Introduction
Renting a property as a House in Multiple Occupation (HMO) rather than a single let can provide landlords with a higher rental income by allowing individual rooms to be rented out separately. This approach also reduces the impact of vacancies when multiple tenants are involved. Additionally, HMOs often attract consistent demand from demographics like students or young professionals. However, managing an HMO can be more complex due to higher tenant turnover, increased maintenance issues, and stricter regulatory requirements.
What is an HMO Property
An HMO, or House in Multiple Occupation, in the UK is a property rented out by at least three people who are not from one 'household' (for example a family) but share facilities like the bathroom and kitchen. An HMO is sometimes called a 'shared house'. These are some examples of HMOs:
- Shared Houses: These are properties where each individual or couple has their own bedroom, but they share communal areas like the kitchen, bathroom, and living room. This is common amongst students and young professionals.
- Bedsits: In a building of bedsits, each room will typically be a combined bedroom and living area, with a small kitchenette. Bathrooms may be shared among multiple bedsits.
- Hostels: These are often HMOs, as they involve multiple unrelated people sharing amenities.
Which Legislation Applies To HMOs?
HMOs are governed by several pieces of UK legislation. The key legislation includes:
1. The Housing Act 2004: This Act introduced a new definition of an HMO and provides for mandatory licensing of large HMOs. It also has provisions for additional and selective licensing schemes for other private rented properties in certain circumstances. It sets out standards for management of HMOs and enforcement options for non-compliance.
2. The Management of Houses in Multiple Occupation (England) Regulations 2006: These Regulations provide detailed guidance on the management duties in relation to HMOs. These include duties to ensure that fire alarms and extinguishers are kept in good working order, that common areas and shared amenities are kept clean and safe, and that adequate cooking and washing facilities are provided for the number of occupants.
3. The Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2018: This legislation amended the definition of a licensable HMO in England to include all properties with five or more people, forming two or more separate households, regardless of the number of storeys in the property. The legislation also provides for minimum bedroom sizes.
- For one person: The room must be no smaller than 6.51 square metres
- For two people: The room must be no smaller than 10.22 square metres
4. Local authorities can also have additional licensing schemes under the Housing Act 2004. These schemes can require other categories of HMOs, not covered by mandatory licensing, to be licensed. The schemes are intended to address the impact of poor property conditions, migration, high levels of deprivation or high levels of crime in the area.
It's essential to remember that the legislation around HMOs can vary slightly between England, Wales, Scotland, and Northern Ireland, as housing policy is a devolved matter.
What Are The Landlord’s Legal Responsibilities Regarding HMOs?
The legal responsibilities of landlords regarding Houses in Multiple Occupation (HMOs) are outlined in the Housing Act 2004 and various regulations. Here are some key responsibilities specifically applicable to HMO landlords:
1. Licensing: In most cases, landlords must obtain a mandatory licence from the local housing authority if their HMO meets the licensing criteria. Some local authorities may have additional licensing requirements, so it's important to check with the specific authority where the property is located.
2. Safety Standards: Landlords are responsible for meeting certain safety standards in HMOs. These include providing adequate fire safety measures, such as fire alarms, fire extinguishers, and fire doors. Escape routes must be clear and unobstructed, and periodic fire safety checks must be conducted. HMOs with five or more occupants typically require an annual fire risk assessment.
3. Amenities and Facilities: Landlords must provide suitable and sufficient amenities and facilities in HMOs. This includes ensuring an adequate number of toilets, washbasins, and cooking and food storage facilities to accommodate the number of occupants. Bathing facilities may need to be provided, although specific requirements can vary by local authority.
4. Health and Hygiene: Landlords are responsible for maintaining the HMO in a clean and hygienic condition. This involves regular cleaning of common areas and providing proper waste disposal facilities. Adequate ventilation and heating must be provided to ensure the comfort and well-being of tenants.
5. Repairs and Maintenance: Landlords must keep the HMO in good repair and working order. This includes addressing structural issues, maintaining utilities, and promptly resolving any maintenance problems that may arise. Tenants should be provided with contact details for reporting repairs.
7. Tenant Safety Information: Landlords must provide tenants with a written statement containing essential safety information about the HMO. This includes details on how to operate and maintain fire safety measures, emergency contact information, and any specific rules or restrictions regarding the property.
8. Management and Conduct: Landlords must manage the HMO in a responsible manner. This includes maintaining appropriate records and documents related to the management of the property, complying with relevant health and safety legislation, and responding to any complaints or issues raised by tenants.
It's important to note that the regulations and requirements for HMO landlords in the UK can vary between different local authorities. It is advisable to consult the specific regulations and guidelines of the local housing authority where the HMO is located to ensure compliance with the local requirements.
What Are The Penalties For Not Having An HMO Licence?
Operating an HMO (House in Multiple Occupation) without a licence can have significant penalties. Here are some potential legal consequences:
1. Fines: The landlord may receive a fine, known as a civil penalty, of up to £30,000 for operating an HMO without a licence. In serious cases, landlords can be prosecuted by the local council, where there's no cap on the fine and there's potential for a criminal record.
2. Repayment of Rent: The tenants or the local council (if it has paid housing benefit or housing costs under Universal Credit) can apply to the First-tier Tribunal for a Rent Repayment Order (RRO). This could mean that a landlord has to repay up to 12 months' rent. An RRO can be made if the landlord is convicted of running an unlicensed HMO, or even if not convicted, it's proven beyond reasonable doubt that the offence was committed.
3. Restrictions on Property Rights: A landlord who is convicted may be subject to a banning order, prohibiting them from renting out property in the future. The local council can also enforce a management order, which allows the council to take over the management of the property while still leaving it in the ownership of the landlord.
4. Criminal Record: If a landlord is prosecuted and convicted, they will have a criminal record, which may affect future letting activities and other areas of life.
Remember that the precise penalties and enforcement measures can vary, so it's important to check with your local council or a legal advisor.