Changes to licensing of shared houses

Under the Housing Act 2004, an ‘HMO’ is defined as a rented property where basic facilities such as a kitchen or bathroom are shared by at least 3 people who are not from 1 ‘household’ (i.e. family). A building will also be an HMO if it is a poorly converted block of flats and less than two thirds of the flats are occupied by owners.

Currently, your property will be an HMO if both of the following apply:

1. At least 3 tenants live there, forming more than one household; and
2. Toilet, bathroom or kitchen facilities are shared.

You will be required to have a licence if you are renting out a property if all of the following apply:

1. The property is more than three storeys high;
2. The property is occupied by five or more people; and
3. The occupiers share toilet, bathroom or kitchen facilities.

Local authorities have a discretionary power to impose additional licensing on other categories of HMOs in its area which do not fall under the mandatory licensing; so, even if your property is smaller and rented to fewer people, you may still need a licence depending on where the property is situated. The local authority can do this if it considers that a significant proportion of the HMOs are being managed ineffectively and are giving rise to particular problems, either for the occupiers of the HMOs or members of the public due to poor management.

Landlords and prospective landlords of HMOs should be aware that, following consultation last year, the Government are implementing changes which will extend the scope of the HMO mandatory licensing later this year. This will mean that all houses, regardless of the number of floors, which are occupied by five or more people from two or more households, will be caught. Flats above and below business premises will also be caught by the new mandatory HMO licencing rules. In addition the proposals impose a national minimum room size for HMOs of 6.52 square metres as well as requirements for the licence holder to provide adequate rubbish disposal facilities.

A landlord or their managing agent is required to obtain a licence for each property owned. Normally a licence lasts for a maximum of 5 years although in some circumstances a council may grant a licence for a shorter period if it considers it necessary. The licence must be renewed before the licence expires. Renting properties without a licence is a criminal offence and can result in prosecution and/or an unlimited fine.

Comment

Landlord and tenant law is becoming increasingly complex and it is essential that a landlord takes advice before letting a property for the first time.

For further information relating to the points raised in this article, please contact Sarah Rob Cooke. Alternatively, contact a member of the Property Disputes team.