HMO in property circles is an abbreviation for the words House in Multiple Occupation. It's pretty self-explanatory in the sense that it's for a house or apartment which is rented out to more than one tenant (in fact a minimum of three). An HMO licence is necessary if this is the case.
This licence is a piece of paper (or electronic document) which states that the house is habitable ie. it passes health and safety guidelines in terms of there being a fire plan, it has adequate facilities and complies with other local authority stipulations for HMO status. Indeed it's your local authority that administers the licence and each local authority may have slightly different qualifications so it's worth checking locally rather than going on to a national website for clarification.
How do I know if I need a licence?
A licence is necessary if the property you intend to let out comprises a number of bedsits where the tenants share kitchen and bathroom facilities, the house is shared but each tenant with the property has their own tenancy agreement with you or, as we mentioned earlier, the house has three or more non-related people in it. It could also be the case that the property requires an HMO if it contains studio flats yet comprises some shared facilities.
Another qualification for the HMO licence is that each tenant uses the property as their main residence and the building itself is used for accommodation purposes (rather than a mix of office space/accommodation).
A property will also come under the HMO banner if it has three or more habitable storeys (including the one you might live in and also counting basements and attics which are occupied by tenants) and at least five people living in at least two households. Under the terms of an HMO licence a household is classed as a family or a couple who are cohabiting. Students sharing a house wouldn't be counted as a single household but rather a multiple one. By the same reckoning, a couple sharing with another individual in a property would be referred to as two households.
What does the council HMO inspection involve?
An official from the local authority will inspect your property prior to your letting it to ensure it meets with their conditions. Within a few months they will also do a follow-up visit to ensure that regulations are being complied with - at which point the HMO licence should be duly issued.
HMOs and Fire Safety
Fire Safety is a 'biggie' in terms of HMOs thanks to tragic past incidents in a number of HMOs and blocks of flats. The Regulatory Reform (Fire Safety) Order 2005 (FSO) is the Bill which must be complied with from your council's point of view.
To be officially listed as an HMO your property must have a fire plan which all tenants are familiar with, there should be recognised escape routes, fire fighting equipment such as a fire blanket and fire extinguisher, and a fire detector combined with some sort of warning system.
Other points regarding an HMO licence
REMEMBER: Each council can have it's own rules on what counts as an HMO and what needs to be licensed - so make sure you know the rules for your council!
If you are in any doubt at all as to whether your property requires an HMO licence - and you can't face the red tape involved in contacting the local authority - then please ring us here at Property Go-To Girl. We'd be more than happy to offer advice and help out if we can.
I'm Jacquie the Property Go-To Girl. I am passionate about property. I love to help people make the most out of their property investments!