim to raise the bench mark of poor quality and badly managed properties.

The Mandatory HMO Scheme originally only applied to properties that were three or more storeys and that were occupied by five or more people making up two or more separate households; however, from 1 October 2018 the scope of mandatory licensable HMOs was broadened to now include buildings with one or two storeys. Smaller HMOs have also been introduced into the scheme, changing the definition of a mandatory licensable HMO.

What is a HMO?

A property is defined as a House in Multiple Occupation (HMO) if both of the following apply:

  • at least 3 tenants live there, forming more than 1 household and occupying the property as their only or main residence.
  • they share toilet, bathroom or kitchen facilities with other tenants.

A property is defined as a Large House in Multiple Occupation (HMO) if both of the following apply:

  • at least 5 tenants live there, forming more than 1 household and occupying the property as their only or main residence.
  • they share toilet, bathroom or kitchen facilities with other tenants.

 (A household is either a single person or members of the same family who live together as their only or main residence. A family includes people who are married or living together - including people in same-sex relationships; relatives or half-relatives, for example grandparents, aunts, uncles, siblings, step-parents and step-children).

What is a HMO Mandatory License?

If a property meets the definition of a large HMO, regardless of the number of storeys, a Mandatory License is needed and if granted, will be valid for a maximum of 5 years.

Most application forms are available through the Local Authorities’ websites, along with the cost information, and the form must be completed and returned to them with the appropriate fee.

Local housing authorities are under a duty to grant the licence if they are satisfied with certain conditions. (i.e. suitable for occupation, the license holder is a fit and proper person, etc.):

What are the Additional Licenses and Selective Licenses?

Not only do Large HMOs require a License but each Council also has the power to introduce Additional Licensing or Selective Licensing under Part II of the Housing Act 2004; as there is no central directory of property Licensing Schemes, it is vital to Check with the Local Council to confirm whether a Selective or Additional license is required.

Whether or not you need a licence will also depend on exactly how the Council has drafted the Scheme Designation. Some schemes might cover the whole Borough whereas others might only cover smaller geographical areas.

The law states that any decision to implement a selective or additional licensing scheme must be consistent with the Council’s Housing strategy and must be part of a coordinated approach for dealing with homelessness, empty homes and anti-social behaviour.

Additional Licensing applies to certain Houses in Multiple Occupation (HMOs) that fall outside the scope of the mandatory HMO licensing scheme; this applies to an entire house or flat which is let to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet.

There are some Statutory exemptions which mean a property might not need an additional licence (e.g. if the property is managed by the Council or Police Authority, etc.).

Selective Licensing criteria varies by the Local Authority. There is a designated area covered by the Selective Licensing scheme, but each Council has their own definition and requirements of a Selective License. It can apply to any residential property depending on the number of occupants and households.

A local housing authority may impose conditions relating to the management, use and occupation of a licensed HMO. It is mandatory for the local housing authority to include certain conditions which relate to the provision of smoke and carbon monoxide alarms, gas safety and the safety of electrical appliances and furniture.

The new Mandatory Conditions Regulations 2018 introduce the National minimum Sleeping Room Sizes and Waste Disposal Provision requirements.

The National Minimum Sleeping Room Sizes:

The minimum sleeping room floor area sizes are:

  • 4.64 m2 for one child under the age of 10 years (if less than 4.64 m2 may not be used as sleeping accommodation)
  • 6.51 m2 for one person over 10 years of age
  • 10.22 m2 for two persons over 10 years

(the above do not apply to certain charities providing temporary accommodation)

The purpose of this condition is to reduce overcrowding in smaller HMOs, and the standards are designed to ensure consistency of approach on minimum room sizes used for sleeping within HMOs, and so gives certainty to landlords, tenants and local authorities on the absolute minimum standards that are acceptable.

The new minimum room size conditions apply and include HMOs that are required to be licensed under additional licensing provisions as well as the mandatory licensing regime.

From 1 October 2018, local authorities are also required to impose a mandatory condition concerning the provision of suitable Refuse Storage Facilities for HMOs. Local authorities are aware that HMOs, occupied by separate and multiple households, generate more waste and rubbish than single family homes.

Some local authorities have already made specific provision under their function as the local waste authority for landlords of HMOs to ensure there are appropriate facilities for storing rubbish their properties generate.

A landlord who fails to apply for the appropriate licence (or a temporary exemption) will be committing a Criminal Offence. The penalties for operating an unlicensed HMO can include a prosecution brought by the local authority with unlimited fines imposed if found guilty or a financial penalty of up to £30,0000. Other penalties include rent repayment orders brought by tenants or the local authority and a prohibition on serving a valid section 21 notice to seek possession of the property. Repeat offenders may also be subject to banning orders and risk being placed on the rogue landlord database.


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