In December 2017, the UK Government announced that it would extend mandatory Houses in Multiple Occupation (HMO) licensing, coming into effect in October 2018. If you are a landlord in the UK, and you let to 5 or more occupants from more than one family, this concerns you.
What changed?
Under the Housing Act of 2004, if your property consisted of three or more stories, and you let to 5 or more occupants from more than one single household, you had to obtain an HMO licence. The licensing scheme set out to improve housing conditions in the private rental sector.
Since 2004, many individual councils across England and Wales have introduced their own additional licences for HMOs, however, nothing had been rolled out on a national scale.
The changes that came into effect in October 2018, introduced mandatory licensing for all HMOs, regardless of their size or number of stories. All HMOs with more than 5 occupants from more than one single household are now required to procure a licence.
Another amendment to the HMO licensing laws applies to flats. Under the 2004 Act, blocks of flats which had HMOs within them only had to get one licence for the entire building. The new HMO changes require every individual flat in the building which has more than 5 occupants from two or more households to receive a separate HMO licence.
I already have an HMO licence under the old regulations, do I have to do anything?
No. Properties with HMO licences under the existing laws were transferred straight onto the new scheme. Your licence will still be valid for the remaining period on the licence.
The legal penalties for failing to comply with the changes
Failing to comply incurs stiff penalties. In 2015, the government uncapped the fines for landlords who violate the Housing Act of 2004. Should you go in front of a magistrate’s court, theoretically there is no limit for how much they can fine you.
Even if the council chooses not to prosecute, they are able to issue a fixed fine of up to £30,000 for each offense. The tenant also has the right to claim rent back from the landlord, and if the government paid for the tenancy in the form of housing benefit, it can claim that back too.
It is not worth running the risk. Make yourself aware of the legislation changes and make the necessary arrangements to become compliant.