Introduction - if you require a landlord building insurance quotation for a House in Multiple occupation, we will be able
to assist you but you will need to frequent yourself with the new rules and
regulations relating to this sector of the market. These notes are for guidance
only. Under the changes in the Housing Act 2004, ( England & Wales)( The
Legislation came in to force on 6th April 2006) if you let a property which is
one of the following types it will be considered a House in Multiple occupation
and you will be required to obtain a license. Failure to do so could result in a
fine of up to £20,000. The laws are fairly complex and the information on this
page must only be used as a general guide. It is essential that you contact your
Local Authority ( if you are in any doubt as to whether you own or operate a
House in Multiple occupation, you should contact them anyway) regarding
licensing, they will be able to advise you of the costs etc. It must also be
remembered that Local Authorities can react to local issues and you may find
that rules for HMOs change from area to area. The main points are as
follows:-
An entire house or flat which is let to
3 or more tenants who form 2 or more households and who share a kitchen,
bathroom or toilet. For the purpose of licensing, a household is defined as the
same family who live together whether married or not including relatives and or
half relatives, fostered and adopted children.
A house which has been converted
entirely into bed sits or other non-self-contained accommodation and which is
let to three or more tenants who form two or more households and who share
kitchen, bathroom or toilet facilities.( Self contained can be defined as a
portion of accommodation which enjoys its own private use kitchen(or other
designated cooking area), bathroom and toilet. If a tenant needs to leave this
portion of accommodation to access such facilities then it will not be
considered as self contained.
A converted house which contains one or
more flats which are not wholly self contained (ie the flat does not contain
within it a kitchen, bathroom and toilet) and which is occupied by3 or more
tenants who form two or more households.
A building which is converted entirely
into self-contained flats if the conversion did not meet with the standards of
the 1991 Building Regulations and more than one-third of the flats are let on
short-term tenancies.
In order to be classed as an HMO the
property must be used as the tenants’ only or main residence and it should be
used solely or mainly to house tenants Properties let to students and migrant
workers will be treated as their only or main residence as will properties which
are used as domestic refuges etc.
Local Authority Guidance - the rules are
fairly complex and another factor that needs to be taken in to consideration is
the number of stories in the Building and how many are let, your local authority
will be able to provide you with help and guidance and as stated above if you
are in any doubt, is is safest to contact them anyway. If your property is a
purpose built block of flats, all self contained then it is not a HMO, however,
an individual flat within the block maybe if it is let to three or more tenants,
this scenario is not subject to mandatory licensing but may be subject to more
local legislation
Why has this Legislation been introduced? - Houses in Multiple occupation
are a valuable source of accommodation usually on a more affordable basis that
self contained accommodation. The laws are intended to make sure that property
has a decent standard of management thus benefiting not only the tenants of the
building but the community in general. Badly managed property can have the
effect of driving down local property prices which of course is not good news
for those landlords that do run properly managed buildings.
Will I be able to obtain a license? - There are a number of factors that
are taken in to consideration when granting a HMO license.
-
The property license holder and any manger are fit
and proper persons
-
Property Management standards are being applied to
the building
-
The proposed House in Multiple occupation is
reasonably suitable or can be made suitable for occupation taking in to
consideration also the proposed number of tenants. Your local authority will
take in to consideration, the number of bathrooms./kitchens.
How to I apply for a license? - again, you
need to contact your local authority, they will have an application form and
will be able to inform you of the rules and regulations relating to your
particular area. They will also be able to discuss the costs with you. As a
Landlord you of course have the right to know how the fee for a particular
building has been arrived at guidance has been obtained on this matter by the
Chartered Institute of Public Finance & Accountancy, basically your Local
Authority will be able to give you transparency on any fees. It most cases you
should apply to the Housing or Environmental Health Department of your local
Authority.
How long will the Application Process Take? - the length of the
application process will depend on a number of factors such as the circumstances
of each property or the total number of applications that the local housing
authority are dealing with at the time. Provided that a landlord has submitted a
valid application, the HMO can continue to operate legally until the local
housing authority reaches its decision and any appeals against that decision are
exhausted. However, the property may need to be inspected before a license will
be granted to you.
Is the License for the Owner of the manager of the property? - the
landlord may hold the license or nominate someone else such as a manager or
agent to be the license holder. If you wish to appoint someone else, you will of
course have to obtain their permission and they will have to be considered a fit
and proper person to hold such a license. A license may not relate to more
than one property and is not transferable to a different property, or to a
different person.
How long is a HMO license valid for? - a HMO license is usually valid for
5 years and your local authority will be able to confirm the exact period.
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