News article published on: 25th March 2019
The image of numerous families and households living within one property is one which is more readily associated with the slum areas of Victorian London. However, this type of accommodation is a reality in modern day London and is evidenced by the fact that the government took steps to regulate ‘Houses in Multiple Occupation’ (HMO) in the Housing Act 2004.
If you let a property, particularly if it is a large house that has been converted into separate units, then you need to consider whether it is an HMO as you may be required to obtain a licence The Housing Act 2004 introduced measures which apply to both licensable and non licensable HMOs.
WHAT IS AN HMO?
There is no simple definition of a HMO contained within the Housing Act 2004.
There are three tests which the property in question will be subjected to:
a) the standard test;
b) the self-contained flat test; and
c) the converted building test
If the property satisfies one of the three tests then it is likely to be a HMO. Further, if a local authority makes a declaration that the property is a HMO believing one of the tests apply to it then it can also be an HMO. There are other circumstances when a property may be an HMO. For instance if in a converted block of flats the building work to convert to flats does not comply with the relevant building regulations or where less than two thirds of the flats within a converted building are owner occupied then the property may be an HMO. There are certain properties which are exempt from the HMO regulatory scheme, for example properties where the landlord is resident.
WHAT IF A PROPERTY IS AN HMO?
If a property is an HMO then it may be that it is required to be licensed by the local authority. Licensing is mandatory where the HMO has three or more storeys and is occupied by five or more persons forming two or more households. The local authority for the area may also impose additional licensing requirements on HMOs which do not fall within the scope of mandatory licensing
WHO IS RESPONSIBLE FOR APPLYING FOR A LICENCE?
It is the landlord’s responsibility to apply for a licence. The licensing process is fairly rigorous. The landlord needs to show that he is a ‘fit and proper person’ to manage the HMO. A local authority will usually inspect the property to determine that there are no health and safety hazards and to consider whether there are appropriate facilities at the property for the number of people occupying it. A local authority may serve improvement notices on a landlord and any licence may be subject to conditions that the landlord must comply with. In the most extreme circumstances a local authority can take over the management of the HMO where they have serious concerns regarding the property.
WHAT IF YOU FAIL TO OBTAIN A LICENCE?
Failure to obtain a licence where required can prevent a landlord seeking possession against any assured shorthold tenants who may reside within the HMO. It is an offence not to obtain a Licence where one is required and conviction for this offence can carry a fine of up to £20,000.
Helen Bogie is an assistant solicitor at Osbornes specialising in property litigation work acting for both tenants and landlords.