Multiple occupancy homes

Houses in Multiple Occupation (HMO’s) provide an important supply of housing, often to vulnerable households. Research has shown that tenants living in a HMO can be adversely affected by the actions of another occupant, therefore, it is essential that high standards of management are in place.

Historically the HMO sector has shown to have the poorest housing conditions when compared to other types of housing. There is signiﬁcantly a higher risk of death from ﬁre in a property comprising of bedsits when compared to an ordinary family dwelling (six times). This risk increases to 16 times within such properties of three or more storeys.

What is an HMO ?

A House in Multiple Occupancy is defined as a property comprising of 3 or more unrelated persons in two or more households who may share amenities such as bathroom, toilet and cooking facilities. This also includes properties which have been converted into self-contained flats which do not meet the 1991 Building Regulations and at least one third are occupied under short-hold tenancies.

The Housing Act 2004 has introduced the mandatory licensing of larger Houses in Multiple Occupation which are 3 or more storeys with 5 or more occupiers making up 2 or more households, and the option for local authorities to include smaller HMO’s as part of their additional licensing schemes.

Rochdale Borough Council has taken up this option and included its smaller HMO’s into their Licensing Scheme, ie 2 storey properties and properties with 3 or more individuals or households.

The Housing Act 2004 has brought in some important changes and HMO licensing is one of those areas of change. HMO Licensing is aimed at addressing these inherent risks in larger HMO’s and ensuring adequate management is in place to safeguard the health and wellbeing of tenants.

A HMO in terms of licensing

The Housing Act 2004 has recently redeﬁned what constitutes a House in Multiple Occupation (HMO) as a building or part of a building (such as a ﬂat) which:

Is occupied by more than one household and in which more than one household shares an amenity (or building lacks an amenity) such as bathroom, toilet or cooking facilities
Is occupied by more than one household and is a converted building which does not entirely comprise of self contained ﬂats (whether or not there is also a sharing or lack of amenities)
Comprises entirely of converted self contained ﬂats and the standard of conversion does not meet, the minimum, required by the 1991 Building Regulations, and at least one third of the ﬂats are occupied under short tenancies

Department for Communities and Local Government - more information.

What does a ‘household’ mean?

The Housing Act 2004 has also redeﬁned the term ‘household’. It now means that if individuals are not of the same family, either by blood, marriage or some other recognised means (for example fostering or adoption) they will be classed as separate households. For example, four individuals (for example student nurses) living together in a house who are not related would be four households.

HMO licensing

The criteria for licensing

The criteria for licensing are:

Mandatory licensing: will apply to HMO ’s with three or more storeys, occupied by five or more persons and who form two or more households
Additional licensing: can be introduced by local authorities (with government consent) to license smaller HMO’s where deemed necessary
Selective licensing: covers all private rented properties within a selective area designated by a local authority. The local authority must be able to show that the area is suffering from low demand and/or anti social behaviour

We will be introducing additional licensing to license smaller HMO ’s but we will not, at this stage, be introducing selective licensing.

Does my property need an HMO licence? - pre application questionnaire (70kb)

When a licence is not required

Just because a property is a HMO , it does not automatically follow that it needs a licence.

Those not required to obtain a mandatory licence include:

HMO ’s that are entirely occupied by freeholders or long leaseholders
Building or ﬂats that are occupied by two single people (households)
HMO ’s owned and managed by educational establishments and buildings regulated by other legislation, such as residential care homes or bail hostels
Buildings occupied by the leaseholder and their household, and two or fewer lodgers
Buildings converted into self-contained ﬂats that meet, as a minimum the standard laid down in Building Regulations 1991

However, if the property falls within the designated selective licensing area, they will require a selective licence.

Applying for a licence

To apply for a licence, you will need to contact the Landlord Licensing team for an application form. You will need to demonstrate to the local authority that:

You are a ﬁt and proper person. This may involve providing a Criminal Records Bureau disclosure showing you have no relevant criminal convictions
You have adopted procedures for tackling anti- social behaviour issues
The property is suitable for the number of occupants
Satisfactory management standards are in place
Satisfactory measures for dealing with tenancy issues are in place

How much will a licence cost?

The cost of a 5 year licence is as follows: £668 + £34 inspection fee per habitable room.

For example: HMO with eight bedrooms, one communal kitchen, one communal lounge, one communal dining room, two bath/shower rooms and two separate WC’s = Standard application fee of £668 plus inspection fee of 10 habitable rooms at £34 = £340.

Total fee = £1008.00 for 5 years (£201.60 per year)

Length of licence

A licence will normally last for ﬁve years but in certain circumstances a licence can be granted for a shorter period.

Failing to apply for a licence

If you fail to apply for a licence, there are a range of sanctions that could be applied:

It is a criminal offence to operate a licensable HMO without applying for a licence. On conviction, you could face a ﬁne of up to £20,000
It is a criminal offence to breach your licensing conditions. On conviction, you could face a ﬁne of up to £5,000
If the council cannot grant a licence or a licence is revoked, an Interim Management Order (IMO) must be made. This will transfer the management of the property to the local authority. The council can then spend monies received through rents to cover the costs of managing the property
If a landlord operates a licensable HMO without a licence, section 21 procedures to evict tenants cannot be used
Any rent received while the property was unlicensed may have to be paid back to the local authority or in certain circumstances the tenant

When to get a licence

Mandatory and additional licensing came into to force on 6 April 2006.

Appealing against a decision

We would ask that you contact the council’s Landlord Licensing team initially to try and resolve the issue. If you feel that the council has acted unfairly by failing to grant, revoking or imposing certain sanctions on your licence, you can appeal to the Residential Property Tribunal (RPT).

The RPT is an expert independent tribunal that will act instead of the County Court to either overturn or conﬁrm the council’s decision. The RPT cannot award costs unless it is found that one party acted unreasonably.

Residential Property Tribunal

Contact

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