HMO Licensing

What does HMO stand for?

HMO stands for House in Multiple Occupation. It is also known as a ‘house share’.

What is an HMO?

An HMO is defined as a property that is let to 3 or more people from 2 or more households.

How many people can live in an HMO?

It should be proportionate to the number of rooms available, the shared facilities available and any occupancy restrictions placed by your local council. You must avoid overcrowding your HMO, which could negatively affect the living conditions of those that live there.

Should I rent my HMO by room or as a whole house?

You can rent your property on a room only basis or as a whole property which is shared by a group. The choice is really dependent on the type of tenant you are looking for, professional sharers may move often and prefer the flexibility or a room let, whilst students generally rent as a group of 4 or more people.

What are the pros and cons of renting my HMO as a whole house?

Pros
- The group is legally recognised as 1 tenant, known as joint and severally liable, which makes it easier if deposit deductions are needed for damages
- If one tenant leaves, the remaining members of the group are still responsible for the full rent amount
- The group usually already knows each other, or may have lived with each other, which means less chance of clashes

Cons
- If one tenant wants to move out, it could be more difficult to replace them by finding a single tenant to join a group already living together
- You will need to provide an EPC
- You can be excluded from all common parts
- You may receive less rent than if you rented by room

Whats an HMO license?

An HMO license is issued by a local council, in order for them to have details of who is managing the HMO, how it will be run how many people live there. There is mandatory and selective licensing for HMOs, or you may not need a license at all.

Do I need an HMO license?

If you meet the mandatory licensing criteria below, you will need to apply for a license. - 5 or more people from 2 or more households - The tenants share amenities like a kitchen, bathroom or toilet

What is an unlicensed HMO?

An unlicensed HMO is an HMO that meets the minimum criteria, but does not meet the mandatory licensing criteria and selective licensing is not enforced. An unlicensed HMO is still an HMO, and the additional responsibilities must be followed.

Who can get an HMO license?

HMO regulations state that for a person to obtain an HMO license, they must be ‘fit and proper’. Which means they cannot have broken any criminal laws, housing law or landlord and tenant law (i.e fraud, illegal eviction). The council must be satisfied with the managing persons plans to run an HMO.

Can you buy an HMO license?

You cannot buy an HMO license without first submitting an application the your local council to apply. You must be deemed a ‘fit and proper’ person and the property must satisfy the HMO regulations.

Can an HMO license be revoked?

An HMO license can be revoked if the local council believes there are safety issues for the tenants, the HMO is not being run correctly or any laws and regulations are not being followed. If you’re not sure if you are adhering to an HMO license, you should contact your local council to clarify and make changes where necessary.

Can an HMO license be transferred?

An HMO license cannot be transferred from property to property. A license is only valid for a single property, not a person. So if you own multiple HMOs, you must ensure you have correctly licensed each one.

How much is the fine for not having an HMO license?

If you rent out an HMO property that isn’t licensed when it should be, the fine is up to £20,000. If you fail to comply with license conditions on your HMO, you can be fined up to £5000 per offence.

What are the room size requirements for an HMO?

Technically there isn’t a room size requirement for HMOs but under Part 10 of the Housing Act 1985, overcrowding standards are enforced. This sets a minimum room size of 6.5 square metres for adults. A local authority may make exceptions dependent on the number of rooms available and the size of shared facilities.

How much does it cost to run an HMO?

You will need to consider these costs of running an HMO: - HMO license Fee
- Gas Safe Engineers’ Certificate Fees
- Electrical Installation Condition Report dated with last five years Fee
- Periodic Fire Alarm Test Certificate Fee
- Periodic Emergency Lighting Test Certificate Fees
- Fire Risk Assessment Fess
- Periodic Appliance Test Certificate
- A Basic Disclosure and Barring Service (DBS) check (which the local authority use as part of their Fit and Proper Person check)
- Paperwork fees

What type of tenancy agreement do I need for an HMO?

You will most likely use an AST, Assured Shorthold Tenancy agreement, for an HMO. You can use an AST for individuals or a group. If you have a lodger, you may use a lodgers agreement instead of an AST.

Are HMOs profitable?

HMOs can be very profitable because you can charger a rent per room that totals more than if you let the property to one household. For example, you could rent a 3 bed property for £1000 per month to a family, or as 3 rooms for £400 each giving a total of £1200.

What are the HMO regulations?

The HMO regulations are listed below, and apply to all HMOs regardless of whether they are subject to mandatory or selective licensing:
- Provide the property managers details to the tenants and clearly display within the property
- Ensure all fire escapes are clear and fire safety measures are in place relevant to the number of occupiers
- Maintain adequate water supply and drainage
- Keep electric and gas installations in a safe working order
- Carry out an electrical inspection at least every 5 years
- Provide gas and electrical certificates within 7 days of a request from the local authority
- Keep all common parts in safe and working order
- Provide adequate facilities for waste disposal

Do I need an EPC for my HMO?

If you let the house as a whole on one tenancy agreement, you will need to provide a copy of the EPC to the tenants before they move in.

Do HMOs need a Fire Risk Assessment carried out?

It is strongly advised that you do an Annual Risk Assessment. As the landlord, you are responsible for the safety of your tenants and must ensure the property is adequately protected against the risk of fire.

Do HMOs need fire extinguishers?

Dependant on the outcome the FRA, the assessor who carries out a FRA on the property may advise you to. Its important that if you do provide them, you give the occupiers detailed instructions on when and how to use them.

Do I need smoke detectors in my HMO?

Yes, if you have an unlicensed HMO then you will need to provide smoke alarms on every habitable floor and ensure they’re working before tenants move in. Licensed HMOs may have stricter rules imposed as part of the license. You can find greater details on the LACORS agreement.

Do I need a gas safety certificate for my HMO?

You must carry out a gas safety check every year in your HMO and provide copies of the certificate to your tenants.

Do HMOs need fire doors?

There is no legal requirement to install fire doors in your HMO, but if your HMO requires a license then the local authority may require this dependent on the circumstances. Fire safety is very important in an HMO due to the higher occupation levels and its advisable to make the property as safe as possible from risk of fire.

Who pays council tax in my HMO?

If you let the property by room, you will be responsible for council tax payments and you can recoup the cost through the rent. If you rent the property as a whole to a group, they will be responsible for council tax payments unless exempt- such as students.

How much does an HMO license cost?

HMO license costs vary from council to council and depend on the number of HMOs you run. Starting prices for 1 HMO are from around £45 and can go up to over a £1000 for a new application. Renewal fees are lower, from around £150 and discounts can often be made if you renew the license for more than 1-year period or have multiple HMOs.

How Can we make the process smoother for you?

We appreciate the modern day stress landlords are under therefore we have simplified the process for you. Why not speak to one of our dedicated HMO specialists on 01772 7171781 who are more than happy help you arrange a HMO license. Our fees start from £500 + VAT plus cost off disbursements which your local authority will require to support your HMO application form.

*Price List

- Fire Risk Assessment Fess £110
- Gas Safe Engineers’ Certificate £80
- Electrical Installation Condition £120.00
- Periodic Fire Alarm Test Certificate £60
- Periodic Emergency Lighting Test Certificate £60
- Monthly Fire Check £50 per visit
- Portable Appliance Test Certificate(Dependant on number of appliances)
- A Basic Disclosure and Barring Service (DBS) check (which the local authority use as part of their Fit and Proper Person check)

*Prices shown above are indicative prices. Prices may vary depending on property size etc. Please call for the exact prices for your property.