Am I in HMO territory?

by Readers Question

10:28 AM, 1st April 2019
About A year ago

Am I in HMO territory?

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Am I in HMO territory?

I have a two bedroom flat in a large purpose built block in the city centre. Two beds, lounge, kitchen, family bathroom and en-suite to main bedroom. Basically it is a standard two bed residential apartment all on one floor.

I have always had a sole tenant or a couple in occupation until now.

The couple that have been there for the last two years are moving out and I’m advertising for a new tenant. I have been approached by a nice lady who wants to rent the property with her partner and also a third person who she says is a friend. (Apparently they are currently renting on this basis). Says all three of them want to be on the tenancy agreement.

I have never been involved with HMO’s before, not my area of expertise at all, but I do know the rules have changed last year. I guess I don’t need to apply for an HMO licence as there aren’t five persons involved?

But from what I can see I might be setting up a non licenceable HMO here as there are more than two persons? Can I just get all three of them to sign the tenancy agreement and not worry about anything else and simply carry on as I’ve done in the past or am I missing something major?

Many thanks

Dylan

Editors Notes: See .Gov >> https://www.gov.uk/house-in-multiple-occupation-licence

House in multiple occupation licence

A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.

If you want to rent out your property as a house in multiple occupation in England or Wales you must contact your council to check if you need a licence.

You must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if all of the following apply:

  • it is rented to 5 or more people who form more than 1 household
  • some or all tenants share toilet, bathroom or kitchen facilities
  • at least 1 tenant pays rent (or their employer pays it for them)

Even if your property is smaller and rented to fewer people, you may still need a licence depending on the area. Check with your council.



Comments

Neil Patterson

10:36 AM, 1st April 2019
About A year ago

Hi Dylan,

Please see my editors notes above.

Simon Williams

11:52 AM, 1st April 2019
About A year ago

You will have 3 sharers and at least 2 households (probably 3 if the couple are not married or in a civil partnership). So it's an HMO I think.
BUT, in most areas only HMO's with 5 or more occupants need to be licensed. If so, you are OK and can proceed as normal. But check your local authority doesn't have (or isn't actively proposing) so-called "additional" licensing whereby ALL HMO's are going to be covered.

Ian Narbeth

12:00 PM, 1st April 2019
About A year ago

You should work on the basis that it is an HMO. Even if not licensable, you will need to put in fire doors and may need a fire alarm system. Can you install them? Do you need consent of the freeholder to do the works? Check also the alienation clauses in the lease? Do they restrict sharing with third parties?

Rob Crawford

12:42 PM, 1st April 2019
About A year ago

Hi Dylan, from what you have said it's an HMO but does not qualify for "mandatory licensing". If you Local Authority has, however, introduced additional or selective licensing in your area, then you will need a licence. Even if you do not need a licence, you still need to comply with the requirements of an HMO as defined within the Housing Act 2004. If you down load the mandatory licensing application form published by your LA, you can use this for reference and will get an insight of what your LA expects of HMO Landlords. The LACOR's Guide is available on line and you should be able to work out what fire regulations need to be complied with for your type of property.

Yvonne Francis

14:51 PM, 1st April 2019
About A year ago

Dylan is quite right to wonder if 3 people constitute a HMO. In my area and lots of others, it is down to 3. However if you have a co-habiting couple, if I interpret my Council correctly then it’s; ’marriage or equivalent co-habiting arrangements’ (see link). So under the suggested arrangement, I think this tenancy would not fall under the classification of a HMO.

If it was me, if I had a flat that could be let to a family I would choose that option. With the suggested option the situation could change and I know from experience that it is best to avoid being a HMO, whether it needs a license or not.

If you are determined to go ahead it is best to contact your Council. in person or online, as rules vary and they can give you proper information.

https://www.oxford.gov.uk/info/20113/houses_in_multiple_occupation/926/properties_that_need_a_hmo_licence

Rob Crawford

15:36 PM, 1st April 2019
About A year ago

Reply to the comment left by Yvonne Francis at 01/04/2019 - 14:51Hi Yvonne, the link you provided is quite clear that 3 persons (children or adults) and two house holds constitutes an HMO - so I am struggling to understand how you have interpreted this as otherwise? Two married adults will constitute a single household but they are still two adults. The other room with a single unrelated tenant is another household. Three adults and two households represents an HMO.

John Frith

15:45 PM, 1st April 2019
About A year ago

There is a lot of confusion caused by people not differentiating between licensable and unlicensable HMO, so I recommend getting to the bottom of the actual legislation. I'd start with Sections 254 to 259 of the Housing Act 2004.

Section 258 HMOs: persons not forming a single household
xxx snip xxx
(2)Persons are to be regarded as not forming a single household unless—
(a)they are all members of the same family, or
xxx snip xxx
(3)For the purposes of subsection (2)(a) a person is a member of the same family as another person if—
(a)those persons are married to each other or live together as husband and wife (or in an equivalent relationship in the case of persons of the same sex);
(b)one of them is a relative of the other; or
(c)one of them is, or is a relative of, one member of a couple and the other is a relative of the other member of the couple.
xxx snip xxx
XXXXXXXXX

So the relevant bit is "live together as husband and wife ".

Yvonne Francis

18:06 PM, 1st April 2019
About A year ago

Reply to the comment left by Rob Crawford at 01/04/2019 - 15:36
Yes Rob, you are right. I am muddling up households as individuals as clearly a HMO is two households as indicated in the second point. I am used to dealing with unrelated individuals and was classing the cohabiting couple as one individual. Must still say I still personally would not go there if I was Dylan!

Alison King

9:36 AM, 2nd April 2019
About A year ago

I agree with the interpretation but it makes a mockery of the idea that people in rented accommodation can have a lodger. Something the government has been trying to encourage with the rent a room scheme.

Dylan Morris

10:00 AM, 3rd April 2019
About A year ago

Just wanted to give you all an update:

Phoned the RLA who told as there were more than two persons and more than one household the property would definitely be an HMO. They referred me to the local council and to take advice from them and there was a possibility I would need fire doors and locks on bedroom doors, depending on local authority requirements. Also a notice would have to be put up stating I was the property manager and I’d also need to install adequate fire alarms to comply with council requirements and also conduct a fire and health & safety risk assessment.

I have spoken to the local Enviormental Health officer at the council. She was most helpful and I explained the flat was in block built by Barratt around 10 years ago and there were around 100 units in the block.

She said it would be classed as a “low risk” HMO and would not require a licence. I would need to ensure there was a fire door on the entrance to the flat that would need to comply with current fire regulations. I’ve no idea whether it does but it does seem a substantial door and must have complied when built so I’m taking it that it is compliant.

She asked about smoke alarms and I told her there was one in the hall area (mains/battery) installed by Barratts and I’d also put up a battery one myself in the lounge near the kitchen. She asked whether the mains alarm was interconnected with the other flats in the block. I’ve no idea but assume it is as would have had to comply with regulations when built and the management company insitu ensure regular fire checks are done so again I assume it complies given they do regular checks and appear to be running the site well. She told me if the alarm wasn’t interconnected given the nature of the block there was probably little I could do about it anyway.

She told me there would be no requirement for locks on the bedroom doors given it was just a two bed flat.

There was no mention of a House Manager notice or risk assessment to be carried out but I’ll knock something up as the RLA advice is worth doing to cover myself.

Overall I got the impression the local authority weren’t overly concerned about things. I guess had I been renting flats in an old Victorian block then they would take more of an interest.

Another thing she said they would prefer the three occupants to all be on tenacy agreement as this would give me some control if a tenant left and was replaced by somebody else.

So doesn’t seem the problem that I thought it would be and I’m going to go ahead.

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