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If a property is to be let to multiple occupiers who are not a family unit, the local authorities may class it as an HMO. These types of property can be an excellent investment opportunity but also need to be regulated, licensed and inspected for the safety of the occupants. Below is a definition of what may be classed as an HMO bt guidance should be taken from your local authority. For further guidance just ask a member of the Davis Tate Lettings Team.
Definition of an HMO
An HMO can be a building or part of a building if it is:
Occupied by persons who form more than one household, and where those persons share (or lack) one of more basic amenities, such as a WC, personal washing and cooking facilities; or
A converted building containing one or more units of accommodation that do not consist entirely of self-contained flats. (There is no requirement that the occupiers share facilities); or
A converted building consisting entirely of self-contained flats, where the building work undertaken in connection with the conversion did not comply with the 1991 Building Regulations and more than one third of the flats are occupied under short tenancies.
The HMO must be occupied by more than one household:
As their only or main residence; or
As a refuge by persons escaping domestic refuge; or
During term time students; or
For some other purpose that is described in regulations.
In all cases:
Occupation of the living accommodation must be the only use of that accommodation; and
Rents are payable or other considerations are provided.
Under the Act, a household comprises:
A single person; or
Co-habiting couples (whether or not of the opposite sex); or
A family (including foster children and children being cared for) and current domestic employees.
Certain types of buildings will not be HMO’s for the purpose of the Act. They include:
Buildings, or parts of buildings, occupied by no more than two households, each of which comprise a single person only (for example, two person house or flat shares); or
Buildings occupied by a resident landlord with up to two tenants; or
Buildings managed or owned by a public sector body, such as the police, local authority, registered social landlords, fire and rescue authority and the NHS; or
Buildings occupied by religious communities; or
Student halls of residence where the education establishment has signed up to an Approved Code of Practice; or
Buildings occupied entirely by freeholders or long leaseholders;
Buildings regulated otherwise than under the Act, such as care homes, bail hostels, etc, and the description of which are specified in regulations.
Definition of an HMO requiring a Licence:
The act requires landlords of many Houses in Multiple Occupation (HMOs) to apply for licences. The HMOs that need to be licensed are those with:
Three or more storeys, which are:
Occupied by five or more people forming two or more households (ie people not related, living together as a couple, etc), and
Which have an element of shared facilities (eg kitchen, bathroom, etc).