Houses in multiple occupation, or HMOs, are a common form of rental property in the UK.
Landlords with HMOs have additional legal responsibilities that must be fulfilled. So what are HMOs, and what are the responsibilities of landlords with houses in multiple occupation?
A property is likely to be an HMO if its tenants are three or more people living in more than one household, and the tenants share a toilet, bathroom, or kitchen facilities.
For the purposes of HMOs, a household is considered to be a single person, or members of the same family living in the same property. So, for example, three unrelated people in three rooms would make up three households, while a property with two couples would make up two households.
HMOs can take many forms. They're often a shared property where the tenants aren't related to each other, or a house split into several rooms. Shared student accommodation may also be HMOs, along with hostels. For a property to be considered an HMO, rent must be paid, and it must be the occupants’ main residence.
There is a separate category of property known as a large HMO. A property is a large HMO if it has at least five tenants forming more than one household, and the tenants share toilet, bathroom, or kitchen facilities.
Regardless of the type of property, you must fulfill all the normal landlords’ legal responsibilities.
However, landlords of HMOs have a number of additional legal responsibilities. They must:
It’s important to note that these obligations are legally binding whatever the contents of the tenancy agreement.
All large HMOs must be licenced. So, if your property is let to five or more unrelated tenants, and has shared tenant facilities, you must apply for an HMO licence.
There used to be an extra requirement for a property to be classed as a large HMO – it needed to have three storeys. But from 1 October 2018, this was dropped, so it's important to make sure you've checked whether your property is classed as a large HMO under the new rules.
Some councils require that all HMOs are licensed. Licenses will specify the maximum number of people that can occupy the property.
You should also remember that some councils require all landlords to be registered, regardless of whether or not their properties are HMOs. If you’re in doubt, check with your local council before proceeding.
You should apply for an HMO licence through your local council. Individual councils will set the terms of the licence. You can apply yourself, or you can ask your managing agent to do it on your behalf.
The landlord must inform a number of different parties when applying for a licence, and you must also pass on the details of these people to the council. They are:
You can find out where to apply for your HMO licence here.
The cost of an HMO licence is set by individual councils. It is normally charged as a fee for applying, and will be non-refundable regardless of whether or not the licence is granted.
HMO licences normally last for a period of five years, but will not last longer than this. At least once during that period, the council is obliged to inspect the property to make sure that it does not have any health and safety hazards.
If you are the landlord of an HMO which should be licensed but is not, you are committing a criminal offence and could be fined up to £20,000. In addition, you could be ordered to repay up to 12 months’ rent or, if the tenants are in receipt of housing benefit, you could be ordered to repay 12 months’ housing benefit to the council.
If you break the terms of your licence, you could be fined up to £5,000. If you break the terms by renting to more tenants than are allowed for in the licence, you could be fined up to £20,000.
In addition, it’s important to understand that if your HMO is not properly licensed, you may not be able to evict tenants. In the case of an assured shorthold tenancy, a section 21 notice will not be valid if an HMO is not licensed when it should be.
Let us know about your experience with renting HMO properties in the comments.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
21 June 2016 • 3-minute read
Landlords and tenants each have their own specific set of responsibilities, and it’s important to make sure that you know who is expected to…
19 August 2016 • 1-minute read
As the start of the new university year looms, many parents will be asking if it makes financial sense to buy a property to help with their…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.