HMOs - Guide to Understanding Houses of Multiple Occupation

Published: 24/01/2025

What is an HMO (House in Multiple Occupation)? Definition & Licensing Guide

An HMO (House in Multiple Occupation), also known as a House of Multiple Occupancy, is a rental property, either a house or flat, rented to two or more tenants from different households. The definition of an HMO is set out in the Housing Act 2004.

Do You Need an HMO License?

Whether or not you need an HMO license depends on factors such as the number of tenants, the specific council district, and the rental property's location. To help you navigate the rules, here are some essential questions and answers regarding HMO licensing.

Understanding HMO Licensing

What is HMO licensing?

An HMO is a rental property where three or more individuals from two or more households live together, sharing common facilities like kitchens and bathrooms.

Types of HMO Licenses:

1. Mandatory Licensing
2. The local council must license large HMOs with five or more tenants sharing facilities. This is required by law across England.
3. Additional Licensing
4. This license is required for properties with 3-5 tenants (from two or more households) sharing facilities. Additional licenses are not required in every council area, but many councils, particularly in London (e.g., the Royal Borough of Greenwich and Tower Hamlets), enforced these rules in 2024.
5. Selective Licensing
6. Under the Housing Act 2004, some councils can implement selective landlord licensing for privately rented properties in designated areas. If your property is in one of these areas, you must apply for a license with your local council.

Determining Your Property's Licensing Needs

If your property has five or more unrelated tenants sharing common facilities, you will most likely need an HMO license. For smaller HMOs, check with your local council for details. Some rental properties may be exempt, so always verify this information with your local authority.

Meeting HMO Licensing Standards

To obtain an HMO landlord license, your property must comply with specific safety and habitability standards, such as:

• Gas and electrical safety compliance
• Proper installation of smoke alarms
• A valid tenancy agreement for each tenant
• Proof that you are a fit and proper person to manage the property

These standards ensure the property is safe for tenants to live in and that you meet the required landlord responsibilities.

Applying for an HMO License

The application process for an HMO license is completed through the local council portal. Be sure to gather the necessary documents, including:

• Room sizes and floor plans
• Details about the property's structure
• Safety equipment and compliance certificates

Additionally, you'll need to join a landlord accreditation scheme to demonstrate your commitment to responsible property management. Check your local council's website for specific accreditation schemes.

Renewing Your HMO License

Renewing your HMO license is typically a simple process. You can apply for a new license in the same way as your initial application. Licensing fees are usually divided into Part A (paid on application) and Part B (paid when the license is issued).

License Costs and Duration

The cost of an HMO license varies depending on your local council. Typically, HMO licenses are valid for five years, though some councils may reduce this to three years if they identify poor management practices or other concerns. Keep an eye on the expiry date and local council regulations for any changes.

Consequences of Breaching HMO License Conditions

Failing to comply with HMO licensing regulations can result in serious consequences, including:

• Criminal prosecution or a criminal record
• Large fines up to £30,000
• The potential for tenants to apply for a Rent Repayment Order (RRO), allows them to reclaim rent for up to 12 months.

Non-compliance can also affect your ability to renew your license in the future, as you must pass the fit and proper person test.

Appealing Council Decisions

If you disagree with your council's decision regarding your HMO license application, you have the right to appeal to the First-tier Tribunal (Property Chamber). Make sure to submit your appeal within 28 days of the council's decision.

Need Help with HMO Licensing?

If you're new to property management or unsure about HMO licensing requirements, consider contacting Circa London Sales & Lettings. We are a letting agent who can provide expert advice and guidance. We're here to help with any questions you may have about HMO licensing or other property-related concerns.

By understanding HMO licenses, you ensure the safety and legality of your rental property while protecting yourself from potential fines or legal issues.

Contact us today to discuss your property and how we can assist you in staying compliant with all relevant regulations.




*NB This blog is for guidance purposes only