A HMO licence guide for landlords
What is an HMO?
HMO stands for “House in Multiple Occupation”. The term applies to any dwelling that is lived in by 3 or more people who are not of the same household. While buy-to-lets are rented out by a family unit who are all billed together, HMOs see individual tenants pay separately for their room and communal spaces are still under full ownership of the landlord.
The most obvious
example of an HMO is a house that is privately rented by several students. HMOs are
increasing in popularity across all age groups as it allows more affordable housing for tenants
while offering landlords the potential for higher rental yields.
What is a HMO licence and why does it exist?
In order to rent out your property as an HMO, a landlord needs to obtain an HMO licence for that property. HMO Licence laws are in place for two reasons:
To protect tenants from unscrupulous landlords from squeezing in as many tenants as possible into an “HMO”.To mitigate the extra potential risks that arise from a group of unrelated (and sometimes unfamiliar) living together.
The regulations that
need to be followed in order to attain the licence affect the size and
condition of the room rented out (bedrooms), the amenities provided in the
general living area, the condition of the property in general, and the
intentions of the landlord.
Renting out your
property without an HMO licence can see a landlord face a fine of up to £20,000
and potentially get a criminal record. They will also struggle to get a HMO
Licence in the future.
You apply for your HMO
licence through your local council.
Renting out your property without an HMO licence can see a landlord face a fine of up to £20,000 and potentially get a criminal record
What are the bedroom
requirements for an HMO?
One of the conditions
of an HMO licence is that bedrooms are of a minimum size. This is to stop
landlords from converting smaller rooms into “bedrooms” in order to add another
tenant to the property.
The minimum bedroom
sizes run as follows:
Single bedrooms have to be larger than 6.51m2Double bedrooms (rooms that are rented out to two people) have to be larger than 10.22m2Bedrooms occupied by someone under the age of 10 has to be larger than 4.64m2
In this case they are of the room refers to usable floor space that is floor space where the floor-to-ceiling height is over 1.5 metres. If a bedroom has a slanted ceiling it might be worth checking with a tape measure to see how much usable floor space there is.
What must a landlord
provide in the common areas of the building?
In order to obtain an HMO licence a landlord must provide “adequate washing and cooking facilities” to a tenant.
This is obviously
quite a vague statement, but it usually equates to one bathroom and toilet to
every four tenants, as well as having a hob, oven and refrigerator in the
kitchen.
HMOs also need to
have a waste disposal system outside the building that is collected on a
regular basis.
In order to obtain an HMO licence a landlord must provide “adequate washing and cooking facilities” to a tenant.
Health and safety
requirements that HMOs need to abide by include:
Having a smoke alarm in all common areas of the propertyHaving gas safety checks officially carried out every 12 monthsHaving electrical safety checks carried out by a professional every 5 yearsHaving a marked fire escape and a fire evacuation plan that is accessible to all tenants.
Making changes to
meet these regulations may affect the insurance
for your property
What are the specific
landlord requirements for an HMO Licence?
Landlords need to
pass a “fit and proper persons test” in order to obtain an HMO licence. This is
to try to prevent landlords from exploiting their tenants.
If you do not have a
criminal record then passing this test should be a formality. People with
criminal records may well not pass this test, particularly if their crimes are
related to making financial gains due to the exploitation of others (human
trafficking, for example).
Renewing your HMO
Licence
HMO licences need to
be renewed every 5 years. Renewal involves a comprehensive review of your
property by the local council to ensure that all regulations are met.
If your property
fails to meet specific regulations you will be given a time frame to make
adjustments in order to meet the requirements. If you fail to make these
changes you may lose your licence.
What insurance do you need?
A standard landlord policy will not suffice. You need to ensure that your schedule clearly states that you are HMO – Failing to do so will more than likely mean that any claims will be rejected should a claim arise. At Edison Ives Insurance Solution we have a number of competitive, specialist solutions for you.
To arrange the right insurance please contact us today and we will happily assist.
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