Do you need a HMO licence?

HMO licence

Landlord and tenant solicitors are the first to say that being a landlord of a house i multiple occupation isn’t easy nowadays because of the regulations that apply to HMOs and the consequences of not complying with them. In this article we look at whether you need a house in multiple occupation licence and the consequences to you and your business of failing to get one.

 

Online London based house in multiple occupation solicitors

For landlord advice on buy to let property portfolios and house in multiple occupation licencing issues call the landlord team at OTS Solicitors on 0203 959 9123 or contact us online. Appointments are available by phone or video call.

The online London property licence checker 

In November 2020 the mayor of London, Sadiq Khan, launched a new online tool to help private renters discover if their properly had been licensed by their landlord as a house in multiple occupation. The new London property licence checker was introduced to help tenants and renters quickly ascertain the status of their rented property although many landlords questioned the timing of the introduction of the scheme when:

  • Many landlords are already asking whether it was time to get out of the buy to let business 
  • There are different house in multiple occupation licensing schemes operating in the London boroughs making it tricky for landlords to understand the licensing requirements for houses in multiple occupation
  • There is the impact of the global COVID-19 pandemic related legislation designed to protect tenants from possession proceedings.

You may question why an online London property licensing checker regime is necessary when surely both a landlord and a tenant would know, by the number of bedrooms at the house, whether the property the landlord is renting out or the tenant is living in is a house in multiple occupation. If only things were that straightforward. There are over thirty-five licensing schemes in operation across London. That makes it hard for landlords and their agents (as well as renters) to understand the rules relating to the licensing and definition of houses in multiple occupation.

HMO solicitors say that you would expect that there would be a national definition of what is a ‘house in multiple occupation’ but there isn’t as although the government sets out what is generally considered to be a HMO it refers to the need to check with individual councils to see if a property is caught by a different definition of a house in multiple occupation. 

When does a landlord need a HMO license?

The government defines a house in multiple occupation as a:

  • Property rented out by at least three people and 
  • The people aren’t from the same household and 
  • The renters share facilities, for example, a kitchen or bathroom.  

A large HMO is defined as a:

  • Property that is rented out to five or more renters and they form more than one household and 
  • The tenants share kitchen or bathroom or toilet facilities and 
  • At least one renter pays rent or their employer pays the rent on their behalf.

If a landlord has a large HMO then you will definitely need a HMO licence but if you own a smaller property (rented out to at least three people who aren’t from the same household) then whether you need a HMO licence depends on the area where the property is located. This can get very confusing for buy to let landlords with property in different London boroughs as a separate HMO licence is required for each property and different rules apply on the definition and property requirements.

Therefore, although some HMO landlords concede that it is necessary to have an online London property licensing checker whilst there is no consistent regime and rules, they argue that an online checker simply entrenches the different approaches taken to HMOs between London boroughs and it isn’t right to rationalise what is plainly wrong and confusing for both landlords and renters.

Why is a HMO licence needed?

It is said that HMO licensing is required to maintain reasonable standards for those renters who share accommodation. However, neither HMO solicitors or landlords understand why different HMO licensing requirements apply depending on the London borough the property is located in as surely all renters deserve the same degree of protection and landlords need the certainty of a standardised system.

What happens if a landlord doesn’t have a HMO licence for a rented property?

It is all very well for the London property licensing checker to help renters check to see if a particular property does require a house in multiple occupation licence but what happens if a property should be licensed as a HMO and isn’t? HMO solicitors say it is best that landlords double check the HMO status of their property because the consequences of operating a house in multiple occupation without a licence are serious and include:

  • A fine – the civil penalty maximum is up to £30,000 for each offence.
  • An order (referred to as a rent repayment order) that rent paid by the tenants for the previous twelve months be repaid to them
  • A section 21 possession notice can't be served on the renters.

When so many Londoners are experiencing financial hardship and therefore unable to buy a London property or to rent a property on an assured tenancy, landlord solicitors question the wisdom of making HMO rules hard to understand and inconsistent, thus encouraging HMO landlords to query whether a buy to let property portfolio of houses in multiple occupation is really the best business model for them.  

Online London based house in multiple occupation solicitors

For landlord advice on buy to let property portfolios and house in multiple occupation licencing issues and your best options if you are facing HMO licensing penalties call the landlord team at OTS Solicitors on 0203 959 9123 or contact us online. Appointments are available by phone or video call.

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