Multiple Occupancy Homes

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Multiple Occupancy Homes

The Housing Act 2004 introduced mandatory licensing of  Home Multiple Occupancy (HMO) and a new definition of HMO's. The following information is provided to give a brief overview of the HMO definition and provide information on the types of HMO requiring a licence.

What is a HMO?

• A dwelling will be a HMO if three or more unrelated people are sharing facilities
• Buildings comprising non self contained flats are HMO's
• Houses converted to self contained flats before 1991 and not in accordance with the 1991 Building Regulations will be HMO's
• A self contained flat converted to 1991 Building Regulations or later if occupied by more than three unrelated persons will be a HMO

 

The change in definition particularly impacts on smaller shared houses, those occupied by students, which have been brought back into the HMO definition.

Why are larger HMO's being licensed?

Larger HMO's such as bedsits and shared houses are often linked to poorer physical standards than other private rented property.  The people who live in HMO's are often amongst the most vulnerable and disadvantaged in society.  As HMO's are the only housing option for many people, the government has recognised that it is vital that these properties are effectively regulated.

Do all HMO's have to be licensed?

Under the Act there are three types of property, which need to be licensed.

Mandatory licensing

• Three or more storeys high
• Have five or more people in more than one household
• Share amenities such as bathrooms, toilets and cooking facilities

Additional Licensing – HMO's

A discretionary power that council's may decide to apply to a particular type of HMO, for example, to include an existing registration scheme.

Selective Licensing – of other residential accommodation

Properties that are not subject to HMO licensing could be covered under a selective licensing scheme.  This is where the Council may declare that certain areas, for example, where there is low demand for housing or issues with anti-social behaviour may be appropriate to selective licensing.

How does Licensing work?

Anyone who owns or manages a HMO that may be subject to licensing must apply to the Council for a licence.

 

The Council must grant a licence, if it is satisfied that;

 

• The proposed licence holder is a Fit and Proper Person
• The HMO is suitable for occupation for the number of persons allowed on the licence.
• The proposed licence holder is the correct person to hold the licence
• The proposed management of the property is satisfactory
• The financial structures for the management are suitable

Fit and Proper Persons

The council will carry out checks to make sure that the person applying for a licence is a 'Fit and Proper' person.  The following will be taken into account when making the assessment;

 

• Any previous convictions relating to drugs, fraud, sexual offences or violence
• If the proposed licence holder has committed any offences relating to housing or tenant law
• The proposed licence holder has been found guilty of any unlawful discrimination
• If the proposed licence holder has broken any pervious HMO code of practice.

 

If a person does not meet the conditions set and the landlord is not a Fit and Proper person, then the Council may refuse to grant a licence.

Interim Management Orders (IMO)

If a landlord fails to bring a HMO up to the required standard, or fails to meet the Fit and Proper person criteria.  The council can take over the management of the property.  Under the Act an IMO allows a Local Authority to manage the property for up to a year, until suitable management arrangements have been made.  The owner does keep their right as an owner.  If the IMO expires and no improvement has been made then the Council can issue a Final Management Order (FMO).  This can last up to five years and be renewed following this period.

Penalties for operating without a Licence

It is an offence if the landlord or person in control of the property;

• Fails to apply for a licence for a licensable property
• Allows a property to be occupied by more than are permitted under the licence

 

A fine of up to £20,000 may be imposed.  In addition, contravening any of the licence conditions can result in fines of up to £5000.

Rent Repayment Orders

A tenant living in a property that should have been licensed, but was not, can apply to the residential Property Tribunal (RTP) to claim back any rent they have paid during the unlicensed period.

Temporary Exemption from Licensing

If a landlord or person in control of a property intends to stop operating it as a HMO or reduced the number of occupants and can give clear evidence of this, then they can apply for a Temporary Exemption Notice.  This lasts for a maximum of three months and ensures that a property in the process of being converted from a HMO no longer needs to be licensed.  If this situation is not resolved, then a second Temporary Exemption can be granted.

Applying for a HMO Licence

If you think you have a property that needs to be licensed, please contact the housing department on our generic contact number.

Application Fee

Landlords will have to pay a fee to cover the cost of the licence procedure.  The fee is a standard charge of £330, based on five lets.  An extra £25 will be charged for every additional letting unit to a maximum of £500.  Once a licence has been granted it will normally last for five years, although it can be for a shorter period.