Own an HMO property? Here’s your guide to new October 2018 rules

News at Townends | 13/07/2018

If you own a House in Multiple Occupation (HMO), you need to ensure you meet all of your legal obligations. From October 2018, new rules will come into effect for landlords who rent out homes with multiple tenants.

What is the change?

The major change relates to new mandatory licensing policy, which has been under discussion by the government for over two years. This policy will impose mandatory conditions and licenses on all HMO properties that meet certain criteria, and landlords will need to ensure they meet all of these obligations. The aim behind the change is not to make life difficult for landlords or tie them up in yet more red tape, but to minimise the number of unfit properties on the market and to stop rogue landlords in their tracks.

Announcing the new rules, MP Heather Wheeler said:

“Everyone deserves a decent and safe place to live.

“But some tenants are being exploited by a minority of unscrupulous landlords who profit from renting out cramped and sometimes squalid or dangerous properties.

“Today’s measures will mean landlords must provide adequate space for their tenants or face a hefty fine.

“It is part of a raft of new powers for councils to crack down on rogue landlords and comprehensive action we are taking to improve conditions for private tenants.”

Who will be affected?

If you own a property that has five or more tenants living there, in two or more separate households, your property will be affected by the new HMO rules. It doesn’t matter how many storeys your property has, as long as it doesn’t have self-contained flats.

What will I need to do?

By 1st October 2018, all landlords of qualifying HMOs will need to submit an application for mandatory HMO licensing. If you are already licensed under an existing licensing scheme, you should be passported to the new mandatory scheme automatically. It is estimated that around 177,000 HMO properties will become subject to the new licensing once it comes into effect in October.

Landlords applying for a new licence will need to meet certain standards, while landlords of existing properties will have up to 18 months to make the required changes. Some of these standards may be newly introduced by the local authority, including new minimum space requirements. These requirements are currently under discussion.

What happens if I don’t apply for mandatory licensing?

The government had previously suggested that there would be a six-month grace period for landlords of HMO properties, but this has now been withdrawn. This means that it is crucial for all affected HMO landlords to apply for mandatory licensing immediately, in time to meet the 1st October deadline. If you don’t meet this deadline, you would be breaking the law and could be fined up to £30,000.

Speak to your local branch for HMO property advice.