Nikka Sulton

As a landlord, if your property is a house in multiple occupation (HMO) accommodating five or more people from two or more households, obtaining a mandatory HMO license is essential.

The application can be completed online or through the provided HMO license application form.

Before applying, it’s crucial to familiarize yourself with and understand the guidelines to ensure a smooth and compliant licensing process.

What is an HMO?

An HMO is classified based on the following criteria:

Occupancy: It must have a minimum of three tenants from different households.
Shared Facilities: The property should provide shared kitchen, bathroom, and toilet facilities.

In terms of household definition:

An individual living alone is considered a household.
Family members residing together form a household.
Couples in marriage, cohabitation, or same-sex relationships are also regarded as a single household.

What makes HMOs different to other rental properties?

HMOs can accommodate many people, with local authorities emphasizing safety. Tenant complaints are promptly addressed, and non-compliant landlords may face prosecution or council management takeover.

Additionally, running an HMO may necessitate obtaining a license for compliance with regulations.

Pros And Cons Of HMOs

When deciding whether to rent out your property as an HMO or opt for a standard buy-to-let, it’s essential to consider the pros and cons for HMO landlords:

Pros of HMOs

Typically, you’ll generate higher profits by renting your property as an HMO.
Even if one tenant fails to pay their rent, you may still have income from others.
Evicting a tenant is often more straightforward, especially if you reside in the property.

Cons of HMOs

HMOs often experience higher tenant turnover, which means more time spent on tenant search.
There may be increased paperwork and administrative tasks, such as acquiring an HMO license and planning permissions.
HMO landlords are usually responsible for covering bills and council tax.

At what point do you require an HMO license?

There are two types of HMOs: mandatory and additional.

1. Mandatory HMOs, defined as single properties with 5 or more tenants, necessitate a local council license.

2. Additional HMOs may require a license based on local rules, considering storeys and occupants.

Compliance with HMO regulations, outlined in the Management of Houses in Multiple Occupation Regulations (2006) under the Housing Act 2004, is crucial for tenant safety and well-being. Non-compliance can lead to fines, legal consequences, and potential imprisonment.

Do I need an HMO licence for 3 tenants?

If your property accommodates three or four tenants, you won’t need a mandatory HMO license. Still, a local authority license may be necessary, depending on your council’s HMO criteria. Exemptions, such as family occupancy or purpose-built flats, could apply.

We’ve gathered information from London boroughs, accurate at the time of writing. However, it’s vital to check with your local council to ascertain your property’s specific licensing requirements.

If your property has three or four unrelated occupants, it’s legally an HMO. While not requiring a Mandatory HMO License, it might still need a license. Councils often have “Additional HMO Licensing” schemes, so check with your local council. Compliance with the Housing Act 2004’s regulations is crucial, ensuring proper management and tenant safety. Familiarize yourself with these rules for responsible property management.

BOROUGH	NUMBER OF TENANTS
Barnet	3
Bexley	5
Brent	3
Bromley	5
Camden	3
Croydon	3
Ealing	3
Enfield	3
Greenwich	5
Hackney	3
Hammersmith and Fulham	3
Haringey	3
Harrow	3
Havering	3
Hillingdon	5
Hounslow	3
Islington	3
Kensington and Chelsea	3
Kingston upon Thames	3
Lambeth	3
Lewisham	3
Merton	5
Newham	3
Redbridge	3
Richmond upon Thames	5
Southwark	5
Sutton	3
Tower Hamlets	3
Waltham Forest	3
Wandsworth	5
Westminster	3

Landlord responsibilities when managing an HMO

Landlords of HMOs must prioritize safety and compliance. Key aspects to manage include:

Gas safety – annual checks required.
Electrical safety – checks every five years.
Fire safety – install and maintain smoke and carbon monoxide alarms.
Provide rubbish disposal facilities.
Ensure functioning cooking, cleaning, and washing facilities.
Keep communal areas clear and clean.
Address overcrowding concerns.

HMO fines and do you need an HMO licence?

To rent out your property as an HMO in England or Wales, contact your council to determine if a licence is required. Generally, large HMOs need licences unless they qualify for an exemption. Licences are valid for up to 5 years and must be renewed. Each HMO you own requires a separate licence.

You must have a licence for large HMOs if:

It’s rented to 5 or more people from different households.
Some or all tenants share bathroom, toilet, or kitchen facilities.
At least 1 tenant pays rent.

Ensure HMO compliance, including preventing overcrowding and providing adequate facilities. You’re responsible for communal area repairs.

Penalties vary by council and may include:

Prosecution with unlimited fines.
Rent repayment orders, allowing tenants to reclaim up to 12 months’ rent.
Management orders, enabling the council to take over HMO management.

When Does a Property Require an HMO Licence?

To determine if an HMO license is needed for your property, consider the following checklist:

The property accommodates five or more tenants from two or more unrelated households.
Tenants share facilities like a kitchen or bathroom.

Keep in mind new licence conditions, specifying minimum bedroom sizes:

At least 4.64m2 for a child under ten.
At least 6.51m2 for a single person over ten.
At least 10.22m2 for two people sharing.

Ensure the property has these safety certificates:

GSC Gas Safety Certificate.
EPC Energy Performance Certificate.
At least one smoke alarm on each habitable floor.
Carbon monoxide detectors in rooms with solid fuel-burning appliances.

There are 3 types of property licensing:

Mandatory licensing of large HMOs, additional licensing, and selective licensing.

1. Mandatory Licensing

Mandatory licensing applies nationwide to HMOs with five or more occupants from two or more households. Starting on October 1st, this definition will change, requiring single-story flats and two-story maisonettes with five or more occupants to obtain a mandatory license. New conditions will set national minimum room sizes for sleeping accommodation, and landlords must follow local refuse schemes.

2. Additional Licensing

Some councils introduce additional licensing policies, extending licensing requirements to other sizes of HMOs beyond the mandatory ones. This means all HMOs in that area must be licensed.

3. Selective Licensing

Selective licensing is at the discretion of the borough and can apply to all rental properties in a given area. For example, a council may implement compulsory licensing for all residential rental properties on a specific street.

Before granting a license, the local authority must ensure that the property owner and any managing agent are fit and proper to hold a license and that the property meets the required physical standards.