Is this an HMO?

by Readers Question

10:54 AM, 20th February 2019
About 4 weeks ago

Is this an HMO?

Make Text Bigger
Is this an HMO?

I would appreciate your thoughts on whether the following will constitute an HMO:

My husband and I would like to buy a flat and rent out 2 of the rooms to 2 separate people. We would use a third room for ourselves from time to time when we are visiting London.

We would share the kitchen but may have an en-suite.

As we would still only have 2 tenants then there is no HMO as we would only be visiting the flat?

This would not be our principle private residence so we cannot have the 2 occupants as lodgers.

Thanks for your assistance.

Marie

Editors Note:

From .Gov >> https://www.gov.uk/renting-out-a-property/houses-in-multiple-occupation-hmo

Houses in Multiple Occupation (HMO)

If you let your property to several tenants who are not members of the same family, it may be a ‘House in Multiple Occupation’ (HMO).

Your property is an HMO if both of the following apply:

  • at least 3 tenants live there, forming more than one household
  • toilet, bathroom or kitchen facilities are shared

A household consists of either a single person or members of the same family who live together. It includes people who are married or living together and people in same-sex relationships.

Licences

An HMO must have a licence if it is occupied by 5 or more people. A council can also include other types of HMOs for licensing.

Find out if you need an HMO licence from your council.



Comments

Neil Patterson

10:57 AM, 20th February 2019
About 4 weeks ago

Hi Marie, Please see my editors notes in the article.

By government definition it would not be an HMO with 2, but if you increase this to 3 at any point you need to check with your local council if they require and HMO licence along with all the addition regulation and H&S required.

Mike

12:52 PM, 20th February 2019
About 4 weeks ago

In a way this is your second home, part of which you are renting, there isn't any clear cut views on this whether one can part rent their second home, if you can then under what category, safest bet would be HMO since that would allow you 24hr access without having to inform your tenants that you intend to visit your house and spend some time in your own room and possibly share the kitchen.
I have an HMO in which I rent out 3 rooms and two rooms I keep to myself and I have explicitly made it clear in my tenancy agreement that landlord also occupies two of the rooms and can come and go as and when he likes without notifying any of the tenants, and I can also share the facilities such as kitchen bath etc, since I am also an occupier, and I have the same rights as any tenant in this HMO.
I showed my tenancy agreement to a Lawyer yesterday, he did not seem to raise any concern to this regard, but we truly don't know what is the exact law position on this.

My tenancy agreement also mentions clearly that this property is landlords second home as well and landlord occupies two of the rooms.

You certainly don't want to fall off the tenants rights to peace and quiet enjoyment and no undue interference from landlord, so in my view HMOs allow landlords to visit property in the common areas usually at some reasonable times and at lower frequency, things can change when you also occupy some rooms for yourselkf

Highland Lass McG

15:32 PM, 20th February 2019
About 4 weeks ago

Reply to the comment left by Mike at 20/02/2019 - 12:52
Hi Mike
That's very useful especially detailing it all clearly in the tenancy agreement. In that way everyone knows where they stand.
Thanks

Highland Lass McG

15:33 PM, 20th February 2019
About 4 weeks ago

Reply to the comment left by Neil Patterson at 20/02/2019 - 10:57
Hi Neil
That's what we thought, as long as we only ever have 2 people renting.
Thanks for your assistance.

Richard Peeters

9:56 AM, 21st February 2019
About 4 weeks ago

Hi Marie,
Since this flat is not YOUR main or permanent place of residence, then you do not count towards HMO occupancy. Unless one of the two HMO tenants has a partner move in with them (making 3 occupants whose main and permanent home it is), then it simply won't be a HMO.
Even if there *were* three occupants in those two rooms, and it *were* then a HMO, if you have let the two rooms separately (individual ASTs instead of one covering the whole flat), then you don't need to give notice to enter the communal areas, or your private rooms.
As was suggested, it wouldn't hurt to spell it out: you may come and go as you please in communal areas and your private spaces, but it would be a good courtesy to message the tenants before you did arrive. And it might even prompt a clean-up!

Richard Roberts

10:24 AM, 21st February 2019
About 4 weeks ago

Marie

Have you thought about running the flat as a Service Accommodation unit with it being in London
Although it takes a lot of effort to setup up the unit with organised systems, cleaner and maintenance. The returns can be quite good, especially if the flat is in London. Especially if you are selective on the people staying.
We used booking.com and Airbnb for a house 2 miles outside Liverpool, and inundated with requests every weekend.
There are details on the web on how to run one properly and it would give you the option of booking out the flat yourself.

Just a thought All the best Rich

Ross Tulloch

10:52 AM, 21st February 2019
About 4 weeks ago

As I understand it, it is an HMO if there are (people from) two or more families, and five or more people. Unless the local council has additional selective licensing, in which case it will be three or more people.

jbw63

11:37 AM, 21st February 2019
About 4 weeks ago

Separate to the HMO question, it is my understanding that legally you cannot use AST's if you live in the same building unless the building is officially divided into separate flats and you inhabit one of these and your tenants the others. If you are living in the same flat or house, then your 'tenants' should not be 'tenants' with an AST, but lodgers under a lodgers agreement. Then regarding mortgage application, you will not have income under AST (and a buy-to-let mortgage) but it will be your own home as you will have a lodgers agreement (and normal residential mortgage with permission to have some lodgers). You need to be clear with mortgage company products - sometimes you can be mis-sold, but lenders can terminate your mortgage with minimal notice if they find out you are using the wrong product or abusing the terms of their agreement with you, ignorance is no defence. I heard about a case last month where someone used a buy to let mortgage for HMO and their mortgage company found out as the council informed them, they had under 14 days to pay back everything ie find other finance, it cost them thousands in penalties and re-financing. if anyone can find a legitimate source of legislation that states you can do otherwise, I'd be interested to hear. Good Luck. 🙂 !
PS Additionally you must be very clear when purchasing insurance products, misunderstandings or changing what you do without informing your insurance company can invalidate your insurance policy - and that might also be costly if you are unlucky.

jbw63

11:48 AM, 21st February 2019
About 4 weeks ago

My current understanding is that the other thing you could do if it is not your primary residence is to claim that this new property is your 'second residence' as the condition is that you are going to need to legitimately live there part of the time, and then use lodgers contracts, and work that through with lenders and insurance companies. Again, if anyone can find a legitimate source of legislation that states you can do otherwise, I'd be interested to hear.

Chris Baker

14:42 PM, 25th February 2019
About 3 weeks ago

I have listed under a couple of sorces of legislation governing HMOs you may find these assist.

The Licensing of HMOs (Prescribed Description) (England) Order 2018
http://www.legislation.gov.uk/uksi/2018/221/made
https://www.legislation.gov.uk/ukpga/2004/34/contents

Check out these links to “HMO rules” and “Standard Test”

I am currently locking horns with a council’s over the legislation of both HMO and new licencing rules that currently govern HMOs.

Until license laws changed I had a similar set-up whereby I have a second residence which I shared with had 4 lodgers. I am currently down to 2 lodgers while there is no current issue with the council that I currently don’t require a licence, I should piont out that while the property it self meet or would soon meet the full critera of a licence requirement, my lender is not allowing chances to their terms, (the council states it a legal requirement that I state who and when any lender granted me permission to proceed for a licnece on the propertry) and the fact is the inclome generated from the two lodgers is just not enough, I need to find a way of more rent in order to retain the property the and it looks like I can claim residence and rent 4 room out without the property even falling into an HMO criteria.

My understanding is that a person who have another residence or another main residence should NOT be counted towards the number of persons in an HMO (If this is correct as and where the HMO is not their main residence is not treated as a person for the purpose of an HMO. This rule is stated in 259 (1) of the housing act 2004, the exception being under (2) & (3).

When I put the scenario of any persons with either another residence or other main residence, the council insist every one is countable!

Despite my efforts to persuade the council that I believe they are misinterpreting the laws and rules, they are not budging, this has now gone to their solicitor for their clarification.

The laws governing HMOs are fairly extensive, which does make it more complicated and more open to differences of interpretation. However; it looks to me like I am right, but after my dealings with other councils’ solicitors, I don’t have faith that the result will match my understanding.
I have sort my own legal backing but I am struggling to find a solicitor knowledgeable in this area, and who wish to take this on.
If any such knowledgable legal beagles reading this wish to offer their service, feel free to get in touch.

To stress the point of my understanding, consider that scenario:-
A landlord who used a property as a second home (so they can occupy and retain full right of access) and rented (non-locked) rooms (with shared facilities) to 5 lodgers (but it could be more). The important factor being that both the landlord and each of the lodgers also had another residence or other main residence, then an HMO would NOT even occur. Right?
Furthermore if a HMO do not occur then potentially the licence factor is not applicable, as it is only applicable to HMOs. Right?

Getting this wrong would be costly a fine of 30k for failure of not being licenced if it is required, so don’t (ever) take my babblings as gospel, or even if it is correct don’t expect your council not to act against you anyway.

What’s the difference between God and a manager at the council?
Answer: God doesn’t think he’s a manager at the council.

I expect I will either have to fight to overrule the councils findings, or allow myself to be railroaded and instead sell, or seek an alternative way to get the income needed.

Regards
Kris

http://www.legislation.gov.uk/uksi/2018/221/made

Description of HMOs prescribed by the Secretary of State
4. An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act if it—
(a)is occupied by five or more persons;
(b)is occupied by persons living in two or more separate households; and
(c)meets—
(i)the standard test under section 254(2) of the Act;
(ii)the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or
(iii)the converted building test under section 254(4) of the Act.

is contrary to my understanding of the very small line of rule under the Housing act 2004. 245 (c) and 259 (1)

https://www.legislation.gov.uk/ukpga/2004/34/contents
254Meaning of “house in multiple occupation”
(2)A building or a part of a building meets the standard test if—
(a)it consists of one or more units of living accommodation not consisting of a self-contained flat or flats;
(b)the living accommodation is occupied by persons who do not form a single household (see section 258);
(c)the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259);
(d)their occupation of the living accommodation constitutes the only use of that accommodation;
(e)rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation; and
(f)two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities.

259HMOs: persons treated as occupying premises as only or main residence
(1)This section sets out when persons are to be treated for the purposes of section 254 as occupying a building or part of a building as their only or main residence.
(2)A person is to be treated as so occupying a building or part of a building if it is occupied by the person—
(a)as the person’s residence for the purpose of undertaking a full-time course of further or higher education;
(b)as a refuge, or
(c)in any other circumstances which are circumstances of a description specified for the purposes of this section in regulations made by the appropriate national authority.
(3)In subsection (2)(b) “refuge” means a building or part of a building managed by a voluntary organisation and used wholly or mainly for the temporary accommodation of persons who have left their homes as a result of—
(a)physical violence or mental abuse, or
(b)threats of such violence or abuse,
from persons to whom they are or were married or with whom they are or were co-habiting.

1 2 3

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

The Doves have it the Doves have it

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More