Burnetts logo

Residential landlords - Does your HMO require a licence?

Residential landlords - Does your HMO require a licence?

Residential landlords can face an unlimited fine for renting a House in Multiple Occupation (HMO) without a licence. Rebecca Joy explains where a licence may be required and landlords' obligations.

Where you manage or have control over a House in Multiple Occupation (HMO) that requires a licence from the local council, you could get an unlimited fine for renting it out without having one in place. You may also find that when you come to mortgage or refinance your HMO, the solicitor acting for the Bank will not proceed unless you produce a copy of the licence to them.

These are good reasons for making sure you get an application into your local council sooner rather than later if your property needs an HMO licence.

That said, the legislation governing HMO licences is very complex and it is not always clear if a licence is needed. Even if a property is classed as an HMO, it might not actually need a licence.

If you are unsure as to whether you property needs a licence, you should always take legal advice and check with the council, but the following questions form a useful starting point:

  1. (a) Is the property rented out to at least 3 people who are from more than 1 household or family?
    (b) Do these people share facilities like a kitchen, toilet or bathroom?

    If the answer to both of these questions is YES then the property is likely to be an HMO.
     
  2. (a) Is the HMO rented to at least 5 people who are from more than 1 household or family?
    (b) Do these people share facilities like a kitchen, toilet or bathroom?
    (c) Is the HMO at least 3 storeys high?

    If the answer to all 3 of these questions is YES then the property is likely to require an HMO licence.

To further complicate matters, individual local councils have the power to extend the regime so that properties to which you would give a NO answer to any of the 5 questions above do in fact require a licence. It is always best to check with your local council (even if you think no licence is required). 

If a licence is needed, as a minimum, the council will expect you to:

  • make sure that the property is suitable for the number of people who are occupying it;
  • make sure that the manager of the house is ‘fit and proper’ i.e. has not breached any relevant code and does not have a criminal record;
  • send them annual gas safety certificates;
  • ensure that the property has an adequate number of smoke alarms and maintain them; and
  • when requested provide safety certificates for electrical appliances

As a licence is only valid for a period of 5 years maximum you must ensure that these are always renewed before they run out to avoid incurring an unlimited fine. 

Therefore it is extremely important that you obtain, comply with and renew an HMO licence where the law requires that you hold this for your property. You should not, however, confuse this requirement with that of ensuring that your property has adequate planning permission for use as an HMO. This is an entirely different area of law and needs to be considered separately.

If you have any queries or concerns regarding HMO licences or planning matters then please contact Rebecca Joy in our Property Team who will be happy to advise you on your individual circumstances. She can be contacted on 0191 594 6908 or rjj@burnetts.co.uk.

About the author

Rebecca Joy profile photo

Rebecca Joy

Rebecca Joy is a Solicitor in Burnetts' specialist Banking team based in Newcastle.

Published: Wednesday 24th May 2017
Categorised: Residential Conveyancing, Legal Services in Newcastle, Penrith, West Cumbria

All Factsheets