Landlords take note: The rules for Houses in Multiple Occupation are changing
Some important changes regarding the regulations that govern the rules for Houses in Multiple Occupation (HMO) are about to come into force and any landlord – particularly those letting property to students – needs to be aware.
The Licencing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 (2018/221) (LHMO 2018) will come into force on the 1st October 2018 and will change the mandatory licensing requirements.
Under the current regime, if a residential property is home to more than one household with shared toilet, bathroom or kitchen facilities, it may need to be licensed as an HMO under the Housing Act 2004.
There are 3 types of license:
- Mandatory Licensing. Today local Housing Authorities (LHAs) must licence all HMOs that are three or more storeys high and home to five or more individuals that do not form a single household.
- Additional licensing. LHAs can, with discretion, extend a license to HMOs that are outside the scope of mandatory licensing by designating all or part of their districts as subject to additional licensing in relation to specified types of HMO. This is often implemented to cover smaller HMOs in an attempt to tackle poor housing conditions in the private rented sector.
- Selective licensing. LHAs also have discretion to broaden their licensing to include houses that are not HMOs by designating all or part of its district as subject to selective licensing.
However from 1 October 2018 the scope of mandatory licensing will widen. The number of storeys at the premises will no longer be relevant. Single and two-floor HMO’s will now potentially be required to hold a licence and any new licences will have to adhere to the new minimum room sizes:
- The floor area of any room in an HMO used as sleeping accommodation by one person aged over 10 years must not be less than 6.51 square metres
- The floor area of any room in an HMO used as sleeping accommodation by two persons aged over 10 years must not be not less than 10.22 square metres
- The floor area of any room in an HMO used as sleeping accommodation by one person aged under 10 years must not be not less than 4.64 square metres
- Any room in an HMO with a floor area of less than 4.64 square metres is not to be used as sleeping accommodation
As a result residential landlords may need to promptly re-assess whether their properties need to be licensed. If a new licence is required, landlords must apply for that licence before 1 October 2018 so they can legally continue to rent out the property fully licensed under the new directives.
If your properties include purpose built flats (with up to two flats in the block and with one or both of the flats are occupied by 5 or more persons in 2 or more separate households) they will also now come under the mandatory licensing requirement.
This will apply regardless of whether the block is above or below a commercial premises which means flats above shops will now fall under mandatory licensing in line with small blocks of flats that are not connected to commercial premises.
The changes will be implemented in two phases. Phase 1 will last for 6 months starting on 1 October 2018. LHAs will publicise the new licensing regime, process applications and issue licences and landlords who don’t require an HMO licence before the change in the rules will not be prosecuted during phase one for failure to license an eligible HMO.
However, landlords will be expected to apply for a licence during the 6 month grace period and will not be able to serve valid section 21 notices seeking possession if they have not applied for a licence if one is required ( unless an exemption has been sought). Once the 6 month period is over and phase two commences, any landlord without a licence will be subject to the full range of penalties for failing to comply.
Many LHAs are currently offering discounts for early adoption of a licence and some are also offering a discount to accredited landlords so if you are a landlord we’d suggest you in investigate the changes so you can act as quickly as possible.
If you would like to discuss whether your residential or student let properties will be subject to the new HMO licencing requirements please call James Alger on 0114 2765555 or email James at firstname.lastname@example.org