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New HMO legislation 1st October 2018 – are you ready?

September 25th, 2018

New HMO legislation confirmed for October 2018

The government has confirmed that there will be an extension of the licensing rules for Houses in Multiple Occupation (HMOs) and that all landlords covered by the rules must apply for a licence by 1st October 2018. Here is a brief summary of what you need to know.

The ‘three-storey rule’ has been removed. As of 1 October 2018, a property will be considered a HMO if it is occupied by more than four people and these people form two or more separate households. The requirement for it to cover three or more stories of a property has now been removed and it is estimated that this Change will mean that some 177,000 rental properties will now be classed as HMOs. Tenants may be considered to belong to separate households even if they have a joint tenancy agreement. For example, if a property was let to five students then it would probably be classed as a HMO even if the students took out a joint tenancy agreement. It is not always straightforward to determine whether or not a particular tenancy situation would require HMO licensing so landlords may want to Ask a lawyer (or get a HMO licence to be on the safe side if the costs are affordable).
The proposed 6-month grace period has been abandoned.
Properties which are already covered by an HMO licence will continue to be covered as before, but landlords of properties which require new licensing must apply for a licence by 1st October and in order to ensure that your application is granted (or at least to minimise the chances of it being refused), you will need to ensure that your property complies with local authority requirements.
You may need to update your mortgage lender and insurance policy.
If you have a mortgage and/or insurance which currently excludes HMOs then you will need to contact the relevant companies and work something out with them. Do not be tempted to skip this step and carry on as normal and just say you forgot if something happens, as it could land you in a lot of trouble. There is however, no need to panic as lenders and insurers both do good business with landlords and therefore it’s in their interests to find a reasonable way to address this situation.
The minimal-size rule has not been applied at this point
At this point in time, there is no centrally-applied minimum-size rule for rooms in HMOs, although some local authorities may have their own requirements. While the minimum-size rule has triggered widespread criticism, there may be an upside to it. If the government can be persuaded to set the minimum size at a national level rather than giving local authorities the ability to set their own rules, then landlords would at least have a level playing field and a degree of certainty as to where they stand.

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HMO Licence – Does your property need one?

May 10th, 2016

HMO Licence and Licensing

An HMO licence is granted to a landlord if an HMO property meets certain standards that ensure it is safe and suitable for the tenants. In addition most HMO landlords only need to obtain a licence if the property falls into the following criteria:

  • it is a three-storey house (including cellars, attics, basements, mezzanine floors and loft conversions). The definition of storeys includes habitable basements and loft conversions.
  • it is occupied by five (5) or more people from two different households or more
  • tenants share the kitchen, bathroom or laundry area
  • in some cases, a maisonette in a house or above commercial premises may need a licence if similarly, occupied

If your property is smaller and rented to fewer people, you may still need a licence for your HMO. This will depend on the area your property is located so is it always best to check with your local council for more information. 

Your HMO licence is valid for 5 years and therefore must be renewed before it comes to an end.

How to apply for an HMO License
The landlord must submit one (1) licence application for every property that will be rented out. A fee will be charged by the council for the processing of licence applications. Processing time can take anywhere between 6-8 weeks. The council will consult with individuals who may be interested in the property and deliberate whether licence conditions should be imposed for the HMO in question.

All licensed HMOs will be inspected to identify any need for repairs, or to assess fire safety, amenity or other safety concerns. Landlords must comply and bring their property up to standard within timeframe that is determined by the council.

The gov.uk website has an HMO guide that covers everything you need to know as property manager or HMO landlord.

New to HMO’s? Looking for a reputable property management agent to manage and maintain your HMO properties? Call HMO specialists Railton-Meeks today to discuss our specialist HMO management services. 

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