HMO Licensing - What's it all about?
HMO properties require a licence and every Local Authority has different rules. This means that sometimes it is tricky to ensure your client has obtained the correct licensing for their HMO.
There has been a political will in recent times, to improve the standard of private rented accommodation and it’s important for landlords to understand and obtain licensing if it is applicable to their property. Failure to do so can involve financial penalties for landlords.
What is an HMO? – Standard Definition.
The definition of an HMO is a ‘House of Multiple Occupation’ with three or more tenants forming more than one household. As an example, three students living together as individuals would be classed as an HMO.
However, just because a property is an HMO, doesn’t always mean it has to be licenced.
When is a licence required?
- A Mandatory HMO Licence is required where you rent a property which has five or more tenants forming two or more households sharing facilities such as kitchens and bathrooms. An example of this would be five working professionals sharing a property.
- However, any HMO that doesn’t fall under the mandatory licence scheme may need an Additional Licence. If your property is an HMO with three – four sharers and falls within a Local Authority which has introduced this scheme, then it will most likely require an additional licence. The reason for this is because many areas are seeing growing changes in housing occupation from families to sharers.
- The third type of licence is the Selective Licence. Selective licensing schemes apply to any let property in areas or streets chosen by the local authority, regardless of the way they are tenanted. In areas where selective licensing applies, landlords must apply for a licence if they want to rent out a property. This means the council can check whether they are a “fit and proper person” to be a landlord, as well as making other stipulations concerning the management of the property and ensuring they have the appropriate safety measures in place.
Top tips and questions to ask your landlord clients
- Ask your landlord how he intends to or currently lets his property.
- Ask your landlord if he has a current licence or if he believes that his property needs one.
- Review the licencing rules on the Local Authority website to see which, if any, of the three licences apply.
If you have a HMO case that you are looking to place with us and need some help then call our broker hotline on 0345 148 9086 to speak with one of our Business Development Managers.