HMO Licensing: What Is It?
HMO Licensing, enacted in 2006 through the Housing Act of 2004, is the legal system used in the UK, by a local authority or council, to prescribe standards of safety and amenity, and decide the suitability for occupation, of a licensable HMO property.
It is achieved throughout England & Wales by considering the maximum number of households or persons which can live at a property, by citing the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006, schedule 3.
In general, it provides standards such as:
- heating requirements.
- washing facilities.
- kitchens.
- units of living accommodation without shared basic amenity.
- to provide additional bathrooms or personal washing facilities.
- to provide kitchen facilities for the exclusive use of the occupant(s) of designated rooms.
With respect to licensing only, a property is a House in Multiple Occupation (HMO) if both of the following apply:
- at least three tenants live there, forming more than one household.
- you share toilet, bathroom or kitchen facilities with other tenants.
A property is deemed a large HMO if both of the following apply:
- at least five tenants live there, forming more than one household.
- you share toilet, bathroom or kitchen facilities with other tenants.
A household is either a single person or members of the same family who live together. A family includes people who are:
- married or living together – including people in same-sex relationships.
- relatives or half-relatives, for example, grandparents, aunts, uncles, siblings.
- step-parents and step-children.
Source Gov.Uk
Types of HMO Licensing Schemes: Mandatory & Additional
Mandatory Licensing
Mandatory is a scheme covering the whole of England and Wales.
An HMO is deemed to need a mandatory license if:
- It is occupied by 3 or more persons; or
- It is occupied by persons living in two or more separate households; and
- It meets:
- The standard test; or
- The self-contained test but is not a purpose-built flat situated in a block comprising 3 or more self-contained flats; or
- The converted buildings test.
Source Legislation.Gov.Uk
Additional Licensing
Additional licensing is a scheme covering some parts of England and Wales, where a local authority can impose a licence on other categories of HMOs in its area which are not subject to mandatory licensing.
The local authority can do this if it considers that a significant proportion of these HMOs are being managed sufficiently ineffectively so as to give rise to one or more particular problems, either for the occupants of the HMOs or for members of the public.
A HMO is deemed to need an additional license if:
- It is situated in an area the local authority has designated subject to additional licensing.
Do I Need An HMO License?
If the property meets any of the mandatory licensing criteria then Yes, you need the appropriate license to operate a house of multiple occupation (HMO).
If the property doesn’t meet the mandatory criteria it may still need an HMO licensed Property if it is located in an area of additional licensing.
Check with if your property meets these criteria by checking with your local council.
We have also created this handy flow chart to allow you to understand if you require an What Is A Hmo Licence.
HMO Licensing Flow Chart
Source: National Landlords Association
What happens if you don’t have an HMO License?
Any person operating a licensable HMO on or after 1 October 2018, requires a licence. Any person who fails to apply for the appropriate licence (or a temporary exemption) before 1 October will be committing a criminal offence.
Furthermore, the penalties for operating an unlicensed HMO property can include a prosecution brought by the local authority with unlimited fines imposed if found guilty or a financial penalty of up to £30,000.
Other penalties could include rent repayment orders brought by tenants or the local authority, and a prohibition on serving a valid section 21 notice to seek possession of the property. Repeat offenders may also be subject to banning orders and risk being placed on the rogue landlord database.
Can an HMO License be Revoked?
An HMO license can be revoked if the local council believes there are safety issues for the tenants, the HMO is not being run correctly or any laws and regulations are not being followed. If you’re not sure if you are adhering to an HMO licensed property, you should contact your local council to clarify and make changes where necessary.
Can an HMO License be Transferred?
An HMO license cannot be transferred from property to property. A license is only valid for a single property, not a person. So if you own multiple HMO’s, you must ensure you have correctly licensed each one.
Who can get an HMO License?
An unlicensed HMO is an HMO that meets the minimum criteria but does not meet the mandatory licensing criteria and selective licensing is not enforced. An unlicensed HMO is still an HMO, and the additional responsibilities must be followed.
HMO Legal Requirements & Regulations
One of the big challenges for HMO landlords is keeping on top of the legal requirements & regulation as they are updated all the time, and failure to comply with certain ones could result in prosecution. Disclaimer: always get professional legal advice if in doubt.
Many requirements and regulations are the same as those required for single let properties, and that’s because most UK tenancies, both for single let and HMO’s, are assured shorthold tenancies (ASTs), and those ASTs are Governed under the Housing Act 1988, Housing Act 2004.
HMOs do have some additional regulations to comply with, largely related to fire safety because some studies have shown that there are more safety aspects to be aware of when a group of unrelated people live together.
The extended AST regulations that apply to HMOs can be found in The Management of Houses in Multiple Occupation (England) Regulations 2006 (which I cover below).
For more information check out our full article on everything you need to know about HMO Rules, Regulation & Requirements.
What is an Unlicensed HMO?
HMO regulations state that for a person to obtain an HMO license, they must be ‘fit and proper’. Which means they cannot have broken any criminal laws, housing law or landlord and tenant law (i.e fraud, illegal eviction). The council must be satisfied with the managing person’s plans to run an HMO.
Fines For Not Having an HMO License Property
If you rent out an HMO property that isn’t licensed when it should be, the fine is up to £20,000. If you fail to comply with license conditions on your HMO, you can be fined up to £5000 per offence.
Exemptions to HMO Licensing
Certain types of properties are not classed as HMOs for the purpose of the Housing Act 2004 (other than for the Housing Health and Safety Rating System) and, as a result, are not subject to licencing.
A full list of exemptions is detailed in Schedule 14 of the Housing Act 2004 which was amended by Section 185 of the Localism Act 2011 to include co-operatives
These include;
- A two-person flat share – a property, or part of a property, lived in by no more than two “households” each of which consists of just one person. A property where the landlord and their household live with up to two tenants.
- A property where the landlord and their household live with up to two tenants.
- Buildings that are occupied entirely by freeholders or long leaseholders.
- Buildings owned or managed by a public body (such as the NHS or police), a local housing authority, or a registered social landlord.
- A building where the residential accommodation is ancillary to the main use of the building, for example, religious buildings, conference centres, etc. Buildings that are already regulated (and where the description of the building is specified in regulations), such as care homes, bail hostels, etc. Domestic refugees are not exempt.
- Buildings that are already regulated (and where the description of the building is specified in regulations), such as care homes, bail hostels, etc. Domestic refugees are not exempt.
- Certain buildings that are controlled or managed by a cooperative society.
To be absolutely sure we recommend you seek definitive advice either from your local authority directly or from a professional licensing services provider in our suppliers’ directory.
How To Get An HMO Licence
Each local planning authority or council has its own different forms and procedures for making an HMO licence application.
Understand the Local Authorities Requirements
To find out who your local planning authority or council is, go to our page on HMO Licensing by LPA.
The details of the application process and the standards that the local authority is required to consider when granting a licence are set out in sections 63-68 Housing Act 2004 and the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006.
Most application forms are available through the local authority’s website. Once the form is completed it should be returned with the appropriate fee. If an application is made and it transpires that the property is not actually a licensable HMO then the licence application fee is fully refundable. Once an application is duly made then no offence for operating an unlicensed HMO can be committed.
Assess The Property
You can now survey the property to understand the current layout, room sizes, amenities and points of compliance that are required in order to determine the works that may need to be addressed.
Identify the Works Required
Now you understand the local authority requirements and have also carried out a survey, you can now identify the differences between them. This will allow you to generate a schedule of works to bring the property up to current licensable standard.
Apply For The Licence
At this point now that you understand the works required, we recommend you apply for the HMO licence. Sometimes councils have lengthy waiting times for HMO licensing applications and so we find it beneficial to get this part of the process done without delay, rather than after the works have been completed.
Complete the works
Here you complete all necessary works required to bring the property up to current HMO licensing standards.
Obtain an HMO Licence
That’s it, assuming all being well, you should be in receipt (after a wait from the local authority), of a new HMO Licence. Typically they last for 5 years and are not transferrable.
If you wish to gain some independent help with HMO licensing then you can check out our other content on HMO licensing or see the HMO directory to find an HMO Licensing company to help guide you through the licensing process or even do it all for you.