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Your HMO questions answered

The term ‘HMO’ stands for House of Multiple Occupation or House in Multiple Occupancy and has also been referred to as a ‘house share’.

A HMO is any property with the following combination(s) of tenants;

  • 3 or more tenants
  • with shared facilities like a bathroom or kitchen
  • Or more than 1 household

A household is defined as;

  • A single person, or several members of the same family who live together.
  • Each tenant from a separate family is classed as a separate household.

How is the term ‘family’ defined?

  • Married couples who live together
  • Two persons living together
  • Including couples in same sex relationships
  • Relatives or half relatives count as the same ‘family’. This includes; grandparents, step parents, aunts, uncles, siblings & step siblings.

If you are looking to rent out your property as a house in multiple occupation (HMO) in England or Wales you should contact your local authority to see what rules apply in your area.

You can check with Crawley Borough Council for information on HMO Licensing in West Sussex.

If your property has more than 5 rooms then your automatically required to have a licence regardless of the geographical area under new Government legislation.

A household, in relation to HMO, is defined as;

  • A single person, or several members of the same family who live together.
  • Each tenant from a separate family is classed as a separate household.

How is the term ‘family’ defined?

  • Married couples who live together
  • Two persons living together
  • Including couples in same sex relationships
  • Relatives or half relatives count as the same ‘family’. This includes; grandparents, step parents, aunts, uncles, siblings & step siblings.

To apply for a HMO licence you would need to contact your local authority. Before applying for any type of HMO licence you should first consider if your property meets the requirement levels that all HMO landlords need to meet.

Failure to comply with HMO licence conditions can result in prosecution.

The shortage in available affordable housing has seen a trend in landlords renting every available space to tenants desperate for affordable living accommodation. This brought about great risks with fire safety standards, overcrowding and poor inadequate shared facilities.

By introducing HMO licensing the Government and Local Authorities hope to raise standards in available affordable housing.

All Local Authorities must take the following factors in to consideration when deciding upon whether to grant a HMO licence:

  1. Is the property in question suitable for the number of tenants
  2. Is the Landlord a ‘fit and proper person’ to be managing a HMO.
  3. Are the shared facilities suitable for the number of tenants

It is worth noting that there are other factors that might be taken in to account when Local Authorities look to grant HMO licences. Every property is dealt with on a case by case basis.

It is a criminal offence to rent and manage a property as a HMO without a licence. This is subject to Section 72 of the Housing Act 2004.

If a Landlord is found guilty of running a HMO without a licence, he or she, can be fined up to £20,000 and can be made subject to a Rent Repayment Order which would demand the repayment of any rent received from the time they were notified that a licence was required.

A Local Authority will apply the rules of Section 66 of the Housing Act 2004 to determine if someone meets the requirements of a ‘Fit and Proper Person’.

A HMO Landlord must not have any of the convictions;

  1. Any offences of fraud
  2. Any offences related to dishonesty
  3. Offences of violence
  4. Drugs offences
  5. Unlawful discrimination in business
  6. Any contraventions of the housing law

HMO licences come with conditions attached to ensure that the standards set for HMO’s are continually maintained.

There are mandatory conditions that include;

  1. Annual Gas Safety certificates
  2. Electrical / appliance declarations
  3. Smoke alarm and fire regulations
  4. Tenancy agreements

There are also conditions relating to the shared facilities in any HMO, the general management of the building and it’s tenants behaviour.

A HMO licence generally lasts for a maximum period of 5 years. A Local Authority does reserve the right to grant a licence for a shorter period of time if it deems it necessary.

Furthermore, licences are not transferable and if you purchase a property that is already a licenced HMO, the new Landlord will need to apply for a new licence.

Every HMO property needs a individual licence so a person that owns and operates more then one HMO will need separate licences for each property.

If a landlord fails to continually meet the conditions of an HMO licence without reasonable explanation you can face fines of up to £5,000.

Serious breaches may also end with a licence being revoked permanently.

The Housing Health and Safety Rating System (HHSRS) replaced the former “fitness for human habitation” standard, as the new minimum standard for housing of multiple occupation.

The HHSRS is concerned with removing potential hazards in any building and it imposes duties on Local Authorities to take action in the most serious cases.

The Government has produced detailed guidance for both landlords and property managers to help them assess and eliminate the risks of such hazards.

For houses of multiple occupation (HMO’s) of up to 6 tenants planning permission is not required. But you may need to apply for change of use under permitted development law.

For properties with more than 6 tenants planning permission will is required.

The associated costs of converting a house in to an HMO will greatly vary dependant of numerous factors including;

  1. Extending a property to increase the number of rooms
  2. Loft, side, rear and wrap around extensions
  3. General building works
  4. Additional Bathrooms
  5. Additional Kitchens
  6. Fire safety implementations
  7. General decoration

View our case studies to get an idea of typical costs associated with converting a property in to an HMO.

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