HMO stands for House in Multiple Occupation. A property is classed as a House in Multiple Occupation when it holds multiple parties with shared facilities. Shared facilities include a shared garden, bathroom, kitchen, other communal areas.
Landlords may choose a House in Multiple Occupation rather than renting to a single party as there is potential for higher rent. When using House in Multiple Occupation the owner will be able to take on more tenants. But they will also have more responsibilities for one property. They may view an HMO as an efficient way to manage multiple tenants when compared to renting out multiple properties which hold single parties.
Some buildings are optimised for HMOs, such as student accommodation. The landlord gets benefit as they can hold more tenants and get higher yield. Whereas, the tenants may choose the property as they pay less as their facilities are share with multiple occupants
The Housing Act 2004 supersedes the Housing Act 1985. The Housing Act 2004 Part 7 defines the legal definition of a HMO. A property is defined as a HMO if it falls under one of the following;
A property where more than one household shares some facilities.
A property which has been rebuilt but does not hold fully independent apartments.
A property which has been declared HMO by authorities.
Or where converted property does not mean relevant standards and less than two-thirds of the rooms are occupied by the owner. This is a section 257 HMO.
Licenses for HMO
When letting out a property which is a HMO, the owner is required to be permitted with a HMO license. The most recent requirements for HMOs were updated in October 2018. If a house or property holds 5 or more parties it is typically classed as a large HMO, in this situation a different license called a large HMO license is required. Landlords can contact their local council to determine which license they require. The landlord is required to apply for a HMO license every 5 years. It is a requirement that each HMO property has a license, so if a landlord has multiple HMO properties that need a separate license for each property.
HMO Safety Compliancy
Along with a license the landlord also needs to follow standard regulations, such as ensuring gas inspections are carried out and getting gas certificates, similarly ensuring required electrical safety inspections are carried out and EICR certificates are obtained. The landlord must ensure they follow rules relating to fire safety such as the correct smoke detectors. Fire protection should be a focus. Smoke detectors must be maintained. The authority should be provided relevant safety certificates up on request. Door security, emergency lighting and pest control are some other measures which may need to be addressed.
Do I need to convert my house for it to be a HMO?
If the house or property is not currently suitable or doesn’t pass the requirements for a HMO then it may need to have some conversions. A house in multiple occupation is required to be habitable. The tenant should have enough space in the property to live comfortably. There are also rules for equipment, household appliance and furniture which need to be adhered to
If you believe your property is read to be a HMO, you can apply with your local council. They should conduct a risk assessment. They will ensure that your property follows Health and Home Safety System guidelines. The risk assessment will ensure you follow safety regulations. The risk assessment covers, fire regulations, asbestos, water management and more.
A permit will be granted once the property passes legal requirements.
Declaring your property an HMO
The local council or authority may declare the property as HMO once they are satisfied the property meets criteria. A HMO certificate is issued which confirms that the property is permitted to be house in multiple occupation.
The certificate can be revoked if the council or local authority believe the property isn’t meeting the criteria to be classed as an HMO.