Houses that must have a licence

A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 'household' (for example a family) but share facilities like the bathroom and kitchen. It's sometimes called a 'house share'.

You must have a licence if you're renting out a large HMO. Your property is defined as a large HMO if all of the following apply:

• it is rented to 5 or more people who form more than 1 household
• some or all tenants share toilet, bathroom or kitchen facilities
• at least 1 tenant pays rent (or their employer pays it for them)

An HMO could be a:

• house split into separate bedsits
• shared house or flat, where the sharers are not members of the same family
• hostel
• bed-and-breakfast hotel that is not just for holidays
• shared accommodation for students - although many halls of residence and other types of student accommodation owned by educational establishments are not classed as HMOs

Applicant / licence holder / manager details

The applicant

This may be the property owner, the proposed license holder, the proposed property manager, the person having control of the property or the person managing the property or somebody acting on their behalf who has completed the application for whatever reason.

The proposed licence holder

The most appropriate person to be responsible for the property and to hold the licence. This will usually be the applicant.

The owner

Means person (other than a mortgagee not in possession) who is for the time being entitled to dispose of the freehold of the premises whether in possession of reversion and includes also a person holding or entitled to the rents and the profits of the premises under a lease which has a term of more than 3 years to expire.

The person having control of the property

This means the person who receives the rack rent of the property or who would be in a position to receive it if the premises were let at a rack rent. Rack rent is defined as the rent which is not less than 2/3rds of the full net rental value of the premises. The person having control includes not only the person who receives the rent in this way on his own account but also someone who receives it as agent or trustee for another or someone else.

Where the property is owned by a company or similar body a responsible person of that company must be named as the licence holder.

The person managing the property

This is not necessarily the same as the Managing Agent or the Manager. The person managing means the person who is an owner or lessee (tenant) of the premises or who receives the rent for the property or other payments for it from persons who are in occupation as tenants or licensees of parts of the premises. This applies whether the person receives the rent directly or through an agent or trustee. Where the rents or other payments are received through someone who is an agent or trustee not only does it include the owner (or lessee) but it also includes the agent or trustee.

Fit and proper person test

The Council must be satisfied that the person applying for an HMO licence is a "fit and proper person" to hold a licence. The test is applied to any person managing the premises and any director or partner in a company or organisation which owns or manages the HMO. Not all convictions are relevant to a person's prospective role as an operator of an HMO. Please note that failure to declare a relevant conviction will be regarded with the conviction as more serious than the conviction itself.

Licencing fees

Mandatory HMO licensing schedule of fees

Property size	cost
HMO with 5 to 6 bed spaces	£520.00
HMO with 7 to 8 bed spaces	£625.00
HMO with 9 plus bed spaces	£730.00

Conditions of licence

When you are granted a licence it will come with conditions attached to ensure that the standards in your building continue to be kept. These are mandatory conditions which require the licence holder to ensure:-

• proper fire safety measures are in place, including working smoke alarms
• a valid gas safety certificate must be provided annually
• electrics are checked every 5 years
• the property is not overcrowded
• there are enough cooking and bathroom facilities for the number living there
• communal areas and shared facilities are clean and in good repair

Councils may also apply the following conditions:

• restrictions or prohibitions on the use of parts of the HMO by occupants
• a requirement that the condition of the property, its contents, such as furniture and all facilities and amenities, are in good working order
• a requirement for specified works or repairs to be carried out within a particular timeframe
• a requirement that the responsible person attends an approved training course.

Informing interested parties

The Act requires you to notify various 'relevant persons' (who have an interest in the HMO) that you are making the application, and to notify the council of those persons' details.

The relevant persons are:

• the landlord (unless you are the applicant)
• any other owner of the HMO if the landlord does not own the freehold ie the freeholder and any head lessors, who are known to you
• any person who is a long leaseholder (you do not need to notify any tenant who has an assured shorthold, an assured or protected tenancy whose tenancy is periodic or has less than three years to run, or a statutory tenant.)
• any mortgagee
• the proposed licence holder (unless you are the applicant)
• the proposed managing agent (if any, and unless you are the applicant)
• any person who has agreed that he will be bound by any conditions in a licence if it is granted.

Example notification letter to send to interested parties

Fines and penalties

The Housing Act 2004, introduced licensing of HMOs. Landlords and property managing agents who let HMOs, need to apply for a licence from the Local Authority. You could get an unlimited fine for renting out an unlicensed HMO, a criminal record and potentially rent repayment orders.

Reporting changes

You must tell the council if:

• You plan to make changes to an HMO
• Your tenants make changes
• Your tenants' circumstances change (eg they have a child)

Council tax

The owners of HMOs are responsible for paying the council tax bill.

If all the tenants in a HMO are full-time students, the property will be exempt from council tax.

If there is one person who is not a full-time student living in a property, a discount will apply. If there are two or more people who aren't full-time students living in a property, no discount will be granted.

• GOV.UK: Council Tax and HMOs
• HMOs and council tax law

Standards required in HMOs

Houses in Multiple Occupation (HMOs) must meet certain standards with regard to adequate heating, lighting, ventilation, provision of water, toilet, bathroom and kitchen facilities for the number of tenants.

• The Management of HMO (England) Regulations 2006
• The Licensing and Management of HMO (Additional Provisions) (England) Regulations 2007

Housing Health and Safety Rating System

All properties are inspected under the Health and Safety Rating System (HHSRS). and where appropriate further advice will be provided to deal with, remove or minimise hazards identified.

• Housing Health and Safety Rating System guide for landlords

Amenity standards

These are the minimum standards for the kitchens, toilets, washing facilities, space, heating and water supply.

• Amenity standards for houses in multiple occupation

Fire safety

HMOs are considered to have a higher risk of a fire than average properties, and must therefore have adequate means of escape and other fire precautions.

• West Yorkshire Fire & Rescue Service HMOs
• Guidance on fire safety provisions for certain types of existing housing

Inspections

An officer will carry out a full inspection of the property with you, which will cover:

• state of repair
• provision of amenities
• level of occupation
• state of management
• fire safety measures
• the presence of any hazards under the health and safety rating system (HHSRS).

Application guidance and downloads

• GOV.UK: guide for landlords and managers who manage HMOs
• Licensing of houses in multiple occupation (hmo's) guide for landlords
• Does your building need a mandatory house in multiple occupation licence flowchart
• Example floor plan and sketch paper
• Example notification letter to send to interested parties
• Amenity standards for houses in multiple occupation

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Further guidance

• GOV.UK: Private renting: Houses in multiple occupation
• GOV.UK: House in multiple occupation licence
• GOV.UK: Check your tenant's right to rent
• Shelters: Houses in multiple occupation (HMO)
• Shelters: Landlord and tenant responsibilities for repairs
• GOV.UK: Model agreement for a shorthold assured tenancy

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