Regulations for the licensing of House in Multiple Occupation are scheduled to be enforced on the 1st October 2018.
It is important to know what these new regulations involve and what is required of landlords to ensure you are following safe procedures and are not caught out by hefty fines.
What is it?
While there are already HMO regulations in place, currently there are some HMOs which do not need a license; they will be subject to new laws this upcoming Autumn.
These are properties with two stories or less and with 3 or more unrelated occupiers.
This includes purpose-built flats which have up to two flats in a block occupied by 5 or more persons. The aim here is to target flats attached to commercial premises and other small blocks of flats which are not subject to commercial licensing.
Often, these types of lets are used for student housing where students have their own rooms but share bathroom and kitchen facilities.
Councils are enforcing these regulations in an attempt to stamp down on the percentage of rogue landlords who rent out their properties to more tenants than is safe.
Because of the smaller size of these properties, violations in safety procedures have largely gone unreprimanded. These changes in the law aim to improve the safety of lettings throughout the country.
Housing and Planning minister Gavin Barwell has said that “In order to build a country that truly works for everyone, we must ensure that everyone has somewhere safe and secure to live.”
Who will be affected?
RLA PEARL has found that 16% of landlords rent to people in HMOs. All HMO landlords will be affected by the new regulations.
The licensing laws which are in place at the moment affect around 60,000 properties in the UK. It is thought that the new regulations will involve 175,000 properties.
What is required from the landlord?
All landlords applying for a license must do so by 1st October. The government did previously offer a 6-month grace period but have since withdrawn this.
Landlords must ensure that their property meets the new minimum space requirements:
- Rooms which are being slept in by one person over the age of 10 must be no smaller than 6.51 square meters.
- Rooms slept in by two or more people over 10 must not be smaller than 10.22 square meters.
- Rooms slept in by children of 10 years or younger have to be a minimum of 4.64 square meters.
When applying for an HMO license, landlords must specify a maximum number of persons who will be occupying each room under their management. The total number of persons stated as occupying the rooms in the property must match how many people the house is allowed to be home to.
It is expected that criminal record checks will be put in place to ensure a landlord is a ‘fit and proper person’ to be managing a property.
What happens if an HMO license is not obtained?
On 6th April this year London Mayor, Sadiq Khan, made the City of London’s Rogue Landlord Database open to the public and has welcomed other local authorities to do the same.
Landlords convicted of a range of housing, immigration and other criminal offences such as leasing overcrowded properties, fire and gas safety offences and unlawful eviction, will be added on the database and their information will be available to local authorities. This will enable councils to keep a closer eye on those with a poor track record.
Additionally, local authorities will have the power to prosecute against the landlord in the magistrates’ court. Since March 2015 fines for offences against the Housing Act of 2004 have been unlimited.
If proper procedure is not carried out, landlords could be subject to £30,000 worth of fines.
If a landlord is repeatedly found to have not applied for an HMO license they may face a ban on letting property, ranging from 12 months to life. Landlords that ignore a banning order will face criminal sanctions including up to 6 months imprisonment and an unlimited fine.
Barwell also noted that these new procedures are for the safeguarding of tenants and should not put off prospective investors: “Transferring from an unlicensed property to a mandatory one is also likely to be pretty simple. HMOs can still be a very good investment, in the right area, targeting the right audience and managed closely.”
As a landlord expanding their existing property portfolio, the importance of keeping properties under detailed control is key to ensure they are managed efficiently. HMOs can still be a very good investment considering they are in the right area, target the right audience and managed efficiently.
Arthur’s property management software enables you to have complete control over all aspects of your portfolio and it’s accessible from your computer, tablet or mobile phone. Arthur brings your landlords, tenants, contractors, agents and owners all under the same interface, making problem solving a breeze. With our system, you can manage your portfolio from anywhere in the world, which is guaranteed to give you a peace of mind as the buy-to-let market undergoes so many radical changes. Arthur provides you with complete flexibility and is excellent for multi-unit properties (no matter what size) such as: student accommodation, blocks of flats and HMOs.
Come and try our 30-day free trial today!