HMO’s- Is it time to Hand the Money Over?
New rules from 1 October 2018 impose more stringent licencing requirements for a House of Multiple Occupancy, or HMO for short.
HMO is a term used to describe properties which are rented to at least 3 people (who are not a family) and share basic amenities such as a kitchen or bathroom, for example student accommodation and bedsits. Whether a Property is a HMO or not requires careful consideration as there are a number of requirements and exemptions which affect classification.
If you are (or are thinking about being) a Landlord of a HMO then you need to be aware of the new rules, effective from 1 October 2018, that must be complied with particularly as the new rules will mean more properties falling into the licensing requirements.
What constitutes a HMO and the end of the “3 storey rule”
Whereas previously a HMO Licence was only required if the property was 3 storeys or more and was occupied by 5 or more individuals who did not form “one household” from 1 October 2018 all HMOs with 5 or more people forming two or more separate households must have a licence. It is estimated that this change will almost quadruple the number of properties requiring a licence. The Licences themselves are issued by Local Authorities and require renewal every 5 years.
Where a Licence is now required, and to avoid being deemed an unlawful letting, the Licence should have already been obtained or at least applied for before 1 October 2018. Failure to comply can result in unlimited fines.
Additionally, where a letting has now become a HMO Landlord’s of mortgaged property will need to check to ensure they are not in breach of their mortgage and insurance conditions.
Further laws have been introduced in an attempt to combat overcrowding and “revenge evictions”. There is now a minimum size for bedrooms- just over 10m² for a double bedroom. Any rooms smaller than 4.64m² cannot be used as a bedroom and there is a requirement to inform the Local Authority of any rooms smaller than this.
Tenants now also enjoy better protection from revenge evictions. Previously, a Landlord could terminate a tenancy with 2 months notice however the new changes mean that such notices cannot be issued within the first 4 months of a tenancy. Additionally if a Tenant informs their Landlord of a want of repair a Landlord who responds by seeking to terminate the tenancy will be in breach of the new legislation.
If you wish to speak to a member of the team regarding a HMO or any other commercial property issues please call Rob Pettigrew on 0121 796 4022 or email firstname.lastname@example.org.