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Stricter HMO rules: “awareness remains limited” claims top agent

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.

Poll: Do you agree? Do very few landlords understand new HMO rules?

PLACE YOUR VOTE BELOW

  • icon

    In my small market town in Somerset there are loads of privately run HMO's that are well and truly non-compliant, certainly unlicensed. Private landlords who put up ads in the local supermarkets or newsagents windows. Many of them are very well aware that they are behaving wrongly but choose not to learn about the rules which they are deliberately flouting, just winging it. They will not be brought to book until either there is a major problem such as a fire or Trading Standards and local Councils suddenly get lots more taxpayer funding so they can go and look for such people.

  • icon

    I don't think its so much about more funding. Councils should use the Civil Penalties under the Housing & Planning Act to fund their enforcement.
    What's need is better use of and Intelligence gathering.
    If you look at the information Council Tax, HMRC, Utility companies etc already hold, it shouldn't be that hard to compile a cross-referenced database to show who's renting to whom.

    S l
    • S l
    • 21 May 2019 12:03 PM

    unfortunately, in BANES, when they share information on landlords, other departments such as council tax will discriminate the landlord and refused to grant student exemption or single occupancy discount to landlords as if we got deep pockets just because we are landlords. With the improvement notice, maintenance, epc, niceic, gas cert etc etc, most of my properties are no longer making much profit and not viable to run as a prs. its not more funding the council needs. if they had not been so draconian and more informative and helpful to get landlords to get it right, maybe those rogue landlords would rather contact them to get help rather than avoid them

     
    S l
    • S l
    • 21 May 2019 12:24 PM

    make any phone calls to the eho office, wham, they come on you like a ton of bricks and on their way to get a caution interview with landlords and use any evidence obtained to sue landlords. They are not there to help you get it right. They love the powers go to their head and start as much criminal proceedings as they can to shove their powers to landlords face. Thats a fact. Someone was even bullied and signed a confession letter prepared by the eho on the basis that they wont sue him this time on the day of visitation. This is a signed confessions under duress that will be used against the landlord for the next mistake for thousands of pounds. so beware and bewarn

     
  • icon

    How worrying that in an article on confusion about HMOs you get he definition WRONG!
    No wonder so many Agents form HMOs and then fail to manage them under the required Regulations!

    In the Housing Act 2004 you will find that an HMO is formed when THREE persons (not five) comprising two or more households share facilities! And HMO so formed MUST comply with the Management of HMOs Regulations 2006. No ifs, no buts!

    Three and four person HMOs do not require a “Mandatory HMO Licence” but must nonetheless comply with all the same regulations for fire, fall and trip hazards and indeed all 29 hazards under the Housing Health and Safety Rating System. In certain Local Authority areas they may however need a “Selective Licence” or an “Additional HMO Licence.

    All five person HMOs require a “Mandatory HMO Licence”

    If you read this and realise your agency has created HMOs of three and four persons where you haven’t put in place HMO regulation compliance (putting yourselves and your landlord at risk of criminal prosecution) contact Landlords Defence to help get you and your landlords out of danger. help@landlordsdefence.co.uk

    S l
    • S l
    • 21 May 2019 12:28 PM

    if a letting agent can get it so wrong, imagine the individual landlords confusion. even a eho officer impose a single room size rule that was not even the law yet. thats how bad it is for the landlords. council can do whatever they want even when it is not the law yet and if you challenge it, you will get in trouble

     
  • icon

    Councils change the rules to suit. 3 persons not related in a 3 bed flat. For 5 years applied a licence cost £500. They inspected once in 5 years. I provided to them every yeat TA, Gas Cert, Elec Report. When they did inspect after 4 years they asked me to put in more smoke detectors, then said what i first had was ok. They asked for a break glass box holder door key to front door they installed. They asked that all doors to every room.were kept shut. This was a council block they are the FH. I asked if the rules the gave to me applied to their tenants next door below and adjacent, some with 5 persons living in, some 7. They said no. I insisted they apply same rules to their properties, they objected and i persisted. I reminded them of what councils caused, the biggest death toll in the UK. They agreed to apply same rules to their Properties. At 5 year end i applied for new licence, they said i didn't need one! Can you really make up these stories about conservative run councils. Stupid useless twits.

    S l
    • S l
    • 21 May 2019 12:08 PM

    you should forward this to the newspaper and go on facebook with it

     
  • icon

    Councils change the rules to suit. 3 persons not related in a 3 bed flat. For 5 years applied a licence cost £500. They inspected once in 5 years. I provided to them every yeat TA, Gas Cert, Elec Report. When they did inspect after 4 years they asked me to put in more smoke detectors, then said what i first had was ok. They asked for a break glass box holder door key to front door they installed. They asked that all doors to every room.were kept shut. This was a council block they are the FH. I asked if the rules the gave to me applied to their tenants next door below and adjacent, some with 5 persons living in, some 7. They said no. I insisted they apply same rules to their properties, they objected and i persisted. I reminded them of what councils caused, the biggest death toll in the UK. They agreed to apply same rules to their Properties. At 5 year end i applied for new licence, they said i didn't need one! Can you really make up these stories about conservative run councils. Stupid useless twits.

  • Paul Barrett

    Always makes me laugh.
    In an Additional Licencing area how are the Council able to determine that 2 of the tenants aren't in a relationship.
    What if they break up overnight and then get back together the next day?
    Will the Council be checking to see if beds are warm in the morning!!
    No LL in Additional Licencing areas will have 3 unrelated occupiers.
    It will ALWAYS be 2 households as a single and a couple.
    The Council can't prove otherwise.

    S l
    • S l
    • 21 May 2019 12:32 PM

    unfortunately, our magistrates are made up of lay persons who tends to lean towards those in authority and uniforms. Who do you think they believe when going to court?

     
  • icon

    Have gone on facebook and got letters in local paper, hence get no stupidness other then stealing of council tax.

    S l
    • S l
    • 21 May 2019 15:15 PM

    good for you steve, have you tried the national newspapers and local MPs? i did cited two people when i went to vote for local councillors as they were saying how good they are at suppressing the prs with all the new laws etc and i pointed out to them the consequences of their so call great new laws against landlord and hmo isssues. They went very quiet. They dont even know the word hmo. very vague ideas. needless to say, they stop talking to me

     
  • Paul Barrett

    With all the variabilities in the PRS I believe that like it or not a National LL licensing scheme is required.
    Abolish all other schemes.
    Charge perhaps no more than £100 per property for a 5 year licence.
    Any LL that lets without a license for a particular property be subject to sanction or fines etc.
    Potentially RRO.
    Very few LL would risk RRO by not having licences for their rental properties.

  • icon

    As Phil quite rightly pointed out this article is a little misleading, hopefully, I can add some further clarity. A section 254 HMO is defined as 3 or more tenants from 2 or more households, sharing facilities. However, the definition of an HMO stretches from 254-260 in the Housing Act 2004 and is quite complicated. The most complex being a section 257 HMO, which always seems to be brushed over and the risks are huge to landlords and freeholders.

    Not all 5 person HMOs require a licence, there are exemptions, one example -
    For an individual flat of 5 or more tenants, located inside a purpose built block of three or more self-contained flats, Mandatory licensing does not apply.

    Any oversimplification in property licensing compliance leads to landlords and agents being left at risk. Advice can be found by contacting admin@hmoserviceslondon.com

    We are trusted to carry out property licensing compliance by the best agents in the country and are expanding to meet the needs of our clients by the day.

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