What Is a House in Multiple Occupation (HMO)?
Essentially, a House in Multiple Occupation or HMOis commonly defined as an entire residential property (flat or house) that is rented to at least three tenants who form more thanone household, with shared facilities. The following arrangements qualify as Houses of Multiple Occupation:
- An entire house or flat that has been let out to three or more individual tenants, who form more than one household and who share the same kitchen, bathroom, or WC.
- A house that has been converted into other non-self-contained accommodation and that has been let out to three or more tenants who form more than one household and share the same kitchen, bathroom, or WC. A self-contained unit of accommodation is one which has a kitchen or cooking area, bathroom, and WC inside it for the exclusive use of the household living within the unit.
- A converted house containing one or more flats that are not wholly self-contained and which is occupied by 3 or more tenants who form more than one household.
What is a Large HMO?
A large House in Multiple Occupation is where all of the following apply:
- Five or more tenants live in the property
- More than one household
- Tenants share facilities, such as bathroom, kitchen, and WC
As a landlord, you must meet certain standards for large HMOs.
Do I Need an HMO License?
For a property to be classified as a HMO, it must be used by the tenants as their only or main residence. Properties that are let to students and refugees will be treated as their only or main residence.
You will need to apply for a HMO licence if your property falls into any of the above categories. Unless you’re a fire officer or have experience preparing properties for HMO licensing, you must contact your local council and speak to the Environmental Health or Housing Officer, who will advise you accordingly. Every council have their own guidelines for HMO compliance, so the final answer will depend on the size and location of your property. It is advisable to call the council straight away ahead of buying a property that a landlord may be thinking of converting to HMO usage.
In England and Wales, you will need a HMO licence if your property complies with any of the following:
- Has three stories or more (including shops, usable basements, or attics).
- Is occupied by five or more people (all ages)
- Those tenants form more than one household
- The tenants share the kitchen, bathroom, or toilet
If the above applies to you and you don’t have a licence, then you should contact your local council as you are most certainly breaking the law. You will avoid any neighbour or tenant reporting you and costing you up to £20,000 plus recoverable rent.
Applying for a HMO licence may look like a lot of work. However, you will find the process much easier than expected. Once you have gone through the process once, you will find it much easier for any subsequent properties that you purchase.
Is My Student Let an HMO?
This will entirely depend on the number of students you have living in your property, and the way they will be living.
In the case of student lets, if you have three or more households living in your property and sharing facilities, it will be classed as an HMO. It can take up to two months to get your HMO licence, so it is convenient to start the process early and in time.
Tests to Verify your HMO Property
There are several tests to verify whether a property is HMO or not. The most popular court case is known as the Barnes vs. Sheffield Council (1995), which provides 9 useful questions to consider:
- Did the people in the property move in together as a single group, or did they move in separately?
- Which facilities do the tenants share?
- Which parts of the property are the tenants responsible for? The whole house or just their rooms?
- Can or do the tenants lock other tenants out of certain parts of the property?
- How is a replacement tenant found if/when people move out? Who is responsible for finding the replacement tenants?
- How are the rooms allocated?
- What is the size of the property?
- Are the tenants a stable group?
- What is the style of living? Is it communal?
The Housing Act 2004 introduced a number of complex tests to set out the meaning of HMO:
- Standard Test
- Self-contained flat test
- Converted building test
- HMO declaration in force
- Converted block of flats
It also clarifies certain exceptions to HMOs, including:
- Buildings that are controlled or managed by public sector bodies
- Student accommodation controlled or managed by the educational establishment
- Properties used by religious communities
- Properties occupied by owners
- Properties occupied by two people.
There are also a number of standards that the Housing Act 1985 specifies for the HMOs. The local authorities have the power to control the HMOs, and in certain parts of the country the HMO licensing, governed by the local authorities, is in place.
Tips for HMO Landlords
Managing a small or large HMO is far more complex than standard lettings of properties. Therefore, you will have more responsibilities and you should not enter into it without first taking professional advice. Below are some points to keep consideration if you have a HMO license.
- As a landlord, it is your responsibility and not the tenants’ to have control of all common areas of a HMO. This includes the hall, stairs, landing, kitchen, bath/shower rooms, and the garden.
- It is the landlord’s duty to ensure there are clear rules relating to the tenants’ use of the common areas. You must check the property frequently to ensure these rules are followed. It is recommended to have clear rules set out in the tenancy agreement and in the kitchen as a reminder.
- It is also the landlord’s responsibility to keep the common areas clean and free of food hazards. Again, rules for this should be laid out in the tenancy agreement. You may have to consider contracting a cleaner to visit the property at certain periods and carry out cleaning to all common areas.
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