An HMO (House in Multiple Occupation) is usually a property that is mutually shared by three or more occupants, who are not related. This will typically be a shared house, flat or bedsits.
The profit rates are usually better on this setup for landlords, but this is balanced by the need for larger property management and added regulations. With HMOs, it is quite common for the landlord to be in charge and responsible of the Council Tax.
The definite legal description of HMO contained in the Housing Act of 2004, is remarkably extensive. For example, if the property which has been converted into flats does not have precise building regulations, it may rank as an HMO, but the custom-built flats will not.
When buying a property to rent, make sure to seek some legal advice from a professional as to whether the property could pass as an HMO or not.
Houses in Multiple Occupation which has 3 or more storeys and are occupied by 5 or more individuals, come under the compulsory licensing system. Other HMOs may also be licensed, but that matter depends on the local authority.
However, if the property requires to be licensed, the landlord should keep these factors in mind:
- The registration requires a fee
- The property must be up to an acceptable standard
- The landlord and their corresponding associates must be fit and appropriate for the business
The Housing Health and Safety Rating System
The local authority will evaluate whether a property is up to a suitable standard by utilizing the Housing Health and Safety Rating System.
This is an evaluation system that examines the current state of a property and identifies the probability of ‘hazards’ that could be present. This ranges from the state of the property’s exteriors to the level of dampness and sanitation, as well as to assess if the property is on a proper condition.
Fire Guidelines for HMOs
HMOs usually have stricter fire guidelines, which would include specific requirements than any other tenanted properties. They involve:
- Fire systems to be checked regularly
- An escape route with fire self-closing resistant doors
- Fire equipment such as fire blankets and fire extinguishers
- Fire alarms all throughout the entire building and in high-risk areas
Restrictions on Landlords
The HMO system potentially places substantial costs on landlords.
If you are thinking about buying an HMO, it is crucial to cautiously assess the ground with an appropriate local authority, and with a skilled fire officer.
Lastly, if the landlord is unable to manage the property themselves, they need to ensure that an appropriate management is present and the manager should fulfil the meticulous regulations made by the ‘Management of Houses in Multiple Occupation Regulations of 2006’.
Table Of Contents
- Landlords Home Letting guide Intro
- Responsibilities Of A Landlord
- Landlords and Houses In Multiple Occupation
- Letting A Room In Your Own Property
- Contracts With The Tenants
- Pros And Cons Of Hiring A Letting Agent
- Landlord Letting Insurance
- Tenancy Deposit Schemes
- Evicting Tenants
- Difficulties That May Arise With Tenants