Houses in multiple occupation (HMOs) the basics

Landlords who rent out their properties often face complex legal responsibilities. If you currently let a property, do you know if it is an HMO? Are you aware of the current definition of an HMO and the associated regulations that go with them?

If not and you do have an HMO property, you may need to adhere to strict regulations related to health and safety, and in certain cases may require a license from the local council. Failure to follow these procedures could lead to fines being incurred of up to £20,000 as an owner. 

By getting to grips with the basics of HMOs explained briefly below, you may be able to avoid landing in any tricky legal situations.

 

What is an HMO?

The Housing Act of 2004 defines an HMO as a property occupied by more than one household and three or more people who share a kitchen, bathroom or toilet. This may include bedsits, shared houses and some self contained flats.

In order to be an HMO the property in question must be used as the tenants’ only or main residence. This applies to properties let to students where the person’s residence is for the purpose of undertaking a full-time educational course.

What is a household?

“Household” can have a few meanings. An individual living by themselves is considered one household. Members of the same family or a couple who are living together are also only considered to be one household.

So for example four unrelated friends sharing a property together are considered four separate households. If a couple are sharing with a friend that would count as two households.

Do I need a license?

Here is where it gets interesting; an HMO does not necessarily require a license. There are two types of license; mandatory and selective. A mandatory license is needed for a property with:

three storeys or more (including usable basements or attics)
The property is occupied by five or more people who form two or more households
Throughout the UK, local councils have appointed selective areas and streets where properties will also require a license. Whether or not a license is required is dependent on the rules and regulations of the property’s local council so it is essential to know whether this is something that applies to your property.

Do I need planning permission?

For Greater Manchester, planning permission is required to rent out an HMO property. It is well worth checking the regulations with your local council. In Manchester, a ruling by the name of ‘Article 4 Direction’ was brought in in October 2011. This means that a landlord must first seek planning permission in order to let a property to three or more unrelated people unless the property in question was already in use as an HMO before October 2011.

HMOs and risk assessment

Risk assessments are a key part of all property checks, however with an HMO there are certain added safety assessments that are required and enforced by local councils. For example, an HMO property must have a mains, not a battery operated smoke detector, well fitting, solid internal doors, thumb turn locks (if there are locks on the doors) along with other safety features.

Do I have all the correct certification?

If you are the owner of an HMO the next question you should be asking yourself is do I have all of the necessary certification documents for the property?

Although not a standard requirement for a rented property, in an HMO property in Manchester, there are two main tests that are required and two certificates that you should keep safe at all times in case of an inspection by your local council. These two tests are:

A Portable Appliance Test (PAT test) – advised to be tested annually
A hard wired electrical test – recommended to be tested annually by a qualified electrician
 

If you own an HMO, are thinking of investing in one or you want to create an HMO from a property in Greater Manchester, it is well worth doing your research. It is important you are fully aware and up to date with all the responsibilities associated with an HMO owner.

While a property investment can bring with it many benefits, we also know first hand how tricky it can be to keep up with all the latest rules and legislation. It is well worth considering having your investment managed by experienced professionals. At homes4u we are HMO specialists and as part of our property management service we have a dedicated compliance team on hand to help answer any questions you may have about HMO’s and all types of property. Simply drop into one of our branches or give us a call.