As a landlord, you might well have heard the term HMO mentioned by your letting agent, but what exactly is HMO and what are the implications for the private landlord?
HMO (or Houses in Multiple Occupation) has a specific meaning in terms of the legislation that applies to it. A property is considered to be in multiple occupation if the following conditions are met:
- At least three tenants live there
- More than one household exists at the property
- There are shared toilet, bathroom or kitchen facilities Additionally it is deemed to be a “Large HMO” if:
- It is more than three storeys high
- At least five tenants live there
(A “household” is either a single person or members of the same family who live together. It includes people who are married or living together and people in same-sex relationships.)
A HMO landlord must be licenced in respect of each HMO property with licences valid for five years.
Certain reasonable minimum standards must be met in order to fulfill the obligations of the licence, including:
- Confirmation that the property is suitable for the number of tenants in occupation (eg size and facilities)
- There must be a “manager” appointed – either yourself or your agent, who must be considered a fit person, eg no criminal record or breach of landlord laws or other criteria.
- You must send an updated gas certificate to the council every year.
- You must install and maintain smoke alarms
- Provide safety certificates for all electrical appliances when requested.
Interpreting what is regarded as “reasonable” and understanding the time limits involved and other aspects of HMO can be quite complex, with fines of up to £20,000 if you get it wrong. And yes…they DO impose them, as a recent case in Birmingham proved with fines and tenant compensation totaling over £180,000. Even one electrical appliance not tested can result in a £1,000 fine.
We specialize in HMOs so if you have any question as to how to get the most out of this lucrative but complex niche market please don’t hesitate to contact us and we’d be happy to advise.