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What is a HMO Property? Guide to Houses in Multiple Occupation

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What is a HMO Property?

A HMO, or ‘House in Multiple Occupation’ is a privately rented property where three or more unrelated tenants from different ‘households’ share facilities such as kitchens or bathrooms. 

There has been an increasing interest in HMO’s over time, with one in five households being in the private rented sector within the UK.

Definition of an HMO

The official UK government HMO definition is a property rented out by at least three people who are not from one household. Within this legal definition, a ‘household’ refers to buildings occupied by members of the same family, meaning if it were the case that a family who live together were to move into a privately rented property, it would not be classified as a HMO. 

Various types of residential buildings can be classified as a HMO. A House in Multiple Occupation could be anything from a shared house, a bedsit, to a hostel or shared student accommodation.

What are the types of HMOs? 

There are various types of HMOs that would require a licence if a landlord were to operate them. The House in Multiple Occupation types to look out for if you’re a letting agent or landlord are the following:

Bedsit HMO

This type of HMO offers separate rooms, incomplete essentials or floor-by-floor rentals are bedsit houses in multiple occupations. These properties contrast to regular multiple occupancy houses as they involve less communal living among tenants, despite the fact that they may have shared facilities like shared bathrooms, kitchens, or toilets. For this type of property, each rental is rented on an individual basis, with the agreement being different from tenant to tenant. 

Shared houses and shared flats

These properties are rented out to compatible residents such as university students, coworkers, or friends. All tenant’s names will be listed in a shared tenancy agreement, and the renters have legal possession and control over the property. 

Household with lodgers

This type of HMO is where a resident landlord will live together with their tenants from different households. The most common case of a household with lodgers is when a family takes on tenants in spare rooms, but they still share communal areas like kitchens, toilets, and dining areas.

Mixtures of rooms and flats

Often found within student accommodation and halls of residence, a mixture of rooms and flats is where tenants will have independent flats but share a communal area such as a kitchen, a common living area, or a bathroom. 

Self-contained section 257 HMOs

Another type of House in Multiple Occupation that is not strictly evident from the HMO definition is a Section 257 HMO. Section 257 HMOs are self-contained flats that sit within a converted property with their own kitchen facilities, bathroom, and WC facilities for individual use.

These buildings become classified as a section 257 HMO when they don’t comply with Building Regulations 1991 and less than two-thirds of the self-contained units are owner-occupied.

Legal requirements and regulations 

HMO licensing

If you’re a landlord or letting agent, there are strict regulations you must follow to let out a HMO. One of the most important legislations that councils use to regulate HMO landlords and properties is licensing.

A HMO licence is required for properties across the UK with five or more tenants forming two or more households to have tenants live in the property. This is known as mandatory licensing – all landlords and letting agents are expected to obtain a mandatory licence for a large HMO to be compliant with the council.

There are further licensing requirements which local authorities can introduce at their discretion. These include additional licensing schemes for smaller HMOs, in which three or more tenants forming two or more households will be required to obtain a licence.

Operating an unlicensed property makes you liable to fines and a rent repayment order from the local council of up to £30,000. Use our free property licence checker today to get a free report on the licensing requirements for your property.

Article 4 Directions

If the council in which you plan to operate a house in multiple occupation has an article 4 direction, it could restrict you from the ability to convert a regular dwelling into a HMO.

These legislations mean that permitted planning permissions are restricted if a local council chooses to instate one. You may require planning permission to convert your property into a HMO where you otherwise wouldn’t need to.

Responsibilities of Landlords and Tenants

To operate a HMO, landlord’s are required to abide by strict regulations. These include providing tenants with a tenancy agreement and obtaining references before renting. Landlords must also supply occupants with essential documents like the ‘How to Rent Guide,’ gas safety certificates, and contact information.

Additionally, landlords are responsible for maintaining property conditions, conducting regular inspections, ensuring safety standards, and addressing any repairs promptly.

Tenants also share the responsibility of maintaining cleanliness of shared areas, respecting the property and other occupants in the process.

How to Determine if a Property is an HMO

To determine if your property will meet the definition of an HMO, they should meet the following conditions: 

  • The building is occupied by three or more people forming two different households 
  • The building has shared facilities such as a kitchen, bathroom, or communal living areas 
  • The building could also be a self-contained flat that does not meet building regulations 1991 and have less than two thirds of the self-contained flats being owner-occupied 

Landlords need to consult local authority guidelines if they believe they are operating a building classed as an HMO to ensure they are not operating an unlicensed HMO. Following council regulations is the liability for owners of a HMO. Use our free property compliance checker today to determine what requirements are necessary for your property.

Conclusion

HMOs are one of the most popular forms of living accommodation. Under the Housing act 2004, there are various regulations and compliance factors landlord’s and letting agents need to abide by to operate HMOs.

If your privately rented property is composed of three or more tenants who are not members of the same family or household, and has facilities that are shared by more than one, then you are operating a HMO could be liable to further regulation. 

Kamma provides peace of mind for letting agents and landlords alike with our automated licensing solution. We track all the HMO schemes managed by local authorities to ensure compliance. Book a demo to find out more about how we can help your agency.

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