HMOs Headache for Landlords


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The change in law relating to houses in multiple occupation (HMOs) has caused much concern amongst landlords. HMOs are houses or flats which were originally designed to be occupied by one household but are now occupied by two or more households. Some HMOs are registrable and may only be operated by a person holding a license that has been issued by the local authority. It is this mandatory requirement to be licensed which has caused consternation.

The owner of an HMO must obtain a licence to run a property which:

  • consists of three or more storeys;
  • is occupied by two or more households; and
  • has more than five people occupying the building.

The following count as storeys:

  • shops or offices on the ground floor;
  • residential basements; and
  • loft conversions.

The following count as single households:

  • husband and wife, or a couple living together as man and wife;
  • single sex couples living in a relationship equivalent to man and wife;
  • people related to and living with a couple, e.g. Mr A and Miss B living as man and wife with Mr A’s daughter and Miss B’s sister; and
  • a number of people living together who are all related to each other e.g. three sisters and a child of one of the sisters.

People who are not related and do not live together as a couple are not part of a single household. For example, a three-storey house shared by five student chums will now be an HMO requiring mandatory licensing.

In addition to the types of HMO subject to mandatory licensing, a local authority can require other types of HMO to be licensed. This may occur where a local authority believes the rented accommodation in an area is particularly poorly run. More often, however, it will occur where a local authority ran an HMO registration scheme prior to 6 April and is allowed by the legislation to continue to operate a transitional scheme until 6 April 2009. Amongst the London boroughs, for example, Brent requires all HMOs irrespective of numbers of storeys to be licensed except those occupied by only two households, or those occupied by two people plus the landlord and his family. Ealing is even stricter, requiring all HMOs to be licensed except those occupied by the landlord and his family and two additional people. This would require registration by a flat owner who shared the flat with three friends.

What does registration entail?

  • a separate application must be made for each HMO;
  • licences are not transferable so a new licence must be applied for when an HMO is acquired even if the seller has a licence;
  • the applicant must be a fit and proper person. Landlords or managers guilty of criminal offences or who are known to have harassed tenants are unlikely to be acceptable;
  • the HMO must have sufficient facilities for the number of occupants;
  • the HMO must have adequate fire precautions; and
  • there must be proper management procedures in place. Can the tenants get in touch with the landlord or manager in an emergency? Are repairs undertaken promptly?

The local authority can issue a conditional licence if the landlord is fit and proper but, for example, additional fire/smoke alarms need fitting and the landlord is given a stated period in which to satisfy the conditions.

If a licence is refused and the conditions in the HMO are refused, the local authority must serve an Interim Management Order which requires the local authority to take over the management of the HMO. At the end of 12 months if the problems have not been resolved the local authority may issue a Final Management Order.

What happens if I do not obtain a licence?

  • this is a criminal offence and the landlord can be fined up to £20,000;
  • the landlord cannot obtain court orders to gain possession of premises from assured shorthold tenants i.e. the court will not assist a criminal landlord;
  • the tenants may be able to reclaim rent paid from their landlord.

Can I evict a tenant in order to avoid registration (i.e. to bring the number of occupants below the registration limit)?

A threat to evict occupiers in order to avoid registration may be seen by a local authority as a threat to the health and safety of the tenants and could trigger the service of an Interim Management Order. However, proper proceedings to recover possession will not trigger an Interim Order. If you are taking steps to ensure that your HMO will not be mandatorily licensable you may apply for a “Temporary Exemption Order”, which will last for three months and in exceptional circumstances may be renewed for up to three months further. This will ensure you are not criminally liable during that period but you will be obliged to prove to the local authority that active steps are being taken, i.e. notices have been served or possession proceedings instituted.

The local authority is entitled to set and charge a fee. This will vary from borough to borough. In Kensington and Chelsea, for example, the fee varies between £1,000 and £1,300 depending on the size of the property and the number of the visits to be made. A licence lasts for five years.

Landlords who were previously registered under a local authority HMO registration scheme are unlikely to have anything to fear. Landlords should take immediate steps to apply for registration if they have not already done so and parents thinking of buying a house for a student child to share should avoid Brent and Ealing!

For further information, please contact:

Amanda Hado-Bodfield, Partner, Fladgate LLP (ahado-bodfield@fladgate.com)

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