Licensing & Houses in Multiple Occupation (HMOs)

The purpose of licensing, especially for HMOs, is to ensure that residential accommodation in the Private Rented Sector (PRS) is safe, well-managed, and of good quality, with a particular focus on safety.

Definitions

What is an HMO?

A House in Multiple Occupation (HMO) is a residential property that is occupied by three or more people who share facilities such as a bathroom and/or kitchen and who form two or more 'households'.

What is meant by the term 'household'?

A household is either a single person or members of the same family who live together. A family includes people who are:

  • Married couples or couples living together as married (including people in same-sex relationships)
  • Relatives or half-relatives (e.g. grandparents, aunts, uncles, siblings, nieces, cousins)
  • Step-parents, step-children, and half-relatives
  • Foster parents and foster children

Some domestic staff may be included in the household if they live in the house as a result of the terms of their contract (e.g. an adult care-giver) and if up to three people receiving care comprise a single household.

Licensing Types

ThreeTypes of HMO Licensing:

Mandatory licensing of large HMOs

This applies nationwide for HMOs in which there are five or more occupants in a property of three or more stories and in which the tenants comprise two or more households.

Additional licensing

This applies when a council imposes a policy requiring other sizes of HMOs to be licenced. For example, a council may bring additional licensing that requires that all HMOs be licenced.

Selective licensing

This licensing is at the discretion of the borough, and can affect all rental properties regardless of size, number of stories, or number of occupants. For example, a council can instigate compulsory licensing of all residential rental properties in a street, ward, or borough.

Before granting a licence, the local authority must be satisfied that the owner and any managing agent of the property is fit and proper to hold a licence, and that the property meets required physical standards.

A licence will normally be granted when...

  • Appropriate fire safety measures are in place, such as smoke detectors and extinguishers;
  • Annual gas safety checks are up-to-date;
  • The electrical wiring and appliances have been checked and certified as safe every five years;
  • The property is not overcrowded;
  • There are adequate cooking and washing facilities;
  • Communal and shared areas are kept clean and in good repair; and
  • There are appropriate refuse storage and disposal facilities.

Once granted, the licence must be clearly displayed in communal areas along with the name, address, and telephone number of the licensee or property manager of the premises. A copy of the current gas safety certificate must also be on display.

How can I check if a property must be licenced?

If you are not sure whether your property must be licenced, contact the local borough council in question. Often, their website contains the relevant information.

Can a landlord evict a tenant to avoid licensing?

No. Landlords are not permitted to evict existing tenants to avoid licensing. Any attempt to evicta tenant from a property that should be licenced but isn't may be considered a crime under the Protection from Eviction Act of 1977, and the landlord or anyone else involved may be prosecuted. The Deregulation Act of 2015 has also changed the law such that a valid notice cannot be served to end a tenancy if the property should be licenced but is not.

Licensing Requirements

What will the council take into account when deciding whether or not to grant a licence?

  • The suitability of the HMO for the number of occupiers;
  • The suitability of the facilities in the HMO, such as toilets, bathrooms, and cooking facilities;
  • The suitability of the landlord and/or the managing agent to manage the HMO (this is called the ‘fit and proper’ test); and
  • The general suitability of the existing management arrangements of the property.

The council must also carry out a Housing Health and Safety Rating System (HHSRS) risk assessment on the HMO within five years of receiving a licence application. If the inspector finds any unacceptable risks during the assessment, then the landlord will be instructed to carry out works to eliminate them. The landlord must also notify the council if he plans to make changes to the HMO (structural or decorative), if the tenants make changes to the property, or if the tenants' circumstances change (e.g. they have a child).

The council must ensure that a licenced HMO is not overcrowded and has suitable shared amenities and facilities for the number of persons occupying it. If there are too many people living in the HMO at the time that the licence is granted, the landlord must take reasonable steps to reduce the number of occupiers to the permitted number. Existing tenants will not normally be evicted. Instead, when they move out, the landlord must not allow new tenants to move in if their occupancy would bring the total number of occupiers above the maximum number allowed.

Enforcement

What happens if a landlord doesn't apply for a licence?

It is a criminal offence to operate an HMO that should be licenced but is not, and if convicted, the fines for non-compliance are unlimited.

Local authorities also have a range of other enforcement options, including the power to vary the terms of a granted HMO licence or to revoke an HMO licence.

Under a rent repayment order , landlords may have to pay a tenant any rent that they have received, or to pay the council any housing benefit they have received, up to a maximum of 12 months. The tenancy itself will not be affected if the landlord has failed to apply for or obtain an HMO licence, although the council may take over the management of the property.

Can a tenant withhold rent if the landlord has not applied for a licence?

No, a tenant cannot withhold rent.

What happens if a landlord breaches the terms or conditions of the licence?

If a landlord or managing agent allows an HMO to be occupied by more people or households than the maximum number in its licence, unless there is a reasonable excuse, the landlordis committing a criminal offence, and the possible fines are unlimited. If the breach is serious or persistent, the licence may be entirely revoked. If the council revokes a licence, the council will take over the HMO management.

What happens if the council refuses to grant a licence?

If the council is unable to grant a licence for an HMO, then it will take over the management responsibility for the property until circumstances change and the property can be licenced. There are special rules that apply when a council takes over the management of an HMO.

What happens if the conditions in an HMO are poor?

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Whether or not the HMO is licenced, it should be reasonably free from any hazards that might affect a tenant's health and safety. The council is responsible for enforcing those standards, and can require that a landlord take appropriate action to remedy any defects. In some emergency cases, the council may undertake the works itself.

For further information, please see the government booklet on HMOs (PDF).

hmo-licensing

Local Councils

The best way to determine the proper licensing requirements for your area is to contact your local council's office.