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Hot Topic Highlight - New HMO Licensing Requirements



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What is today's blog about?


This week, we are going to look at new mandatory licensing requirements for Housing in Multiple Occupation (HMOs). Essential reading for AssocRICS and RICS APC candidates.


You can also listen to our CPD podcast on Anchor for more free AssocRICS and RICS APC training and support.


What is a HMO?


A House in Multiple Occupation, or HMO, falls under the umbrella of the Private Rented Sector. They are just that, i.e. a residential building occupied by people who do not form a single household and where facilities are shared. 


The concept was defined by the Housing Act 2004, although there have been various amendments to this since. We will discuss the latest of these in this article.


What is a household?


The Housing Act 2004 defines a household as members of the same family living together. This could include a couple (whether living together, married or civilly partnered) or relatives living together, e.g. parents, grandparents, children, step-children, grandchildren, siblings, uncles, aunts, nephews, nieces, cousins, foster children and half-relatives.


What responsibilities do HMO landlords have?


Landlords of HMOs have additional responsibilities towards their occupiers. In brief, this includes ensuring adequate fire safety measures (including working smoke alarms), carrying out gas safety checks, checking electrical safely on a 5 yearly basis, avoiding overcrowding, ensuring sufficient facilities and ensuring that shared facilities are clean and in good repair.


Why are some HMOs licensed?


The aim of licensing is to ensure that HMOs provide safe and habitable living conditions for occupiers. This is particularly important where multiple people live together who do not form part of a single household.


HMO licensing is split into three categories; mandatory, additional and selective.


Mandatory licensing relates to HMOs of a certain size, which we will discuss later on in this article.


Additional licensing relates to the requirements of a specific local authority, whereas selective licensing relates to the requirements of a specific local authority for all rental properties, irrespective of their HMO status. 


The HMO licence must be displayed within the common areas of the property, together with the contact details for the landlord or their managing agent.


What changes have been brought in?


As of 1 October 2018, changes were made in relation to minimum room sizes and mandatory licensing for HMOs in England.


What is defined as a HMO for licensing purposes as of 1 October 2018?


Mandatory licensing is now required for all multi-occupied properties where there are five or more people, forming two or more separate households. An example of the implications of this is that many shared student houses will have become HMOs.


Previously, this definition also included a requirement for the property to comprise three or more storeys. This element has been removed from the HMO definition in relation to mandatory licensing.


What happens to existing licences?


If a HMO licence is already held under the current definition, then this will continue to be valid until the expiration date (i.e. 5 years from being issued). If a HMO is currently let which did not previously require a licence, then a licence will be required as of 1 October 2018.


However, we understand that a maximum 18 month grace period may be permitted by local authorities after a breach of licensing is notified to the licence holder.


Are there any exceptions?


Yes, one of which relates to purpose-built blocks of flats comprising 3 or more units.


What changes were made to minimum room sizes?


Where a HMO requires a mandatory licence, amended minimum room sizes apply. This prohibits landlords from letting a room below 6.51 sq m to a single adult and 10.22 sq m to a room shared by two adults. It also prohibits rooms under 4.64 sq m being used for sleeping. This excludes floor areas under 1.5m in head height. 


The HMO licence must also state the maximum number of people who can occupy each specific bedroom in a property, together with minimum requirements for bins and waste storage facilities.


What happens if a landlord breaches the requirements?


Landlords will not be able to let rooms that fall below the new standards. The penalties for a breach of licence conditions include prosecution and civil penalties (up to £30,000 under the Housing and Planning Act 2016).


A landlord who does not have a licence is also restricted from using the Section 21 procedure to obtain possession under an Assured Shorthold Tenancy (AST).


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Stay tuned for our next blog post to help build a better you


N.b. Nothing in this article constitutes legal or financial advice.