Homes in multiple occupancy licence
- Category: Business and markets licensing
- Last Updated: 05 August 2016
Information and guidance on licensing of a House in Multiple Occupation (HMO).
The 2004 Housing Act introduced compulsory licensing of Houses in Multiple Occupation (HMOs).
What is an HMO?
HMO stands for House in Multiple Occupation, which means a building, or part of a building, such as a flat, that:
- is occupied by more than one household, and where more than one household shares - or lacks - an amenity such as a bathroom, toilet or cooking facilities
- is occupied by more than one household and which is a converted building—but not entirely self-contained flats (whether or not some amenities are shared or lacking)
- is converted self-contained flats, but does not meet as a minimum standard the requirements of the 1991 Building Regulation, and at least one third of the flats are privately rented
- Why does the Government want HMOs to be licensed?.
- Do all HMOs have to be licensed?.
- What criteria must an HMO meet for it to be licensed?.
- What does a 'fit and competent person' mean?.
- What is meant by 'reasonably suitable for occupation for a number of people'?.
- Are there conditions attached to the licence?.
- How long does the licence last?.
- How much will it cost?.
- Will you be inspecting my property?.
- When should I apply for a licence?.
- Do I have to apply for a licence for each property?.
- I have properties in different Local Authority areas. Do I have to apply to each of them?.
- Can the Council refuse to licence my property?.
- Can I appeal?.
- Temporary exemption from licensing.
- Are there any other penalties?.
- Can a tenant claim back rent on an unlicensed property?.
Larger HMOs such as bedsits are shared houses, often have poorer physical and management standards than other privately rented properties. There is a significant risk of dying or being injured in a fire in such properties. The fatality rate in HMOs of three or more storeys is around four times higher than that for one or two storey HMOs. The people who live in HMOs are amongst the most vulnerable and disadvantaged members of society. As HMOs are the only housing option for many people, the Government recognises that it is vital that they are properly regulated.
Licensing is intended to make sure that:
- landlords of HMOs are fit and proper people, or employ managers who are
- each HMO is suitable for occupation by the number of people allowed under the licence
- the standard of management of the HMO is adequate
- high risk HMOs can be identified and targeted for improvement.
No. Under the new Housing Act 2004, there are three types of licensing:
1. Compulsory (required by law) licensing of HMOs for properties that are:
- three or more storeys high, and
- occupied by five or more persons, and
- those persons form two or more households.
2. Additional licensing of HMOs
A discretionary power that Councils may decide to apply to a particular type of HMO, for example, two storey properties occupied by three or more students or asylum seekers.
3. Selective licensing of HMOs
Properties that are not subject to HMO licensing could be covered under a selective licensing scheme. This is where the Council may declare that certain areas, for example, where there is low demand for housing and/or antisocial behaviour, are appropriate for selective licensing. This licensing would cover all forms of private rented housing, including HMOs.
HMOs exempt from licensing
These include those:
- buildings, or part of buildings, occupied by no more than two households each of which comprise a single person (that is two person flat shares)
- buildings occupied by a resident landlord with up to two tenants
- 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 and such like
- student halls or residence, where the education establishment has signed up to an Approved Code of Practice
- buildings regulated otherwise than under the Act, such as care homes, bail hostels etc, and the description of which are specified in regulations
- buildings entirely occupied by freeholders or long leaseholders
Anyone who owns or manages an HMO that must be licensed has to apply to the Council for a licence. The Council must give a licence if it is satisfied that:
The HMO is reasonably suitable for occupation by the number of people allowed under the licence
- the proposed licence holder is a fit and proper person
- the proposed licence holder is the most appropriate person to hold the licence
- the proposed manager, if there is one, is a 'fit and proper person'
- the proposed management arrangements are satisfactory
- the person involved in the management of the HMO is competent
- the financial structures for the management are suitable.
The Council will carry out checks to make sure that the person applying for the licence is a fit and proper person. In deciding whether someone is fit and proper, the Council must take into account:
- any previous convictions relating to violence, sexual offences, drugs and fraud
- whether the proposed licence holder has broken any laws relating to housing or landlord and tenant issues
- whether the person has been found guilty of unlawful discrimination
- whether the person has previously managed HMOs that have broken any approved code of practice.
For an HMO to be reasonably suitable for occupation for a relevant number of people, the Council will be using statutory instruments prescribing standards, recently produced by the Government, covering the following:
- number, type and quality of bathrooms, toilets, washbasins and showers
- number, type and quality of food storage, preparation and cooking facilities
- fire precautions.
There will be a number of conditions attached to licences, some of which are set out in the Act and some of which will be prescribed by the Council in individual cases. The conditions that will apply to all licences are:
- Licence holders will be required to produce to the Council annually for our inspection, an in-date gas safety certificate (gas safety inspections are required yearly)
- Licence holders will be required to keep electrical appliances and furniture made available by them in a safe condition
- Licence holders will be required to ensure that smoke alarms are installed in the HMO and are kept in proper working order and make declarations to this effect to the Council
- Licence holders will be required to supply to occupiers of the HMO a written statement of terms on which they occupy the house and make declarations to this effect to the Council
Licences can be granted for up to five years. The Council may grant licences for shorter periods in certain circumstances such as if works are required at the property.
Following receipt of the application form and any necessary attachments including the relevant fee, you can expect to hear from us within 56 days.
If you have not heard from us within a reasonable period please contact us. You can do this online if you applied through the UK Welcomes service or use the contact details below.
Landlords will have to pay a fee to cover the administration costs of the licence procedure. The Council has determined a licensing fee, details of which are available on request.It may be advantageous if a landlord or manager is a member of a professionally recognised body or accredited.
The licence can be issued without the Council inspecting the property. However, an appointment will be made to inspect the property prior to the licence being issued.
The Council is required to satisfy itself as soon as is reasonably practicable after an application for a licence is made, that the HMO is free from any serious hazards under the Housing, Health and Safety Rating System (HHSRS). Please visit our houses in multiple occupation safety inspection webpage for more information.
In effect, this means that the Council will be carrying out two types of inspection at some point during the lifetime of the licence. To ensure minimum disruption to the landlord, every effort will be made to combine the two inspections.
Licensing of HMOs came into effect on 6 April 2006. Landlords will need to request an application pack from Housing Services. A three month grace period from April 2006 to June 2006 was given to allow landlords sufficient time to apply. However, if a landlord has not applied after that time, penalties will be introduced. Details on penalties will be available shortly.
Yes. An HMO licence will only be valid for one property at a time. If you have more than one property, then a licence will be required for each of them. The Council is considering discounts for landlords with several properties.
Yes. Each Local Authority is responsible for determining and issuing a licence in their area. This allows Local Authorities to take their local needs and policies into account when making their decision.
Yes, if the property does not meet the conditions set out above and the landlord or manager is not a fit and proper person.
If a landlord fails to bring an HMO up to the required standard, or fails to meet the fit and proper person criteria, the Council can issue an Interim Management Order(IMO), which allows it to step in and manage the property. The owner keeps their rights as an owner. This order can last for a year until suitable permanent management arrangements can be made. If the IMO expires and there has been no improvement, then the Council can issue a Final Management Order. This can last up to five years and can be renewed.
You may appeal if the Council decides to:
- refuse a licence
- grant a licence with conditions
- revoke a licence
- vary a licence
- refuse to vary a licence
You must appeal to the Residential Property Tribunal, normally within 28 days of the Council's decision. Details of how to appeal will be available to the landlord once the Council has informed the landlord of its decision.
For further information on the Residential Property Tribunal .
If a landlord or person in control of a property intends to stop operating an HMO or reduces the number of occupants and can give clear evidence to this effect, then he or she can apply for a Temporary Exemption Notice (TEN). This lasts for a maximum of three months and ensures that a property in the process of conversion from an HMO, does not need to be licensed. If the situation is not resolved, then a second TEN can be issued.
When this expires, the property must be licensed, become subject to an Interim Management Order, or cease to be an HMO.
It is an offence if the landlord or person in control of the property:
- Fails to apply for a licence for a licensable property, or
- Allows a property to be occupied by more people that are permitted on the licence.
A fine of up to £20,000 may be imposed. In addition, breaking any of the licence conditions can result in fines of up to £5000 for each offence.
Yes. A tenant living in a property that should have been licensed, but was not, can apply to the Residential Property Tribunal to claim back rent they have paid during the unlicensed period (up to a limit of 12 months). The Council can also reclaim any housing benefit that has been during the time the property was without a licence.
We would always advise that in the event of a complaint the first contact is made with the trader by you - preferably in the form a letter (with proof of delivery). If that has not worked, if you are located in the UK, Citizens Advice consumer helpline will give you advice. From outside the UK contact the UK European Consumer Centre.
For example about noise or pollution etc. contact the local authority.
For further information on Housing Benefit, or telephone 01653 600666.
For further information on houses in multiple occupancy, please email the Housing Department or telephone 01653 600666.
British Property Federation (BPF).