New licensing rules for Houses in Multiple Occupation (HMO) come into effect on October 1st 2018 and landlords are being warned that failure to comply could result in significant fines.
Currently, mandatory licensing for HMOs is limited to properties that are three or more storeys high and are occupied by five or more tenants. The new HMO licence extension, that comes into force next month, will include HMOs that are occupied by five or more people, regardless of the number of storeys. This includes any HMO which is a building or a converted flat where householders share basic amenities, such as a toilet, personal washing facilities or cooking facilities. Purpose built flats in small blocks and properties above commercial buildings (such as shops or restaurants) must also be licensed.
As part of these new measures, the Government has also introduced National Minimum Room Sizes for rooms used for sleeping and mandatory HMO licence conditions relating to refuse storage and disposal. Landlords found with HMO properties in breach of these minimum room sizes could be subject to fines of up to £30,000.
While there are many genuine landlords out there, there are also common incidents of HMOs being poorly managed, with tenants living in undesirable conditions. Licensing for HMOs was introduced in 2006, replacing previous HMO registration schemes, in a bid to raise management and amenity standards. The Government estimates that the extension of HMO licensing will bring 177,000 new properties into mandatory licensing.
How will the HMO licence extention affect landlords?
If you already have a licence for your HMO under the current “Licensing of Houses in Multiple Occupation, then your licence will continue to be valid until the expiry date. After it expires you will need to apply for a new licence, which may involve making changes to your property to comply with minimum room sizes and amenity standards (kitchen facilities, number of bathrooms etc).
If you currently rent an HMO which didn’t previously require licensing, but will in October, then you will need to apply for a licence through your local council before the October deadline. Landlords who fail apply for required licences by 1st October will be committing a criminal offence from that date.
What are the penalties?
Letting a licensable HMO without a licence is a criminal offence and can result in a fine of up to £20,000. This applies to a person having control or managing the property.
Landlords who operate a licensable HMO without a licence may also, in certain cases, have to repay rent. This applies to rent paid by tenants or by local authorities in housing benefit.
In addition, if your HMO is not properly licensed, you may not be able to evict tenants. In the case of an assured shorthold tenancy, a section 21 notice will not be valid if an HMO is not licensed when it should be.
For further information regarding the extension of mandatory HMO licensing and how to apply for a licence, please contact your local council.
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