What is an HMO?

Under the Housing Act 2004, a property is classified as an HMO if three or more tenants from two or more households live there and share basic facilities such as a kitchen or bathroom. A "household" is typically defined as members of the same family, such as couples, parents and children, or siblings.

HMOs vary widely, from shared houses occupied by students or young professionals to bedsits where tenants rent individual rooms and share communal areas. While all HMOs must meet specific safety and management standards, licensing requirements depend on the property size, the number of tenants, and local rules.

When is an HMO license required?

In England, an HMO licence is mandatory if the property meets all of the following criteria:

• It is rented to five or more tenants.
• Those tenants form more than one household.
• They share facilities like a bathroom, toilet, or kitchen.

If you rent a property to three tenants, mandatory HMO licensing under national rules does not usually apply. However, smaller HMOs may still require a licence if the local council operates an "Additional Licensing Scheme." These schemes enable councils to impose licensing requirements on properties that fall outside the mandatory threshold.

Local authority rules: additional licensing

Local councils often introduce additional HMO licensing schemes to regulate smaller properties that meet the definition of houses in multiple occupation. These schemes are designed to address issues such as overcrowding, property maintenance, and poor management practices, improving standards for tenants in multiple occupation regulations.

Unlike selective licensing, which applies to all private rented properties in a specific area, additional HMO licensing targets properties that require more oversight due to their shared living arrangements. Smaller HMOs often fall under these local schemes, so it’s essential to confirm whether your property is affected.

To determine whether your property requires a licence under these schemes:

• Contact your local council: many councils provide clear guidance and online tools to help landlords identify whether their property falls under additional HMO licensing. By entering your property details into these resources or speaking directly with the housing team, you can find out if your council requires a licence for houses with fewer than five tenants.
• Research licensing fees and processes: if your property is subject to additional HMO licence requirements, you will need to familiarise yourself with the application process. This typically involves:

• Understanding the fees, which vary depending on the council and the size of the property.
• Preparing documentation to meet licensing conditions, such as an updated gas safety certificate, electrical installation reports, and evidence of fire safety compliance.

• Review ongoing conditions: licences granted under additional HMO licensing schemes often include specific conditions that landlords must meet throughout the licence term. These may involve regular inspections, meeting property standards for shared spaces, and ongoing safety checks to align with multiple occupation regulations.

What happens if you need a license but let an HMO without one?

Letting an HMO that requires a licence without obtaining one can lead to serious consequences. These may include:

• Fines of up to £30,000 per offence.
• A Rent Repayment Order, requiring repayment of up to 12 months' rent.
• Criminal prosecution for repeat offences, which can result in unlimited fines.
• Ineligibility to serve a Section 21 eviction notice, which may affect your ability to regain possession of the property.

These outcomes underline the importance of checking licensing requirements before letting out an HMO.

Steps to determine whether you need an HMO licence

Determining whether your property requires an HMO licence involves understanding your tenants’ living arrangements, the relevant regulations, and the steps needed to comply with legal requirements. The following steps provide a clear process to guide you:

Assess your property’s occupancy

Begin by evaluating the number of tenants residing in the property and their relationships to one another. If three or more tenants live in the property but belong to separate households, it meets the basic definition of an HMO. Households typically consist of families, couples, or individuals living together as a unit. For example, three unrelated tenants sharing a house would count as three households.

Review local licensing requirements

National regulations mandate HMO licensing only for properties with five or more tenants. However, local councils can implement additional licensing schemes for smaller HMOs, including those with three or four tenants.

• Visit your council’s website to check for any additional licensing requirements that may apply in your area. Many councils provide online tools or guidance to clarify whether a specific property falls under these schemes.
• Alternatively, contact the council’s housing team directly for personalised advice on local regulations.

Apply for an HMO licence if required

If your property requires a licence, you must submit an application to your local council. This process typically involves:

• Property details: providing information about the property, including the number of tenants, shared facilities, and floorplans.
• Safety documentation: submitting proof that the property meets safety standards, such as gas safety certificates, electrical safety reports, and fire risk assessments.
• Management information: demonstrating that you or your appointed manager can oversee the property responsibly.
• Fees: paying the applicable licensing fee, which varies between councils and may depend on the size or type of HMO.
  Applications often require time for review, so it’s best to submit all documents promptly and accurately.

Comply with licensing conditions

Once an HMO licence is granted, landlords must meet ongoing requirements to maintain compliance with housing standards and protect the safety and well-being of tenants. These requirements form an integral part of the mandatory HMO licence requirements and are enforced by local councils to uphold minimum standards for Houses in Multiple Occupation.

Fire safety

Fire safety is a central focus for licensed HMOs. Landlords are required to install and maintain working smoke alarms on each floor, provide fire extinguishers if specified in the licence, and fit fire doors where appropriate. These measures help reduce risks and contribute to safer living conditions for tenants. Regular checks should be carried out to confirm that all fire safety equipment remains in good working order, and any identified issues should be addressed promptly.

Room sizes

All bedrooms and communal spaces must meet the minimum size requirements set out by housing standards. For example, a single bedroom must typically have at least 6.51 square metres of usable floor space, though specific requirements may vary by council. Meeting these room size standards helps to avoid overcrowding and supports tenant comfort.

Shared facilities

Kitchens, bathrooms, and other communal spaces should be kept in good condition, with repairs carried out as needed. These areas must be appropriate for the number of tenants in the property, with adequate facilities such as sinks, cookers, and toilet access. Routine inspections and timely maintenance are important to maintain habitability and prevent disputes.

Updated gas safety certificate

An updated gas safety certificate is a legal requirement for all rented properties with gas appliances, including licensed HMOs. This certificate must be renewed annually by a Gas Safe registered engineer and should be readily available for council inspections. Maintaining up-to-date gas safety documentation demonstrates compliance with health and safety regulations, protecting both tenants and landlords from potential issues.

Property management

Landlords are expected to respond to tenant concerns, handle complaints efficiently, and keep the property in good order. Regular communication with tenants and prompt attention to maintenance requests help to maintain a positive rental experience.

Expert advice from AST Assistance

AST Assistance supports landlords across the UK in understanding and meeting their responsibilities for HMO compliance. Our team can help you assess whether your property requires a licence and offer tailored advice on managing HMOs in line with local regulations.

For further support, contact AST Assistance on 01706 619954 or complete our contact form. Let us help you stay informed and compliant while managing your property effectively.