Some landlords are continuing to fall foul of the law by not realising or ignoring the fact that they are effectively an HMO landlord and need a licence. The problem is that there are some landlords who have no idea that they are HMO landlords. It could be that they are renting out a property to students or a group of working friends who have signed the same tenancy agreement rather than the individual HMO agreements. According to the law, this is a House of Multiple Occupancy if there are three or more tenants and two or more households – that is, they are not related and are not, therefore, treated as being part of the same household as far as the law is concerned.
Non-compliance can lead to hefty fines under the Housing Act. Just recently, Filip Barbacaru, Director of Easy Residence Ltd, admitted not having a mandatory licence and was fined more than £8,165 including costs at Wrexham Magistrates’ Court. His HMO was occupied by 22 tenants. As the proeprty was over three storeys, including an attic conversion, and occupied by more than five tenants forming two or more households, it should have had a mandatory licence. London landlord Amit Sharma was ordered to pay £4,485.17 by Birmingham Magistrates after admitting he failed to obtain an HMO licence and a breach of HMO management regulations designed to protect his student tenants at a property in Selly Oak.
According to the government guidelines, if you rent out your property as a HMO to at least three people who are not from one family but share facilities such as the kitchen, toilet and bathroom, then it is a HMO. If it is a large HMO rented to at least five people who form more than one family, the property is at least three storeys high and it has shared facilities like the bathroom and kitchen, then you must have a licence. Even if the property is smaller or there are fewer tenants, you may need a licence in your particular local authority area, so it is always worth checking with the council.
Remember that the licence is only valid for a maximum of five years, so you’ll need to keep a record of the date when you need to get a new licence. You have to renew your licence before the existing one runs out and you need a separate licence for each HMO. The house needs to be suitable in terms of size and facilities for the number of tenants and the landlord or agent has to be considered a ‘fit and proper’ person to hold a licence. Some buildings which have been converted into flats are also considered to be HMOs if they do not comply with the Building Regulations 1991, or at least one-third of the flats are rented on leases which are less than 21 years. A property can also be an HMO for council tax purposes, even if it not an HMO for licensing purposes.