Are you aware of the new HMO changes for Landlords coming into effect soon? If you’re a landlord and own a property containing five or more people, regardless of the size of the property, in October 2018 you will be affected by the new HMO changes.
What is HMO?
The Housing Act 2004 will introduce new licencing rules for a House in Multiple Occupation (HMO) that will be in effect from October 2018. So for licensing purposes, a HMO is a house where 3 tenants live there which forms more than one household and they share toilet, kitchen or bathroom facilities with other tenants.
A large HMO is at least three storeys high, at least five tenants live there which forms more than one household and they share toilet, kitchen or bathroom facilities with other tenants.
In fact, The Ministry of Housing, Community and Local Government wants to reinforce the living conditions of the tenants. The aim of this proposal is to prohibit landlords from letting rooms to a single adult where the usable floor space is less than 6.51sqm, and 10.22sqm for a room occupied by two adults. From now on, it will be mandatory for an HMO licence to include a condition that states the maximum number of persons who may occupy each specific room in a property, as sleeping accommodation.
If you’re a HMO landlord, what are your responsibilities?
Despite of the type of property, if you’re an HMO landlord you must fulfil all the standard landlord responsibilities. Plus, there are some extra responsibilities from October 2018, legally binding whatever the content of the tenancy agreement is:
You or your letting agent on your behalf must apply for an HMO licence that specifies the maximum number of people that can live in the property. You’ll be charged an application fee, set by your local council, which will be non-refundable regardless of whether or not the licence is granted. You can find out where to apply for your HMO licence here, and renew it every 5 years.
HMO landlord must inform a number of different parties when applying for a licence: as a landlord, you must inform the freeholder of the property or any other owners of the property, tenants with a long-term tenancy contract, and the lender (if you have a mortgage).
HMO landlord must provide cooking and washing facilities, as well as rubbish bins.
HMO landlords are responsible for repairs and maintenance of common areas.
HMO landlords must ensure the safety check is carried out and the property is not overcrowded.
HMO landlords must complete a fire risk assessment. Local councils can help to conduct it properly. Also, the property must have installed proper fire safety equipment (smoke alarms and a heat detector in kitchens).
HMO landlords must ensure that a gas safety check is carried out annually and electrical systems at least once every five years.
HMO landlord must hold an up-to-date legionella risk assessment.
What do you need to bear in mind with the new HMO licensing coming into effect October 2018?
Some local council in the UK require landlords to be registered, whether or not their properties are HMOs.
Not licensing an HMO is considered a criminal offence and could be fined up to £20,000 (e.g. by renting to more tenants than are allowed for in the licence). Besides, you could be ordered to repay up to 12 months’ rent or housing benefit to the council if the tenants are in receipt of housing benefit.
If you break the terms of your licence, you could be fined up to £5,000.
If your HMO is not properly licensed, you may not be able to use a Section 21 notice for evicting tenants.
These lists are not exhaustive to find out more you can visit this guide.
What are the local authorities’ responsibilities with your property?
Your local council has to inspect the property at least once during that five years period. They need to make sure all health and safety have been complied with in your property.
Should you get landlord insurance for houses in multiple occupations up?
There’s no legal obligation for a landlord to take out a dedicated HMO landlord insurance policy. But, if you have mortgage payments on the property it’s likely your mortgage lender requires you to take out insurance (buildings insurance) before you can rent the property. Due to legal requirements, it might be wise to consider getting cover for your rental investments:
Property owners’ liability insurance – legal liability for personal injury or property damage suffered by third parties
Damaged caused by tenants
Cost of replacing
Loss of rent
You can choose from a range of covers designed for landlords, including property owners’ liability insurance, multiple properties, insurance for bedsits, personal possessions, along with buy-to-let buildings cover. Do you have suitable cover in place?
*The opinions and views expressed in the above articles are those of the author only and are for guidance purposes only. The authors disclaim any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.
Intasure - Holiday home insurance specialists -
Intasure has years of experience in the insurance industry and If you’re looking for insurance for your main residence or holiday home, you’ve come to the right place!
Intasure® is a trading name of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909 | UK Privacy Notice | EEA Privacy Notice | Legal & Regulatory Information | Cookies