Houses of multiple occupation: get a licence!

Updated March 2011

The legislation regarding houses in multiple occupation (HMO) has been around for some time now and has an important role in regularising the private rented sector. As a result of recent changes to the planning requirements for HMOs they have become a hot topic for Councils and Landlords. Failure to comply with the provisions of the Act has both criminal and civil consequences, with possible fines up to £20,000 for landlords operating an HMO without a licence.

Background

HMOs are dwelling houses used by three or more unrelated people who share basic amenities such as a bathroom and a kitchen. They are generally three stories high.

A licence should always be held by a landlord when renting an HMO. The licence is personal and is non-transferable; a receiver for example, cannot "step into the shoes" of the existing licence holder and must apply for a fresh licence. Each authority has its own licensing procedure and charges its own fees for producing and for terminating a licence. Whilst a licence is in place, a landlord will continue to be liable for all the conditions to ensure that appropriate standards are met.

If a landlord who controls or manages an HMO is taking steps to secure that the house is no longer required to be licensed, they can apply to the local authority for a 'temporary exemption notice' which will last for three months.

Failure to comply with the provisions of the Act has both criminal and civil consequences. If a landlord operates an HMO without a licence they could face a maximum fine of £20,000. Civil sanctions can include being required to repay rent received from tenants while the HMO was unlicensed, being precluded from ending tenancies or bringing proceedings to obtain possession of the property and even having to repay housing benefit.

Planning requirements

In addition to ensuring that licensing obligations are met, landlords must also ensure that they comply with planning requirements.

Prior to 6th April 2010, no planning permission was required for a change of use from a regular dwelling house to an HMO for up to six unrelated people. However, from 6th April 2010, this changed and planning permission was needed for a change of use from a dwelling house to a small HMO (3-6 unrelated people). The huge administrative burden this would cause for local planning authorities meant that this position did not remain for long and in October 2010 the situation was reversed so that, again, planning permission was not required. Local planning authorities do, however, have the power to change the position in their area and require planning permission if, for example, they find that the large number of small HMOs are causing problems in the locality.

Contributor: Victoria Jacobs

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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