Under the Housing Act 2004, larger HMOs (Houses in Multiple Occupation) that are 3 or more storeys and occupied by 5 or more persons forming at least 2 separate households are required to be licensed.
With effect from 1 October 2018 mandatory licensing of HMOs will be extended so that smaller properties used as HMOs in England which house 5 people or more in 2 or more separate households will in many cases require a licence. The three storey rule has been abandoned.
If your property is one of the 170,000 or more thought to be caught by this change in the rules then you must have applied for a license before 1 October 2018. That means, if you have not done so yet, you may have a problem.
To meet the criteria, you must make sure that;
- the house is suitable for the number of occupants (this depends on its size and facilities)
- the manager of the house – you or an agent – is considered to be ‘fit and proper’, for example they have no criminal record or breach of landlord laws or code of practice
You must also:
- send the council an updated gas safety certificate every year
- install and maintain smoke alarms
- provide safety certificates for all electrical appliances when requested
The new rules also make provision to set a minimum size criteria but at the time of writing a nationwide size criteria has not been applied.
It’s important that you meet the new regulations because failure to become a licensed Landlord may result in your Local Authority effectively adding you to a ‘blacklist’. In other words, a list of proscribed Landlords that may not let HMOs as they are not considered to be ‘fit and proper persons’.
The changes may also mean that your property has been redefined as an HMO, something that may technically breach your current mortgagee’s terms and that of your insurers. It is important that you address this as soon as possible.