June 14, 2021

The Different types of HMO licence

HMO. House in Multiple Occupation is a term that is used to define accommodation that is owned by a private landlord and shared among a number of people.

In this post, we look at different types of HMO licence.  There are a range of different types of accommodation that could fall under the HMO definition.  This is dependant upon how many people are living there and what the living arrangements are. Some HMOs require a license – not all. It will normally be required where:

  • the HMO is at least three storeys high;
  • where there are at least two distinct households living there;
  • and in total there are five or more unrelated people living in the HMO building.

The Different types of HMO licence: Mandatory licences

Landlords with certain types of shared homes have been required to comply with licensing since 2006.  This was when the legislation was introduced to replace a registration scheme that was originally part of the 2004 Housing Act.

where a property is classed as an HMO it needs to be licensed by the Local Authority. In the majority of cases, the landlord must pay a fee. To ensure there are no health and safety risks, the property must be inspected before the licence is granted. An ongoing requirement is that the landlord must provide the Local Authority with copies of annual gas safety certificates, conduct electrical safety tests, and install smoke alarms on each floor. Additionally, if any rooms have a coal fire or wood-burning stove they must have a carbon monoxide alarm.

However, on 1st October 2018, the definition of an HMO changed. Therefore landlords who rent a property to five or more residents from two or more separate households are now subject to mandatory licensing. If the property is either a leasehold or has a mortgage against it, then the landlord is required to seek permission from the leasehold owner and/or mortgage provider.

The landlord will also need to provide information about the licence to the tenant. Plus, where a landlord has failed to comply with the new licensing regulations, then they will be unable to serve a Section 21 notice should they wish to regain possession of the property.

Selective Licensing

As with the Mandatory HMO licensing, Selective Licensing was introduced in 2006. Selective Licensing was aimed at providing Local Authorities greater powers to address the impact of poor-quality private landlords and anti-social tenants. These licences were initially believed to be positive as they were aimed at raising standards so that tenants could enjoy living in quality homes.

As with HMO licences, landlords with properties in areas with selective licences need to apply for a licence before they are able to rent out a property. This grants the Local Authority the powers to check if the property is up to scratch and that the landlord is appropriately managing the let property.

It was always expected that the number of Local Authorities with a selective licensing scheme would be limited, however, the number of councils opting to have a licensing scheme has grown substantially.

Because the financial penalties could prove crippling to a landlord, it’s vital that landlords find out whether they are in an area that currently has – or is considering launching – a licensing scheme. However, this information isn’t necessarily easy to find out. There is no publicly available central database and so for many landlords, it is a very time-consuming process to understand the risk they face.

We hope that you have found this post on The Different types of HMO licence useful.  If you’re a landlord looking for advice when it comes to HMO licensing, we’re here to offer advice. Contact us today to find out more.

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