HMO changes - Are you ready for 1st October?
Changes to HMO licensing in England and Wales from 1st October 2018 mean that in excess of 170,000 landlords will need a licence to let out their HMO (House in Multiple Occupation). The rules are tough, some even say draconian, but there will be no avoiding them and if you are caught trying the fine could be up to £20,000.
In essence the changes will broaden the definition of what type of property falls under an HMO. Currently not all HMO properties need to be licensed but one where there are 5 or more people from more than one household, is at least 3 storeys high and the tenants share a common facility do. From 1st October the '3 storey' criteria will be removed shifting a vast number of shared housing into licensable status.
The Residential Landlords Association estimates that 177,000 additional landlords will require licences as a result. There are also new minimum room sizes for licensable properties but these will vary from Local Authority to Local Authority.
Landlords who already have a licence may be granted 18 months to make the necessary changes when it comes to the renewal. Landlords seeking an HMO license will also need to meet other criteria. One is showing that the house is suitable for the number of occupants. Aside from the size of sleeping areas, the Local Authority will consider the home’s shared facilities and its current condition.
In some cases, Councils may impose conditions on your licence, such as improving the standard of the property. As the landlord, you or your managing agent also need to be a ‘fit and proper’ person to hold a licence, which means you have no criminal record and no prior breaches of landlord regulations. In addition, you’ll need to provide a current gas-safety certificate, install smoke alarms and have safety certificates for appliances.
All landlords also need to comply with other regulations, including maintaining the property in a safe condition, putting the deposit in a registered scheme and carrying out Right to Rent checks on tenants. As of 1 April, you’ll also need an Energy Performance Certificate for your property with a rating of at least E – properties rated F or G can no longer legally be let out.
If you wish to discuss anything further regarding this article please feel free to get in touch with me.
Alex Britchfield | Partner | Davies & Partners