Houses in multiple occupation

Many buy-to-let investors purchase property for rent by a number of people – these are known as 'Houses in Multiple Occupation' (HMOs). The government website states that:

'An HMO is a property rented out by at least three people who are not from one 'household' (for example a family) but share facilities like the bathroom and kitchen. It's sometimes called a 'house share'.'

These are particularly popular in university towns. A property owner who wants to rent out a property as an HMO in England or Wales must obtain a licence from the local authority. A property is defined as a 'large HMO' if all of the following apply:

• it is rented to five or more people who form more than one household
• some or all tenants share toilet, bathroom or kitchen facilities
• at least one tenant pays rent (or their employer pays it for them).

Even if the property is smaller and rented to fewer people, it may still be necessary to obtain a licence. A licence is valid for five years which must be renewed before it runs out. A property owner will need a separate licence for each HMO that they run. The owner must ensure that:

• the house is suitable for the number of occupants (this depends on its size and facilities)
• the manager of the house (the owner or an agent) is considered to be 'fit and proper', for example they have no criminal record or breach of landlord laws or code of practice
• an updated gas safety certificate is sent to the council every year
• smoke alarms are installed and maintained
• safety certificates for all electrical appliances are provided when requested.

Importantly, each local authority has different requirements and the council may add conditions to an HMO licence, for example to improve the standard of the facilities.

It is reported that Haringey council is proposing to impose stronger requirements on owners of HMOs in its locality. This is because the local authority wants to beef up its enforcement powers. It has served around 60 warnings on HMO owners who rented out unlicensed premises.

It is thus important for anyone wanting to buy an HMO to take specialist legal advice from a lawyer who knows the HMO requirements in their area. It could be money well spent as a property owner who rents out an unlicensed HMO could receive an unlimited fine.

To discuss this or any other property matter, contact us.