New mandatory HMO licensing rules fast approaching – 1st Oct

by Property 118

8:22 AM, 12th September 2018
About A week ago

New mandatory HMO licensing rules fast approaching – 1st Oct

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New mandatory HMO licensing rules fast approaching – 1st Oct

The October 1st deadline for new mandatory licensing rules of HMOs is only weeks away. There has been almost no government assistance in the form of information campaigns considering the latest .Gov website update says landlords could get an ‘unlimited’ fine for renting out an unlicensed HMO.

The old rules included a stipulation that the HMO only had to fall under mandatory licensing if the property had three or more storeys, shared by five or more people in two or more households, where facilities such as kitchen or bathroom are shared.

The new rules remove the stipulation for 3 or more stories and a property of any height that fits the other criteria above must be licensed.

It will not be possible to serve a section 21 if a property has not been properly licensed and a landlord or agent or both could face a criminal prosecution and record, an unlimited fine and an order to pay court costs and a victim surcharge.

However, the council could alternatively issue a civil penalty of up to £30,000 and a rent repayment order of up to 12 months rental income. This option would obviously be more lucrative for councils.

A guide is available from the government titled: Licensing of houses in multiple occupation in England: a guide for landlords and managers Click Here to download

This publication is aimed at landlords and managers who manage a house in multiple occupation (HMO), or if you are not sure whether you manage an HMO. The booklet explains more about HMOs, which HMOs are required to be licensed and what other if any responsibilities there are in relation to the management of HMOs.

Click Here to Apply for a House in Multiple Occupation Licence (see screenshot below)

“Restrictions

A licence is valid for a maximum of 5 years.

You must renew your licence before it runs out.

You need a separate licence for each HMO you run.

Conditions

You must make sure:

  • the house is suitable for the number of occupants (eg size and facilities)
  • the manager of the house – you or an agent – is considered to be ‘fit and proper’, eg no criminal record, or breach of landlord laws or code of practice

You must also:

  • send the council an updated gas safety certificate every year
  • install and maintain smoke alarms
  • provide safety certificates for all electrical appliances when requested

The council may add other conditions to your licence, eg improving the standard of your facilities. They will let you know when you apply.

If you disagree with any conditions the council sets, you can appeal to the First-Tier Tribunal.

You should apply for the licence yourself, but if you use a managing agent they can apply for you.

You’ll be charged a fee which is set by the council.

Fines and penalties

You could get an unlimited fine for renting out an unlicensed HMO.

More information

Read the guide for landlords and managers who manage HMOs for more information.



Comments

Zoe AM

8:46 AM, 12th September 2018
About A week ago

you would be amazed how many estate agents do not know about this yet! I have spoken to a few agents we rent houses from as a company, as I am struggling to fill out the varied (in cost and information required) applications from different councils. We own property and let our staff stay in it for a nominal (cheap) fee. Because of this we have to have a 'fit and proper' person who is the licence holder in the immediate area of the HMO we own. On top of the Directors of the company that own each house. It's a minefield and very easy to get wrong.
Plus each council are charging different amounts, so far between £450 to £675 for the licence.
Surely the Government should have set the rates and told every letting agent in the country, as they will need a nominated person to hold the licence for any HMO they manage as the 'rent collector'.
Fast becoming an expert on this subject.

David Lawrenson

9:03 AM, 12th September 2018
About A week ago

It's all a bit odd isn't it?
When mandatory licensing was started, it was all about safety – for example, making sure there were enough fire escapes. Safety is more of an issue for properties that are set over three levels or more, so it made sense to target these taller buildings.
Yet, as there'd been no record of excess problems with, for example, fire safety, for two storey and single storey HMO buildings, it made sense to exempt them from mandatory licensing.
There still isn't it!

There has never been a full review of the existing HMO licensing system anyway, so it’s hard to say whether the system has achieved the goals set out for it originally.

Of course, this problem is exacerbated because many local authorities have been busy since 2006, bringing in “additional” and “selective licensing” in their patches anyway, where they think it is needed.

Selective licensing is the policy option that is already in place and available to councils to deal with “rogue” landlords and low housing demand. They are being used wherever they are deemed to be required, so it’s not clear what this latest extension to HMO licensing regime is supposed to achieve.
Is it fire safety... in which case, where is the need?
Is it low demand / antisocial issues... then, in which case, why not use Selective Licensing?

David Lawrenson
http://www.LettingFocus.com
Private Landlord Advice and PRS Consultancy

Zoe AM

9:10 AM, 12th September 2018
About A week ago

In our case we have many 1 storey HMO's, so this brings them into the licensing. Or in other words make more money. We have always had our properties inspected anyway. We just have to pay for it now.
The new legislation was meant to do away with the 'broom cupboard' bedrooms being let out. But using sites such as Spare Room as much as I do, we also rent rooms for our staff. There's so many what I would call 'unoffical' HMO's out there, I feel the Government should be focusing on those. Private landlords renting out 2/3 bedrooms in the house they live. That constitutes an HMO. But they have no fire regs, no licence and if I query that they have no knowledge either.
This is the 'dangerous' part of the market that should be regulated.

Alison King

9:31 AM, 12th September 2018
About A week ago

This bit about the 'fit and proper person' having to live in the immediate vicinity is a new one on me. Seems ridiculous when good communication is what matters most.

stephanie nascimento

9:43 AM, 12th September 2018
About A week ago

I’m managing the application just fine. My only stumbling block so far is the floor plan. Can I get someone to draw one up for me ? Is there an easy way of getting this done?

Any advice appreciated.

Lenin Benin

9:54 AM, 12th September 2018
About A week ago

My 3 bed rental is in a former council flat in a 5 storey block with 58 flats. Does Southwark council have to have a licence for each flat they rent to council tenants, or is it just for privately owned flats? I have 3 nurses happily sharing a 1 storey flat with 3 spacious bedrooms and living room on 3rd floor, so I'm not sure I need a mandatory licence, and it is not (yet) in their selective licensing area. I am worried that, as it is a 1930s building, there aren't any fire escapes on the outside of the building, although there are 2 stairwells. Might the council say I have to put in a fire escape to my individual flat? If so, wouldn't they also have to put in fire escapes to the council tenant's flats too? I don't want to ask the council at this stage, as it could be opening a can of worms, but I'm afraid I might be fined.!

Old Mrs Landlord

10:03 AM, 12th September 2018
About A week ago

Reply to the comment left by Zoe AM at 12/09/2018 - 09:10
These unregulated "unofficial HMOs" you describe presumably come under the category of homeowner with lodgers, so would qualify for Rent a Room relief and be untaxed as well if they generate income under the £7,500pa limit.

Zoe AM

10:08 AM, 12th September 2018
About A week ago

Reply to the comment left by Lenin Benin at 12/09/2018 - 09:54
Fire escapes are a thing of the past, the idea is you need to give them at least an hour of protection so they can stay put to be rescued. I would question the freeholder of the block, in the light of Grenfell it's a genuine concern, as their fire regs may not be up to date and adequate enough. You don't have to tell them your flat is rented. I am seeing more questions on insurance renewals now concerning fire safety, so as a landlord in your position I would at least replace the internal doors and your front door with fire doors with an hours resistance and make sure you have at least a smoke alarm in each room. That's a minimum I would do. But also check your insurance does actually cover it being rented out? If your nurses are unrelated it constitutes an HMO but not one you need to licence. That applies to 5 or more.

Zoe AM

10:09 AM, 12th September 2018
About A week ago

Reply to the comment left by stephanie nascimento at 12/09/2018 - 09:43
Hand draw it, the council did exactly that when they inspected the properties.

Lenin Benin

10:35 AM, 12th September 2018
About A week ago

Thank you for your useful advice Zoe. The front doors to all the flats were put in when the council recently refurbished the block and are very robust. I put in a fire door to the kitchen but the other doors are beautiful, original 1930s solid wood doors which I wouldn't like to lose! There are wired in alarms in the kitchen and hallway. One of the bedrooms, at the back, opens off the living room (not ideal) so I put an alarm in that bedroom. I will now consider putting an alarm in the other 2 bedrooms and living room. I lived in the flat myself for 20 years, and have never known a fire to spread beyond a flat itself, on the entire estate. The block is solid, well built brick and concrete floors, without any cladding. My block even survived being hit by a bomb during the war! It is also easily accessed by the fire brigade and ladders could reach my flat. I removed the gas cooker and installed a modern electric kitchen with everything rewired by a professional and have all the correct paperwork. The boiler is new and inspected yearly. I feel that my flat is very safe and comfortable with sensible, responsible tenants.

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