HMO Mandatory & Additional Licences
There is a lot said about HMO Licences, what you need to have, what you should have and when you need them… To compound the confusion, people often mistake planning for licensing too! Let’s look at the whole picture, in an attempt to demystify and clarify any confusion.
Firstly, we are going to look at Mandatory HMO Licences, what they are and what do you need to do?
The Regulations:
The Housing Act 2014 states that a house in multiple occupation (HMO) is a property rented out by 3 or more people from 2 or more households, who share facilities such as a kitchen and/or a bathroom.
Requirements & Duties:
If you want to rent your property as a house in multiple occupation, in England or Wales, you must contact your local council to check not only if you require a licence but any specific requirements that your council have stipulated. While there are national minimum standards for HMOs, each council has the power to set their own rules when it comes to increasing standards, within their jurisdiction.
You MUST obtain an HMO Licence if you rent out a “large HMO”, which is defined as:
– A property rented to 5 or more people from more than 1 household;
– A property where some or all tenants share toilet, bathroom or kitchen facilities;
– A property where at least 1 tenant pays rent (or their employer pays it for them).
Restrictions & Conditions:
Licences are valid for a maximum of 5 years and you must renew them BEFORE they expire.
You must ensure:
– The house is suitable for the number of occupants (this depends on its size and facilities)
– The manager of the house – you or an agent – must pass a “fit and proper” person test, they must have no criminal record or have breached any landlord laws/code of practice.
A full list of the licence criteria can be found on the council website.
For Bristol see here – For South Glos see here – For North Somerset see here
You must also:
– Send the council an updated gas safety certificate every year;
– Install and maintain an appropriate fire safety system, this will vary property to property;
– Provide safety certificates for all electrical appliances when requested;
– Ensure that all other local council requirements are met (fire exits, room sizes, emergency lighting etc.)
In addition to mandatory licences, any council, at their own discretion, can apply additional licensing to an area of their choosing. If they do this then you will need an additional licence for a “small HMO” of 3-4 people from 2+ households. HMOs that require an additional licence will need to follow the licence criteria as laid out on the council website, for the appropriate number of people.
The additional licensing areas will be outlined by a map which is also available on the council website. As of December 2021, Bristol Council have an additional licensing area, which covers a large part of the city, but South Gloucester & North Somerset do not.
If the HMO is then tenanted by 5 people, it will require a mandatory licence, the additional licence is no longer sufficient. This will mean you have to pay 2 sets of fees. My advice would be to know how many people you want to rent your HMO to before you submit the licence. If you have rooms that can be rented to couples but are currently single occupancy, then go with the higher number.
You can get an unlimited fine for renting out an unlicensed HMO and be required to pay back the last 12months rent
In the eyes of the council, there is no excuse for not licencing an HMO and the rent repayment orders can be very expensive, in September 2021 the council fined a landlord £48,000… not only that but if you have your `fit and proper person` status revoked, all of your HMO licences will be taken away, which could be very destructive for your portfolio!
Make sure to take the time to read through and understand the licence criteria for your property, if you are not sure then please fill out our contact form and we will talk you through the specifics.
If we can add value for you, with a truly passive property management solution, finding your next perfect tenant or you want to talk about compliance in your property, then give us a call on 0117 440 6789 or email us here
