The landlord’s guide to the new HMO licensing rules

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In September 2018, the rules around HMOs and HMO licensing changed. And because of the risks involved in not having an HMO license – including massive fines- it’s crucial that landlords understand the new regulations! 

So, to start…

What is an HMO? 

In the past, key to a property being defined as an HMO was that it had to have three or more stories. However, with the new definition of an HMO, this no longer matters. Today, a property is a HMO if:

  • at least 3 tenants live there, forming more than 1 household AND 
  • tenants share toilet, bathroom or kitchen facilities.

However, not all HMOs need licenses. It is properties classified as ‘large HMOs’ that need a Mandatory HMO License. Large HMOs are properties where:

  • at least 5 tenants live there, forming more than 1 household AND
  • tenants share toilet, bathroom or kitchen facilities. 

The HMO license

For all properties that meet this criteria, landlords must apply for an HMO license by the date that the property becomes license-able. The license helps councils crack-down on rogue landlords and the renting of unsafe properties. 

However, it’s not always just large HMOs that need licenses. Local authorities also have the power to impose Additional HMO Licensing on other types of HMOs too. Some properties can also even be exempt from needing an HMO license. 

This means it is important for landlords to check with the council whether or not they need a license. 

If a license is needed, the landlord, or an agent working on their behalf, must apply to the council, and pay the fee they have set for the process. Once granted ,the license is valid for a maximum of 5 years. 

Risks of unlicensed HMOs

Failure to apply for a license for a license-able HMO makes landlords liable to a large number of sanctions.

  • Landlords can be prosecuted and fined up to £20,000.
  • Landlords may be ordered to repay up to 12 months’ rent.

There are many examples of times when landlords have failed to license their HMOs and have suffered the consequences. In Saxilby, Lincolnshire, a Landlord was fined £16,500 for operating an unlicensed HMO that had no fire doors and a substandard fire alarm. A landlord in the midlands was similarly prosecuted by his local council for having an unlicensed HMO. He hadn’t realised that because of an additional licensing designation by his local council, the property was license-able.

In summary, as a landlord it is very important to understand if your property requires an HMO license. If it does, you must take the steps to apply for a license, as if you don’t, you could face huge fines.

Ultimately though, you’re not alone if you find the whole HMO thing daunting! That’s where companies like Rentalist and it’s sister company Co&Co can help. They can help you submit your HMO license application by helping you understand requirements, complete paperwork and solve problems. They can therefore make the whole process much more stress and hassle free!

For more tips that could make your life as a landlord easier, click here

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