Six months on from the introduction of stricter licencing for Homes in Multiple Occupation, awareness “remains limited” according to one of the best respected agents in the industry.
Lisa Simon, head of the residential division at Carter Jonas, has written a ‘state of the sector’ report on the new regulations six months on.
By definition, HMOs comprise at least five unrelated tenants who form at least two households and who share bathroom and/or kitchen facilities. Smaller house shares of three unrelated tenants can also be subject to licencing, according to the jurisdiction of local councils.
To gain a license, landlords must now pass a ‘fit and proper’ test as well as providing proof of compliance with fire safety regulations and provide tenants with a written statement of the terms of their occupancy. The rules were widened on October 1, removing a minimum three storeys requirement whilst new conditions on minimum room size and waste collection were imposed.
Simon writes: “While our clients have worked hard to obtain licences, with some needing to adapt or improve properties to ensure compliance, many from across the industry are operating without a licence, unaware that legislation applies to them.”
She says that in some cases, this may be because many have found themselves responsible for HMOs “by circumstance rather than design” as their portfolios, properties and tenants have changed over time.
Simon suggests that in general the councils responsible for licensing have helped individual applicants understand their responsibilities but she warns that a small number have used the wider regulations to attach additional localised conditions.
“Indeed, we have witnessed cases in which councils have requested that fire safety is prioritised. In practice, this has included emergency lighting, smoke alarms and fire doors. Meanwhile, other examples have involved the installation of more bathrooms.”
Concern over the policing of the new HMO regs and the publicity - some believe lack of publicity - surrounding their introduction has been heightening in recent months.
Shortly before Christmas figures obtained by Simple Landlords Insurance revealed that the majority of local authorities didn’t know how many unlicensed HMOs were in their area, let alone their addresses.
The findings revealed that the rules were, in the words of one HMO licensing expert,“practically unenforceable.”
Here is Lisa Simon’s summary of the state of play in full:
Six months on from the introduction of licencing that regulates Homes for Multiple Occupation (HMOs), and awareness of the new laws remains limited.
While our clients have worked hard to obtain licences, with some needing to adapt or improve properties to ensure compliance, many from across the industry are operating without a licence, unaware that legislation applies to them.
By definition, HMOs comprise at least five unrelated tenants, who form at least two households and who share bathroom and / or kitchen facilities. Smaller house shares of three unrelated tenants can also be subject to licencing, according to the jurisdiction of local councils.
In the first instance, it goes without saying that HMOs have long since been a fixture of the lettings landscape. From student houses to flat shares amongst young professionals, they are a commonality.
However, it has come to light that many landlords and estate owners have found themselves responsible for HMOs by circumstance rather than design.
While the new legislation has almost gone under the radar, it has been effective since 1st October 2018, and regulates the safety and standards of HMOs, whether residents are permanent or temporary, short or long-term.
Licences can be obtained through the local council, and are likely to be granted if:
1 The property in question is suitable for the number of occupants
2 The property manager – whether the owner or an agent – is considered to be ‘fit and proper’, e.g. with no criminal record or breach of landlord laws or codes of practice
Minimum room standards must comprise:
1 Usable floor space of more than 6.51 sq metres if letting a room to a single adult
2 Usable floor space of more than 10.22 sq metres if letting a room to two adults
It is likely that an HMO licence will limit the number of individuals who can occupy a specific room as sleeping accommodation.
For a licence to be upheld, landlords or managing agents must:
1 Send the council an updated gas safety certificate every year
2 Install and maintain smoke alarms
3 Provide safety certificates for all electrical appliances when requested
Generally, councils have been user-friendly and will offer guidance on what measures must be implemented for a licence to be granted. That said, councils are at liberty to add other conditions to a licence, such as improving the standard of an individual property’s facilities.
Indeed, we have witnessed cases in which councils have requested that fire safety is prioritised. In practice, this has included emergency lighting, smoke alarms and fire doors. Meanwhile, other examples have involved the installation of more bathrooms.
If an application for an HMO licence is declined, there is scope to appeal to the First-Tier Tribunal, albeit this incurs an additional fee set by the relevant council.
Legally, councils can carry out spot checks and enforce an unlimited fine for failure of compliance, so due diligence is recommended. We are aware of two examples in which penalties were particularly acute, with one landlord in Brent, Greater London, who was fined £30,000 plus costs for letting an undersized room. Meanwhile, another landlord in the West Midlands was fined £180,000 for letting four unlicensed HMOs.
But by no means should the legislation result in panic; if you’re unsure or think you might be responsible for an HMO, the best course of action is to seek professional advice at the first opportunity and tackle the issue head on.