|
Under the new HMO licensing rules due to come in force from April 2006, many landlords are finding that their properties will now qualify as a 'house in multiple occupation' or HMO. The definition of an HMO has been revised under the Housing Act 2004, and is, essentially, any house or flat occupied by more than two people who do not form a single household, and share an amenity. For the purposes of the HMO rules, a household could be either a single person, a family, or a co-habiting couple. Therefore, under the new definition, a family will classify as a household, whereas a group of individuals sharing a house will normally be considered as multiple occupation.
Not all buildings that are HMO's will need to be licensed. The Government has defined that the current threshold for licensing will be buildings with three or more storeys (including any sub-floor basement) and five or more occupants.
From the date of introduction, it will be an offence to operate an HMO without being licensed by the local authority. Unfortunately, due to the complexity of the new legislation, and Government delays in setting the secondary legislation and publishing the related guidance, many local authorities have not been able to accept new licence applications. Enforcement will not start until July giving a short period in which to make the application.
Under the new HMO definition, many landlords will be required to register - whereas previously they managed to avoid licensing by claiming that the tenants shared the house, and lived in the manner of a single household. According to Richard Perrin of the South Devon Residential Landlords Association, many local authorities are finding that the new tighter rules are already backfiring when it comes to providing housing for young or vulnerable people. Houses that used to be let as rooms for bedsits to young people are being increasingly redeveloped into self-contained flats to avoid the requirement for HMO licensing, and the availability of simple low cost accommodation is drying up.
Landlords should also beware that the HMO legislation appears to suggest that once a building has become licensable, then it may not be “unlicensed”. Because, this could cause a drop in the building's value, HMO landlords need to consider very carefully whether they wish to continue letting as an HMO after April, and the costs of any conversion and safety work that the local authority may require of them if they do.
Many
local authorities will, by now, have set their standard licence
rates for HMOs - houses in multiple occupation.
Plymouth City council have set their standard HMO licence
at £690, Torbay at £400 and Wandsworth at £1,100.
The
Council of Mortgage Lenders has warned that new regulations
introduced as part of the Housing Act 2004 could make mortgage
lenders very reluctant to lend on student houses and other types
of multiple occupation property. Ultimately, this could reduce the
number of places available. From April 2006 landlords will require
a licence if their property is of three or more storeys and is let
to five or more tenants in separate households.
Landlords will be required to improve the safety of the
accommodation and will have to provide fire escapes and additional
bathrooms if the property does not meet local safety standards.
The mandatory requirement for safety improvements in high
risk properties is a useful outcome of the legislation but further
extension of the legislation into lower risk property will make
rental housing more expensive to provide.
Research from Mortgage Trust showed that 46% of landlords are ignorant of the Houses in Multiple Occupation regulations planned for 2006. The lender also expresses concerns that the implementation of HMO licensing may create upward pressure on rents, with 48% of landlords with HMOs saying that they may put their rents up.
Confidentiality
notice This information has been prepared for the clients and contacts of Rent24 The information and opinions expressed in this document are not necessarily comprehensive and do not purport to give professional advice.
More: Mandatory
Licensing Additional Licensing
and Selective Licensing are not how it reads. These can mandatory
too. If you own a flat
which you rent out to a friend or you let rooms out in your own
home you may need a Licence
HMO
consisting of three or more stories and is occupied
by
What flow diagrams and questionnaires found on other sites do not clarify are:
Rent24 can help you determine with certainty whether a property needed a licence. When you come to
Additional and Selective Licensing then this becomes even more
confusing. Additional and Selective Licensing is set by each
individual council. They can decide whatever they want.
1. Determining whether you need a licence or not We will present your case to the council in where the property is located. We will firstly ask you the right questions about your property. So we will ask about the exact details of the storeys, tenants and households within the property so that we have a full understanding of the set up. We ask you that you be completely honest with us. We will help you through the maze to comply with your obligation to get, or not have to get a licence legally, based on the information we know. Secondly we will email the answers to these questions to the relevant person at the council. 2. Applying for a licence within the legally prescribed time If it is deemed that, on the face of it, you need a licence then we will fill out the licence application form for you to sign and then send on. There will be no form filling out on your part. Any details we need to know that you haven't already provided us will be gathered from you by phone or email. 3. Communicating with the local council with any issues they may have Any issues that the council may have with what you have answered on the application will be dealt with by us. This could be minor details such as when the property was bought or when it was modified etc. We expect This to happen infrequently but if it does you can be assured that we will handle all matters. 4. Obtaining the licence and organising payment Once all matters have been sorted we will then see it through to you actually obtaining the licence. So this will include arranging payment and delivery of the licence to your preferred address. The fee for this service will be £200+VAT per property. We will determine whether you need a licence and get a direct answer from the council your property is located in. If a licence is required we will do everything possible to legally eliminate the requirement. If the licence is still deemed to be obtained then we will do everything involved so that the licence arrives on your doorstep before the legal deadline. As rental agents and
property investors we are facing this problem head on. |
||||||||||||||||||||
|
New
Legislation Regarding HMOs
Chartered
Institute of Environmental Health
http://www.odpm.gov.uk/index.asp?id=1151996
|