HMO Licensing Reform:
The October 1 deadline for the new rules on mandatory licensing is approaching soon, when many existing landlords in England will be drawn into the mandatory HMO licensing net.
These guidelines apply primarily to England. Other regions and jurisdictions are similar but there may be important differences. This is not a definitive interpretation of the law, every case is different and only a court can decide. If in doubt seek expert advice.
Currently only those HMO properties with three or more storeys, and shared by five or more persons from two or more households are included. They must also be sharing facilities such as kitchens and bathrooms.
Failure to register with the local authority when offering these types of facility will land the landlord (or agent responsible for management) in serious trouble – there are severe penalties including criminal convictions for breaching the rules.
From the 1st of October 2018 the “three or more storeys” criteria in England will go. This means that all those landlords housing multiple occupants – five or more people in two or more households sharing facilities – regardless of the configuration of the property – will need to have a mandatory HMO licence.
Purpose built flats within a block comprising three or more self-contained flats are excluded, and there are also some Statutory Exemptions:
- Any property occupied by just two people who form two households;
- Buildings managed by a local housing authority, registered social landlord, police or fire & rescue authority or a health service body;
- Buildings already regulated under certain other statutory provisions (Schedule 1 to SI 2006 Number 373)
- Certain student halls of residence;
- Buildings occupied principally for the purposes of a religious community whose principle occupation is prayer, contemplation, education or the relief of suffering; and
- Buildings owner occupied with no more than two lodgers.
Many landlords and agents will be unaware of the coming changes as there has been little publicity in the media about them and no government awareness campaign.
When a rental property is unlicensed, whether this is a mandatory HMO license or if the property comes under a local authority additional licensing scheme, a valid Section 21 notice cannot be served.
Landlords with properties falling into this HMO category, and there are said to be many thousands affected, if they have not done so already, should be making arrangements to have them licensed now – there will be no grace period.
Basically, an HMO is any property (house or flat) occupied by three or more people comprising two or more households who share facilities (kitchen, bathroom and/or toilet), even when they occupy the property on a single tenancy.
With these properties the HMO “Management of Houses in Multiple Occupation (England) Regulations 2006” apply, but they do not necessarily need a mandatory licence unless the circumstances above apply.
There are three types of property licensing schemes operating in England:
- Mandatory HMO licensing
- Additional licensing
- Selective licensing
Whereas mandatory HMO licensing applies when required throughout England, additional and selective licensing schemes only apply in certain areas, where the local authority has implemented such a scheme.
Landlords and agents should always check with their local authority, where the rental property is based, to see if there is a scheme in operation, as it will have serious implications for letting a property.
Houses in Multiple Occupation and residential property licensing reform – see here
The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 – see here