A house in multiple occupation, or a “HMO”, is a residential property which houses several different people on different tenancy agreements. Planning permission must be granted for a property to be turned into a HMO with the use class needing to be changed from the usual C3 for dwelling houses into C4, which is the class specific for houses in multiple occupation.
A HMO is defined as being a property which is rented out by at least 3 people who are not from 1 household and where some facilities, such as a bathroom or kitchen, are shared by the tenants.
In addition to planning consent for the change of use, the owner must, in certain circumstances, have a licence to operate the property as a HMO, where the property is defined as a “large HMO”. A large HMO is defined as the following, and in these circumstances, property owners must hold a licence from the council:
If the property is three or more storeys high and
If the property has five or more people in more than one household and
If the tenants share amenities such as bathrooms, toilets and cooking facilities
In addition to this, changes brought in on the 1st October 2018 mean that any HMO’s housing more than 5 tenants which form two or more households, who share some joint facilities, will require a licence irrespective of the number of storeys in the property. Furthermore, purpose-built flats with up to two flats in block where those flats are occupied by five or more people will also require the owner to hold a HMO licence.
Even if a HMO does not fit with the criteria above, some councils may still require that the owner holds a licence and therefore it is important to check this with your local council.
It is also important to note that the licences cannot be transferred and therefore, as a buyer, you will require your own licence to operate the property as a HMO. This will be required from completion and, without it, the property cannot continue to operate as a HMO. If you do operate an unlicensed HMO, you could be served with an unlimited fine.
In addition to holding a HMO licence, the owner of the property is required to send the council an updated gas safety certificate every year and install and maintain smoke alarms throughout the property. Additionally, safety certificates for all electrical appliances must be produced when requested.
For advice on your legal obligations when buying or leasing a HMO, please get in touch with Farleys’ property team on 0845 287 0939 or contact us by email.