HMO licensing changes from October 2018

From the 1st October 2018 the national rules on HMO licensing are changing so that they cover a lot more properties. If you own or manage an House is Multiple Occupation (HMO), your must apply for a licence before October 1st 2018.

New HMO licences

There are already mandatory (nation-wide) licensing requirements for HMOs and some councils have additional HMO licensing beyond the mandatory rules.

Thousands of additional properties will required an HMO licence from the 1st October 2018 as the rules are changed to capture smaller HMO properties. The regulations that all HMO properties must meet are also changing from October.

What’s an HMO for licensing purposes?

From the 1st October 2018 any dwelling, regardless of the number of floors is an HMO if the tenants consist of 5 or more people from 2 or more households (which roughly equates to them not being related).

Previously smaller HMOs – those with only one or two floors were not included in the mandatory licensing requirements, but from October these smaller HMOs also require a licence.

The licensing process

A licence application means you must complete a form and provide supporting documents. Some authorities use an online process, others provide an application form that must be printed and filled in.

Details needed for an application will generally include:

  • Applicant information
  • Licence holder information
  • Manager and owner contact details (including mortgage provider and the freeholder)
  • Details to confirm the licence holder is a “fit and proper person”
  • Planning permission (if more than six tenants)
  • Building regulations approval, if there have been significant changes, refurbishment, etc (including just internal work)
  • A floor plan showing rooms, sizes, smoke detectors, etc
  • An example tenancy agreement

Building safety requirements

To pass the licensing process the building will need to meet a number of safety requirements. You’ll need to consult the guidance from the relevant council but some common key points are:

  • Three storey buildings require emergency lighting, occasionally two storey buildings will too if the exit route is “complicated”.
  • 30 minute fire doors (three storey), with self closers.
  • 20 minute fire doors (two storey), with self closers.
  • Multi purpose fire extinguisher on each floor.
  • Fire blanket in the kitchen (away from the cooker).
  • No key should be required to get out of rooms. Multiple types of lock/mechanism are available to support this.
  • HMO noticeboard required in a common area with contact details, EPC, gas safety and a copy of the HMO licence.
  • PAT testing for all electrical appliances must be done every year.

Door closers should be on all habitable rooms on the escape route plus “at risk” rooms, ie kitchens. Bathrooms and toilets likely do not require door closers.

Room sizes

Another big change in the mandatory HMO requirements from 1st October are the new minimum bedroom sizes. Some councils have already included these in their additional licensing but for many they will be new.

The raw size requirements are:

  • Single adult bedroom: 6.51 m2
  • Double adult bedroom: 10.32 m2
  • Child (under 10) bedroom: 4.64 m2

Things to be aware of when measuring your room sizes:

  • En-suite bathrooms do not count
  • You cannot combine multiple rooms (regardless of whether the tenant has exclusive access to them)
  • Areas with a ceiling under 1.5m high do not count
  • The *floor* space must be usable as an actual floor

Licence cost and duration

The cost of a licence varies for each council, ranging from a few hundred pounds to over one thousand pounds. The cost is also dependant on the type and size of the HMO being licensed.

An HMO licence will generally last for five years.

The council may choose to issue a licence that’s valid for less than five years in some circumstances, eg if they feel any details about the landlord or property may need early review.

Issuing process

Be aware that the council will issue a draft licence to everyone involved in the property, including any mortgage company and the freeholder. This means a property cannot be licensed without their knowledge.

The mortgage company may object, although it shouldn’t be grounds for the council to refuse a licence. However it may trigger an issue with the mortgage provider!

Timing – new licences and renewals

All properties that fall under the new mandatory HMO definition must apply for a licence before 1st October 2018. It’s quite likely that not all licences will be issued before October 1st though.

The new room sizes will not apply to existing (ie larger, 3 floor HMO) licences until that licence is due for renewal.

Finding unlicensed properties

Once the good landlords have all applied to new HMO licences, how will councils find the bad landlords who haven’t?

Councils can collect tips about an HMO from a number of sources, such as:

  • deposit protection schemes
  • council benefits team
  • planning applications
  • social workers
  • health workers
  • neighbours

Penalties

Failing to license an HMO when it’s required can result in prosecution and fines of up to £20,000. This can apply whether you’re the owner or manager of such a property.

Source and Video

These details are based on a presentation I attended by the person responsible for HMO licensing in Crawley. You can read some more details about the event, presentation and Crawley specific information here.

Keep track of your licences

You can keep track of all your licences, safety certificates and other HMO property details in Property and Tenant Manager. You’ll receive automatic reminders when renewals are due and your documents will always be available at a moments notice.

New How to Rent Guide – July 2018

It wasn’t long ago that the Government issued their last update to the How to Rent Guide but it seems there were a couple of minor issues that warranted an urgent fixing release.

Officially announced on the 9th July, but actually sneaked out a few days before, you can find the latest release of the Governments How to Rent guide here.

All tenants must be provided with a copy of this guide at the start of a new tenancy. Given that it seems the version issued on June 26th may have been incorrect (it didn’t use the legally recognised document title), we recommend re-issuing the latest version for any tenancies that started on or after the 26th of June.

If you’re using Property and Tenant Manager, re-issuing the latest guide is as simple as:

  • Visit the recently started tenancy
  • Open the tenancy start checklist
  • Click the link to send “required tenant documents”

That’s it, your tenants will receive the latest guide by email.

The latest cover now looks like this:

How to Rent Jul 2018 Cover

 

 

The How to Rent guide is issued by the Ministry of Housing, Communities and Local Government. You can download the PDF directly here.

How to issue the guide to tenants

So what’s the best way to legally issue the How to Rent guide to your new tenants?

Well the simplest method is to use the automated tenancy start process in PaTMa. Just enter the basic information for your new tenancy and tenants, click to generate the AST and send it straight to your tenants for online signing. The default AST template includes provision for serving the How to Rent guide (and other documents) by email. So once your tenants have signed up, it’s just another click to send them a complete welcome pack – including the How to Rent guide, the property’s EPC, your latest gas safety certificate and your chosen deposit scheme terms.

We’ll always make sure the latest How to Rent guide is included – you’ll never have to worry about checking with the Ministry of Housing and downloading the latest guide again.

If you prefer the manual approach you can always email the guide yourself – just make sure your tenancy contract allows for it.

Or for those few who’d really rather collect bits of paper, the guide can be printed out and physically handed to your tenants. However the electronic version of the guide does include lots of links to extra information so I really recommend issuing the PDF version if you can.