Preparing for changes to HMO Licensing
As of 1 October 2018 the definition of houses in multiple occupation or ‘HMO’ will change so that the mandatory licensing scheme will be extended to include any HMO building in which more than one household lives. Mandatory licensing will no longer be limited to certain HMOs that are three or more storeys high, but will also include buildings with one or two storeys.
There are 3 tests to determine whether a property is an HMO: the standard test; the self-contained flat test and the converted building test. These tests examine whether the basic amenities are being shared. So for example, whether two or more of the households who occupy the living accommodation share one or more basic amenities, or the living accommodation is lacking in one or more basic amenities. Basic amenities are defined as a bathroom, toilet or cooking facilities
Therefore a significant number of HMO houses will be caught by the new mandatory licensing.
From 1 October 2018 local housing authorities must impose conditions concerning the provision of suitable refuse storage facilities for HMOs and as to minimum sleeping room size; landlords will have to stop letting rooms that fall below the nationally prescribed standard.
The sanctions for breaching minimum room sizes are onerous and if a licence holder commits an offence and is convicted they may be liable to an unlimited fine. The local housing authority may impose a financial penalty of up to £30,000 as an alternative to prosecution.
There will be no grace period for the new requirements and all affected landlords must have applied for a licence by 1 October 2018.
What should landlords be doing in advance of making their application for a new
HMO licence? It is recommended by many local housing authorities that you ensure in advance of the applications being submitted that you have all the necessary supporting documents including a current gas safety certificate; EPC; electrical safety certificate; written fire risk assessment; PAT test certificate; plan(s) of the property showing room sizes and number of rooms to be occupied by tenants.
Recent research produced by the Residential Landlords Association suggested that there would be an additional 177,000 HMOs subject to mandatory licensing as a result of the extension of the scheme.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.