Houses of Multiple Occupation (HMOs)
Introduction
A property where there are a number of individual occupiers who do not form members of the same family or household are known as houses in multiple occupation or 'HMOs'. There are special legal requirements for letting out an HMO so as to control the standard of such housing. There are a number of pieces of legislation governing this area, namely, and most recently, the Housing Act 2004.
Definition of HMO
The definition is somewhat complicated despite numerous attempts at simplification over the years. Under the Housing Act 2004, a 'House in Multiple Occupation' is a building, or part of a building, (e.g. a flat):
- which is occupied by more than one household and in which more than one household shares an amenity such as a bathroom, toilet or cooking facilities;
- which has been converted into several living units of accommodation, and where not all the living accommodation is self-contained (whether or not there is also a sharing of amenities);
- which has been converted into self-contained flats, less than two-thirds of which are owner occupied, and the standard of conversion does not meet, at a minimum, that required by the 1991 Building Regulations.
What to do if you let an HMO
First, decide whether particular safety or planning legislation applies to the property. That is, is your property an HMO?
Second, check up on the HMO Management Regulations because special rules apply to the management of HMOs. These put particular duties on both the landlord and the tenants.
Third, check the HMO Fitness Standard. The HMO Fitness standard (defined in s.352, Housing Act 1985) places requirements on landlords of HMOs to ensure that the particular house is fit for the number of people living in the property.
Fourth, check HMO Registration Schemes. Many local authorities have implemented registration schemes which require landlords to register any houses in multiple occupation. A fee will normally be payable and in many cases, the authority will require that certain safety improvements are carried out or are already in place.
Fifth, check HMO Licensing. A law was introduced in April 2006 under the Housing Act 2004 which requires certain HMOs to be licensed. This requirement applies to all local authority areas, and will initially apply to all HMOs that comprise 3 or more storeys AND have 5 or more occupants. Each local authority has the jurisdiction to set its own licence fees and make its own specific local fitness standards for fire safety, cooking facilities etc. that landlords will be required to follow. For more on the licensing of HMOs, see our article on the Types of HMO license
Flats
The situation with flats within a larger building is a particular source of complexity and confusion under the Act.
Firstly, a self-contained flat may also be an HMO, if it is occupied by people who are more than two households.
Secondly, the Act recognises that larger buildings have been converted into several units of accommodation. The whole building itself can become an HMO if not all the flats are self-contained, or if there is sharing of amenities such as a bathroom or toilet.
Thirdly, the building can become an HMO, even if it has been neatly divided up into self-contained units, if the conversion does not meet the 1991 Building Regulations. The licensing provisions will apply not only to the dwelling which does not meet the building regulation requirement but to all other owners and managers of the other flats in the surrounding building where less than two thirds of the flats are owner-occupied. This may give rise to problems for the remaining occupants and flat owners who could be other long leaseholders or private landlords. The flat owners or their managing agents could become liable for committing criminal acts under the new legislation simply because of the non-compliance of other flats in the building.
There are likely to be a considerable number of pre-1991 conversions around the country. Many people living in flats that they own would appear now to be covered by this definition.
The current view is that in calculating three storeys, regard should be had to attic or basement accommodation used, or capable of being used, for residential purposes. It is also intended that any part of a building not used for residential purposes, such as commercial premises on the ground floor of a building, will form part of the HMO for determining the number of storeys, but shall be excluded for all other purposes. It is clear that the purpose of this provision is to cover flats above shops which in many towns and cities are rented by groups of people sharing as they are frequently seen as inappropriate or unsuitable for other groups in the rental market. But again many are going to find themselves unexpectedly caught by this HMO scheme.
Penalties
Controlling or managing an unlicensed HMO is a criminal offence, subject to a maximum fine of £20,000. However, this may be subject to challenge on Human Rights grounds as happened recently in Northern Ireland.
There will be additional civil penalties for operating an illegal HMO. Firstly, the landlord will not be permitted to issue a section 21 notice - any such notice will be deemed to be invalid. Secondly, the local authority may impose, via the jurisdiction of a residential property tribunal, a Rent Repayment Order (RRO) on the landlord which can require the landlord to pay a penalty equivalent to one year's rent.
These strict penalties represent the first time in almost 30 years (since the Rent Act 1977), that Government has interfered with the landlord's basic right to receive a fair rent and to repossess his property. It will make any landlord or agent particularly careful not to fall foul of the legislation, inadvertently or otherwise.
Exemptions from the HMO definition
Certain types of buildings will not be HMOs for the purpose of the Act. These include:
- buildings, or parts of buildings, occupied by no more than two households each of which comprise a single person, for example two person flat shares;
- managed or owned by a public body, such as the police or the NHS or an LHA or a Registered Social Landlord;
- where the residential accommodation is ancillary to the principal use of the building, for example, religious establishments, conference centres;
- student halls of residence, where the universities are specified as exempt by order;
- buildings regulated otherwise than under the Act, such as care homes, bail hostels, and the description of which are specified in regulations;
- buildings entirely occupied by freeholders or long leaseholders. (But note the problem of mixed occupancy properties mentioned above.)
Relevant Net Lawman document templates: