If you are a landlord and are renting your property to
several different unrelated tenants, you probably already know that the legal
responsibilities can get quite complicated. In this situation, the home is
usually classified as a House in Multiple Occupation – or an HMO.
Renting your property out in this way can often make a lot
of sense. You will be able to rent each bedroom of a multiple-bedroom house
separately to individual tenants, without having to worry about renting the
entire house. However, in this situation you will need to follow a strict set
of procedures that are related to health and safety. Failure to do so could
mean that you may experience fines of up to £20,000.
It is important to be aware of the legal responsibilities
that come with renting out your home in this way, so that you can avoid any
potential difficulties.
Understanding how an HMO works
An HMO is a property where tenants that are not related to
each other share facilities, such as a kitchen, bathroom, toilet or hand basin.
This might include a household that consists of three or more unrelated
tenants, or tenants that have separate rental agreements. Also this can apply
if the property is a bedsit or a hotel or if students live at the property.
Your home could also be considered an HMO if you live at the
property and rent rooms to tenants. However, the classifications can be
confusing so if you are not sure you should check with the council to see if
your property counts as an HMO.
Do HMO landlords need a licence?
Is it necessary to have a licence when you are operating an
HMO? This depends on the type of property, as well as the specific rules of
your council and how it is occupied. There are two types of HMO licensing,
additional and mandatory. Those who own a certain type of property will need to
apply for an HMO licence, such as if your property has five or more unrelated
tenants within two or more households or three or more storeys.
However in some situations the council can impose additional
licensing if they believe that significant numbers of these multiple occupant
homes are not being run properly in the district. This might mean that you will
need to apply for a licence even though your particular property doesn’t meet
the requirements. To find out whether you need a licence or not, you should
contact your local council.
How the licence works
When you successfully obtain an HMO licence, it will last
for a maximum of five years. After that, you must renew the certification
before it runs out. If you have more than one property, you will need to apply
for a separate licence for each one.
Usually the council will want to perform an inspection of
your property so that they can make sure there are not any serious health and
safety hazards. Make sure that you do follow through on this procedure, because
if you do not apply for the licence you could be subject to a fine of up to
£20,000.
Other important factors
What are the other important factors that you will need to
consider as the landlord of an HMO?
Safety Regulations
If you fail to ensure that your property is up to safety
standards, this could result in criminal prosecution. Also if the council
determines that your property is not being run in a safe way, it could take
over management of the company.
Fire Safety
Don’t forget to consider smoke detectors in the communal
areas and the bedrooms and to set up fire extinguishers and escape routes. You
will also need to make annual gas checks and make sure that the electrical
systems are examined every five years.
Overcrowding
There is a limit to the amount of people who can live in an
HMO, because the facilities will need to be adequate. The council will have a
ratio to determine the number of people who will be able to comfortably share a
facility. For example, if your property has a shared kitchen you might not be
able to rent to more than five people. Allowing more people to occupy the
property might subject you to a fine.
These are just a few of the important things that you should
know if you are a landlord who is renting out an HMO property, so that you can
run your property safely and legally.
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