What is Mandatory Licensing? HMO Guide to Council Licences

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What is Mandatory Licensing?
Mandatory HMO licensing schemes were established under the Housing Act 2004 to regulate certain types of rental properties across England. They apply specifically to Houses in Multiple Occupation (HMOs) that meet certain criteria, ensuring higher standards of safety and management in the private rented sector.
The government introduced mandatory schemes to improve the quality and safety of shared housing. This type of scheme aims to protect tenants living in larger shared properties by enforcing strict compliance with health and safety standards.
Understanding Mandatory Licensing
Local authorities require landlords to obtain a mandatory licence for any property that qualifies as a large HMO. A property needs this type of licence if it is rented to five or more people who form more than one household and share common facilities like kitchens and bathrooms.
Mandatory licensing ensures that landlords maintain their properties to a high standard, protecting tenants from substandard living conditions. The scheme applies uniformly across all councils, providing a consistent framework for managing larger shared properties.
There are other forms of HMO licensing such as selective licensing schemes and additional licensing, but these are implemented at each local council’s discretion. On the other hand, mandatory HMO licence regulations will apply nationwide, across the UK & Wales.
Criteria for Mandatory Licensing
Properties require a mandatory licence if they meet the following criteria:
- The property is rented to five or more people forming more than one household.
- The tenants share essential facilities such as kitchens, bathrooms, or toilets.
- The property or flat meets the definition of an HMO as outlined by the local council.
Local councils may impose additional conditions on licences, such as ensuring that properties meet specific safety and management standards.
What is Meant by a 'Household'?
In the context of property and licensing regulations, a “household” refers to a single unit of occupancy within a dwelling, typically defined by familial or living arrangements. A household may consist of a single person living alone, or a family living together.
Individuals who are not related but share these facilities, like a group of friends or professionals cohabiting, are considered separate households. In the case of mandatory conditions, if there is more than one person from a separate ‘household’ in a property occupied by five or more people, then it will require a mandatory HMO licence.
How Do I Successfully Apply for a Mandatory Licence?
If your property meets the criteria for an HMO, you must apply for a licence through your local council. The licence application process typically involves:
- Completing an application form available on the council’s website.
- Providing necessary documentation, including an EPC certificate, Gas Safety Certificate, and Fire Safety measures.
- Paying the required licensing fee, which varies by council.
Once the application is submitted, the property may be inspected to ensure compliance with licensing conditions. The conditions to obtain a licence may vary slightly from council to council. The conditions often include maintaining proper facilities (i.e. meeting minimum room sizes, maintaining cleanliness), ensuring safety measures are in place, (i.e. fire alarms or carbon monoxide alarms), and adhering to occupancy limits.
What Happens If I Don't Get a Mandatory Licence?
Failing to obtain a mandatory licence for a property that qualifies as an HMO can result in severe penalties. Landlords may face financial penalties and fines of up to £30,000 per unlicensed property and rent repayment orders for up to 12 months. Additionally, landlords could be listed on local and national databases of rogue landlords, which can damage their reputation.
If you are unsure whether your property requires a HMO licence, consider using our free property licence checker. We provide detailed information on licensing requirements specific to your property.
What Do My Mandatory Licensing Fees Go Towards?
The fees collected from mandatory licensing are used to support the enforcement and inspection of rental properties. These funds help councils maintain property standards and ensure compliance with licensing regulations.
Importantly, the funds raised by mandatory licensing are ring-fenced, meaning they are reinvested into housing enforcement and improving living conditions rather than contributing to general council funds.
Conclusion
Staying informed about mandatory licensing is essential for all landlords with properties qualifying as HMOs. Compliance ensures the safety and well-being of tenants and protects landlords from significant penalties.
If your property requires a mandatory licence, it’s crucial to act promptly and ensure all conditions are met. At Kamma, we automate licensing for 100+ letting agents, reducing the risk of non-compliance and streamlining the process. Please book a demo to find out how we can assist you.
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