Houses in Multiple Occupation (HMO)
- What is a House in Multiple Occupation (HMO)?
- Why does the government want HMOs to be licensed?
- Do all HMOs have to be licensed?
- How will licensing work?
- What does “fit and proper person” mean?
- How do I know if my property needs to be licensed?
- What constitutes a three storey property?
- What is a licence?
- How long will it last?
- How much will it cost?
- Can a licence be refused?
- What will happen then?
- Can I appeal?
- Temporary exemption from licensing
- Are there any other penalties?
- Rent repayment orders
- How do I find out further information?
What is a House in Multiple Occupation (HMO)?
A House in Multiple Occupation is defined in sections 254 and 257 of the Housing Act 2004. A building or part of a building can be an HMO if it is:
Occupied by persons who form more than one household, and where those persons share [or lack] one or more basic amenities such as a WC, personal washing facilities or cooking facilities, or
A converted building containing one or more units of accommodation that do not consist entirely of self-contained flats. [There is no requirement that the occupiers share facilities], or
A converted building consisting entirely of self-contained flats, where the building work undertaken in connection with the conversion did not comply with the Building Regulations 1991 and more than one third of flats are occupied under short tenancies.
The HMO must be occupied by more than one household:
- As their only or main residence
- As a refuge by persons escaping domestic violence
- During term time by students, or
- For some other purpose that is prescribed in regulations.
In all cases:
- Occupation of the living accommodation must be the only use of that accommodation, and
- Rents are payable or other considerations are provided.
Under the Housing Act 2004, a household comprises:
- A single person, or
- Co-habiting couples [whether or not of the opposite sex], or
- A family [including foster children and children being cared for] and current domestic employees.
Exemption from HMO definitions
Certain types of buildings will not be HMOs for the purpose of Part 2 of the Act. They are listed in Schedule 14 of the Act and include:
- Buildings or parts of buildings, occupied by no more than two households, each of which comprises a single person only [e.g. two person house or flat shares],
- Buildings occupied by a resident landlord with up to two tenants,
- Buildings managed or owner by a public sector body, such as the police, local authority, registered social landlords, fire and rescue authority and the NHS,
- Buildings occupied by religious communities,
- Student halls of residence where the education establishment has signed up to an Approved Code of practice,
- Buildings occupied entirely by freeholders or long leaseholders,
- Buildings regulated otherwise than under the Act, such as care homes, bail hostels etc, and the description of which are specified in regulations.
A property can also be an HMO if the local authority has made a declaration to that effect and the owner has not appealed or the owners appeal has been dismissed.
Why does the government want HMOs to be licensed?
Larger HMOs, such as some bedsits and shared houses, often have poorer physical and management standards than other privately rented properties. People who live in HMOs can be amongst the most vulnerable and disadvantaged members of society and as HMOs are the only housing option for many people, the government considers that they must be properly regulated.
Licensing is intended to make sure that:
- landlords of HMOs are “fit and proper” or employ managers who are,
- high risk HMOs can be identified and targeted for improvement,
- the standard of management of the HMO is adequate, and
- each HMO is suitable for occupation by the number of people allowed under the licence.
Where landlords refuse to meet these criteria the council can intervene and manage the property to prevent overcrowding, tackle antisocial behaviour and ensure that vulnerable tenants can be protected.
Do all HMOs have to be licensed?
No, the Housing Act 2004 specifies three types of licensing:
1. Compulsory Licensing of HMOs for properties that are:
- three or more storeys high
- have five or more people in more than one household, and
- share amenities such as bathrooms, toilets and cooking facilities.
2. Additional Licensing of HMOs
A discretionary power that Councils may decide to apply to a particular type of HMO, e.g. two-storey properties occupied by three or more students.
3. Selective Licensing of other residential accommodation
Properties that aren’t subject to HMO licensing could be covered under a selective licensing scheme. The Council may declare that certain areas are suitable for selective licensing, e.g. where there is low demand for housing and / or antisocial behaviour. This type of licensing would cover all forms of private rented housing, including HMOs.
At the present time Warrington Borough Council has no plans to introduce Additional or Selective Licensing.
How will licensing work?
Anyone who owns or manages an HMO which falls within the compulsory licensing provisions must apply to the council for a licence. The council must give a licence if it is satisfied that the:
- HMO is suitable for occupation by the maximum number allowed under the licence, or can be made so by imposition of conditions
- proposed licence holder is a “fit and proper person”, and must be the most appropriate person to hold the licence,
- proposed manager, or his agent , must be the person having control of the HMO,
- proposed manager is a “fit and proper person”, and,
- proposed management arrangements are satisfactory.
What does “fit and proper person” mean?
The council must carry out checks to make sure that the licence holder / manager is a “fit and proper person”. In deciding whether someone is fit and proper the council must take into account:
- details of any unspent convictions involving fraud, dishonesty, violence, drugs or sexual offences,
- details of convictions relating to unlawful discrimination on grounds of sex, colour, race, ethnic or national origin or disability,
- whether the proposed licence holder has any convictions relating to housing, public health, environmental health or landlord & tenant legislation
- whether the proposed licence holder owns or manages [or has owned or managed] an HMO which has been subject to a Control Order in the 5 years preceding the date of application [s379 Housing Act 1985], or has been subject to enforcement action under section 5 Housing Act 2004 [Housing Health & Safety Hazard Rating Scheme]
- whether the proposed licence holder owns or manages [or has previously owned or managed] HMOs that have been refused a licence under Part 2 or 3 of the Housing Act 2004 or has had a licence revoked as a result of breaching the licence conditions, or have acted otherwise than in accordance with any approved code of practice made under s233 of the Housing Act 2004
- information about any HMO or house owned or managed [or previously owned or managed] by the proposed licence holder that has been the subject of an Interim or Final Management Order.
The government recommends that landlords or managers are members of a professionally recognised body, or an approved landlords association that is affiliated to the National Federation of Residential Landlords.
How do I know if my property needs to be licensed?
What constitutes a three storey property?
A licensable HMO has to be in a building of 3 storeys or more. The following diagrams show what to include within the number of storeys:
What is a licence?
The licence will specify the maximum number of people who may live in the HMO. It will also include the following conditions, which apply to every licence:
- a valid current gas safety certificate, which is renewed annually, must be provided,
- proof that all electrical appliances and furniture are kept in a safe condition,
- proof that all smoke alarms are correctly positioned and installed, and
- each occupier must have a written statement of the terms on which they occupy the property, for example, a tenancy agreement.
Councils may also apply the following conditions:
- restrictions or prohibitions on the use of parts of the HMO by occupants
- the property and its contents, such as furniture and bathroom facilities are kept in good order and repair
- specified works to be carried out within a particular time limits
- the responsible person attends an approved training course.
How long will it last?
A licence will normally last for a maximum of five years, although it can be for a shorter period. If the property is sold within this time and the new owner continues to operate it as a licensable HMO then they will need to make a new application for an HMO licence – licences are not transferable.
How much will it cost?
The council’s fee for licensing has been determined in accordance with the Toolkit Guidance issued by the ODPM [Office of the Deputy Prime Minister] and amounts to £370 per property.
The licence fee for registered charities is £185 giving a 50% reduction on the full fee.
There is a facility to pay by five annual instalments, which is subject to a 20% surcharge to cover the increased administrative costs incurred by the council in offering this service.
Can a license be refused?
Yes, if the property doesn’t meet the licence conditions and the landlord or manager is not a fit and proper person, the council can refuse to license.
What will happen then?
If a landlord fails to bring an HMO up to the required standard, or fails to meet the fit and proper person criteria, the council can issue an Interim Management Order (IMO), which allows enables it to manage the property. The owner keeps their ownership rights. This order can last for a year until suitable permanent management arrangements can be made. If the IMO expires and there has been no improvement, the council can issue a Final Management Order. This can last up to five years and is renewable.
Can I appeal?
Landlords can appeal if the council decides to:
- refuse a licence
- grant a licence with conditions
- revoke a licence
- vary a licence
- refuse to vary a licence.
Appeals are to the Residential Property Tribunal [RPT], normally within 28 days.
Temporary exemption from licensing
If a landlord or person in control of a property intends to stop operating it as an HMO or reduces the numbers of occupants and can give clear evidence of this, then they can apply for a Temporary Exemption Notice. This lasts for up to 3 months and ensures that a property in the process of being converted from an HMO does not need to be licensed. If the situation is not resolved, then a second Temporary Exemption Notice can be issued. When this runs out the property must be licensed, become subject to an Interim Management Order, or cease to be an HMO.
Are there any other penalties?
It is an offence if the landlord or person in control of the property:
- fails to apply for a licence for a licensable property or
- allows a property to be occupied by more people than are permitted under the licence.
This is a criminal offence, liable to a fine of up to £20,000. Additionally, contravention of any of the licence conditions can result in a fine up to £5,000.
Rent repayment orders
A tenant living in a property that should have been licensed, but was not, can apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of 12 months). Councils can also reclaim any housing benefit that has been paid during the time the property was without a licence.
Application form and notes will shortly be available to download from this website
Links
www.communities.gov.uk 
How do I find out further information?
If you would like further information, and an information pack and application form -
Contact – Private Sector Housing on 01925 442448
To request further information, please visit the online forms section.
Last updated 01/02/2010 13:19:23
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