If you own or are considering investing in HMO property, there are a number of regulations and other factors that you need to consider. Depending on where the premises are located, as well as the number of separate households within that property, it may be necessary to apply for an HMO licence and you will need to meet the necessary HMO regulations before you can rent the property out.
Although different councils have different requirements regarding licencing, typically driven by whether they have applied for an Article 4 Directive, there are certain regulations that must be met.
What Is An HMO?
A house of multiple occupation is a single property that consists of at least three households. A property with three or four households is considered a small HMO, while properties with five or more households are large HMOs. While each household will have at least their own bedroom, an HMO has shared spaces like kitchens and bathrooms, although some modern HMOs offer en-suite rooms while some living room or dining room space may also be shared.
Certain types of property, such as purpose built flats, do not qualify as HMO property. Those that are owned and operated as care housing, and other types of property may also be exempt. Read a more in-depth HMO definition to help you determine whether the property you are considering is an HMO or not.
Small And Large HMOs
A lot of councils do not require that you have an HMO licence for a small HMO, but some do. A small HMO is one with three or four households contained within a single building. Any less than three households means that the property is not an HMO, while any more than four means that it is a large HMO.
If a council has applied for an Article 4 Directive then they can demand that landlords have a small HMO licence. If they have not applied for this legal directive then HMO rules dictate that there is no need to acquire a licence. In all council areas, you do need an HMO licence for a large HMO property, and the rules are different in Scotland.
As well as having a minimum of five households living in a property, a large HMO is defined as having three storeys or more. Whatever region the property is in, if your property falls in this bracket then you need to apply for an HMO licence from the local council. Research your local council and their HMO regulations to see whether you need a licence. There is a fee for HMO licences, and this will vary according to the council where the property is located.
If you rent out a property and do not have the appropriate HMO licence, you could be subject to a large financial penalty. You may also be required to convert the property back to a single-let property. You can use a letting agent, like OHPI, to make the application for your HMO licence on your behalf. You need to choose a reliable and reputable letting agent, because they will determine your HMO requirements, whether you need a licence, and they will help ensure that you meet all of the necessary requirements.
Different Councils Mean Different Rules
Different councils and different regions have different rules as well as different fees. Speak to the planning officer or the planning office at your local council. They will be able to help you determine exactly what’s needed and they will give you details of HMO licence pricing, as well as the regulations that you will need in order to be granted the licence.
HMO Licence Scotland
It is worth noting that Scotland has different requirements. An HMO licence in Scotland is required if there are three or more separate families living in a single property, if the residents use the premises as their main premises, and also if two or more properties share the same facilities. There are no stipulations regarding property size or the number of floors, and there is no differentiation between a small or large HMO. This means that, regardless of the size of a property, you must get a licence if you wish to rent it out in this way.
In Scotland, the maximum fine for renting out property without a licence is £50,000, and the local council must consider whether the person renting out the property is considered suitable, whether the property itself is suitable, and as well as being able to accept or deny a licence, they can also add conditions to the licence. For example, if there is a minor change required to the layout of the property, then a conditional licence may be administered which dictates that those changes must be made in order for the licence to be considered applicable.
There are HMO regulations that must be met, regardless of the size or location of the property. The applicant should be considered fit and suitable, which means that those with a criminal record are likely to have an application declined. The property itself must also be fit for purpose, and it must provide adequate space and facilities for all tenants living in that property. As the landlord you must provide the council with copies of an annual gas safety check certificate, ensure that smoke alarms are fitted and work, and you must provide electrical safety certificates for appliances as and when requested to do so.
If you meet these requirements you should be granted an HMO license. You may also receive a conditional licence, which means that you have to make any changes or meet any conditions that are listed on the licence.
At OHPI, we can help you find a suitable HMO property. We can manage the renovation and changes that are needed to convert property into an HMO, and we can deal with all aspects of HMO property management on your behalf. Contact us today and we can help ensure that you meet HMO requirements to improve your chances of acceptance. We will even apply to your local council for you.