Houses in Multiple Occupation (HMO) licensing

Licensing for Houses in Multiple Occupation (HMO) came into force on 6 April 2006 as implemented by the Housing Act 2004.

The aim of the legislation was to empower local authorities in governing the privately-rented sector of the property market. The requirement for HMOs to be licensed ensures local authorities are able to assess and regulate HMOs within their area in order to safeguard tenants. The Act makes failing to licence a HMO a criminal offence, which can often lead to criminal and regulatory enforcement against the landlords and/or manager of the HMO.

Stephensons are experienced in assisting with the purchase and sale of HMO licensed properties. Both our commercial property and regulatory teams regularly receive instructions from sellers, buyers, landlords and property managers in relation to HMO matters.

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HMO frequently asked questions

Read our frequently asked questions  below to find out more about the new rules surrounding HMO licensing which came into effect in England in October 2018.

What is the new definition of a HMO that requires mandatory licencing? 

Any property occupied by five or more people, forming two or more separate households. The old definition included the words “and comprising of three or more storeys” but these words have now been removed. 

My property is less than three storeys. Do the new rules apply? 

Yes. The amended definition of a house in multiple occupation (HMO) no longer includes a requirement to be of a specific number of storeys to require a mandatory licence.   

What is a household?

Section 258 of The Housing Act 2004 defines a single household as a family being made up of either a couple (whether married or not and including same-sex couples) or persons related to one another. Relatives includes parents, grandparents, children, grandchildren, brothers, sisters, uncles, aunts, nephews, nieces or cousins, half-relatives and stepchildren.

Is my current HMO licence still valid? 

Yes. Any current licence will be valid until the expiration date. The expiration date is usually five years from the date of issue.  

My current HMO did not need a licence. Do I now need a licence? 

If the property is occupied by five or more people that together form two or more separate households, then it will now form part of the mandatory licencing scheme. 

How do I get a licence?

The relevant licencing body is your local housing authority. Most authorities have details relating to their mandatory licencing scheme available via their website. 

Is there a grace period for compliance? 

Yes.The local authorities are allowed to grant a grace period of up to 18 months to enable compliance. 

Are there any other new licencing rules? 

Yes, the new rules implement minimum sleeping room sizes and a requirement to comply with the local authority waste disposal scheme. 

What are the minimum sleeping room requirements? 

The minimum requirements for sleeping room for a person over ten years of age is 6.51 square metres and a room for two persons over ten years of age is 10.22 square metres. The minimum size for one child under the age of ten years is 4.64 square metres. 

Are the mandatory sleeping room size conditions standard across England? 

No, the sleeping room size requirements are a minimum standard. They are not intended to be optimal room sizes. Local housing authorities will have discretion to set their own higher standards within licence conditions. They are not able to set lower standards. 

How will local authorities assess the minimum room size conditions? 

The government guidance suggests that it is for the local authority to devise their own policies and procedures although it is expected that authorities may choose to inspect properties. 

What are the waste disposal requirements? 

A mandatory condition of a licence is that a HMO must comply with the local authorities waste policy in relation to storing and disposal of waste. 

I have a sleeping room below the minimum standard. What can I do? 

Properties could be altered or the sleeping room will need to be stopped from being used, otherwise it will be a breach of HMO licencing. This could be frustrating where non-compliance is only marginal but the new minimum standards must be complied with. 

What are the penalties for breach of a HMO licence?

Failure to comply with new licencing requirements is a criminal offence and upon conviction would be liable to an unlimited fine. Alternatively, a local authority can impose a civil penalty of up to £30,000. 

FAQs first published by Zoopla

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What is a HMO/Property Licence?

Licenses give landlords and managers legal authority to rent out properties that are covered by licensing legislation provided in the Housing Act 2004. 

The Act introduces three types of property licensing:

  • Mandatory HMO licensing
  • Additional HMO licensing
  • Selective licensing

Mandatory HMO licensing

Some HMOs will invoke mandatory licensing requirements. Mandatory licensing will apply to a property if:

  • It is a HMO
  • It comprises three storeys or more
  • It is occupied by five or more people

When counting the number of storeys in the building, you need to include:

  • Basements and attics if they are occupied or have been converted for occupation or if they are in use in connection with the occupation by residents
  • Any storeys that are occupied by you or your family if you are a resident landlord
  • All the storeys in the residential occupation, even if they are self-contained

If the above criteria is fulfilled, the Housing Act 2004 stipulates that the HMO must be licensed, irrespective of its location.

Additional HMO licensing

Local authorities can also choose to introduce additional licensing schemes applicable to other types of HMOs which are not subject to mandatory licensing. Such schemes are commonplace in areas where the management of HMOs is giving cause for concern.

The Housing Act 2004 provides that the local authority must have concerns as to the ineffective management of HMOs in a particular area before additional licensing can be introduced. The act also requires the local authority to consult local landlords before implementing such a scheme. The scheme will also have to be publicised by a local authority before its introduction. If these steps are complied with, the act requires all affected HMOs to be licensed.

Selective licensing

In certain cases, the local housing authority may introduce a selective licensing scheme in areas which are known to be areas of low housing demand or those with significant anti-social behaviour problems. The effect of such a scheme will be that all rented property within the area designated for selective licensing has to be licensed, regardless of whether or not the property is an HMO.

As with additional HMO licensing, the Housing Act 2004 requires the local authority to carry out a consultation process and provide publicity before a selective licensing scheme can be introduced.

Applying for a HMO licence

The process for applying for a HMO licence, or a licence required for a property covered by selective licensing, will vary according to the local authority receiving the application. In most cases, it will be the housing or environmental health department of the local authority that will be responsible for assessing and processing applications.

When applying for a licence, it is useful to bear in mind the following information:

  • A separate licence is needed for each property
  • A licence will normally last for up to five years
  • The landlord can hold the licence or nominate someone else such as a manager of agent (with their agreement) to be the licence holder. Whoever holds the licence, must be the person who is most appropriate person to hold the licence (likely to be the person who receives the rent for the property)
  • The licence holder and any manager of the property will have to be considered ‘fit and proper’ and the property will need to meet minimum standards for the licence to be granted
  • A licence may not relate to more than one property and is not transferable to a different property, or to a different person.

Licensing enforcement

Failure to apply for a licence required by the Housing Act 2004 is a criminal offence and - following a change in the law in 2015 - landlords can now be punished with an unlimited fine for each offence. Local authorities will frequently look to prosecute landlords who fail to obtain a licence. In addition, charges can also be brought when landlords with a licence fall foul of the HMO Management Regulations 2006. Moreover, the local authority, and in certain circumstances, the tenant, can apply for a repayment order, under which they can reclaim rent paid during the period, up to a maximum of 12 months, in cases where the landlord did not have a licence

If a landlord is suspected of having committed an offence under the Housing Act 2004, their property may be subjected by an inspection conducted by the local authority. In addition, they may be required by the local authority to provide information and evidence pertaining to the property. This will arise before any decision has been made as to whether the landlord or manager should be prosecuted. The information will usually be required by way of a legal notice, which, if ignored, can constitute a separate criminal offence.

Landlords and managers are also frequently invited to attend interviews under caution as part of the investigatory process. Such interviews will permit the local authority to ask the landlord questions as to why the property has not been licensed. The purpose of an interview under caution is to question a person on their suspected involvement in an offence. As such, interviews are recorded, and answers provided can be referred to in any subsequent proceedings. Independent legal advice should always be sought before attending such interviews.

In cases where criminal proceedings are brought, it may be possible that the landlord or manager in question has a defence. The Housing Act 2004 provides a statutory defence of ‘reasonable excuse’, which, although normally difficult to establish, will mean the landlord or manager is not guilty of an offence - even if they have failed to obtain a licence. Legal advice will need to be taken by those charged to determine if such a defence exists.

Although failing to obtain a licence without reasonable excuse is a criminal offence, it is important to note that not all cases result in a court appearance and a criminal conviction. Stephensons are regularly instructed by landlords and managers throughout all stages of the enforcement process, and have an accomplished record of resolving cases without the need for the criminal proceedings before a Magistrates’ Court.

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