Why the Government wants HMOs to be licensed
Larger HMOs, such as bedsits and shared houses, often have poorer physical and management standards than other privately rented properties. It is widely accepted that HMOs often contain the worst housing conditions and the greatest risk of fire.
The people who live in HMOs tend to be amongst the most vulnerable and disadvantaged members of society and as HMOs are the only housing option for many people, the Government recognises that it is vital that they are properly regulated and therefore the landlord or managing agent of those properties is now legally required to hold a licence.
Licensing is intended to make sure that:
- Landlords of HMOs are fit and proper people, or that they employ managers who are.
- Each HMO is suitable for occupation by the number of people allowed under the licence.
- The standard of management of the HMO is adequate.
- High-risk HMOs can be identified and targeted for improvement.
When a licence is needed for a HMO
The Council operates a mandatory HMO licensing scheme. From 1 October 2018 all HMOs with five or more occupants, forming two or more households, regardless of the number of storeys, have required licensing.
This means that:
- HMOs with five or more occupants forming two or more households;
- Flats within a converted building, where the flat itself is a HMO with five or more occupants forming two or more households, and
- Flats within purpose-built blocks with either one or two flats, where the flat is a HMO with five or more occupants forming two or more households, will require a HMO licence.
- If your property meets all the above conditions then it must be licensed.
How it works
Anyone who owns or manages an HMO that must be licensed has to apply to us for a licence. The Council must give a licence if it is satisfied that the:
- HMO is reasonably suitable for occupation by the number of people allowed under the licence.
- Proposed licence holder is a ‘fit and proper person’.
- Proposed licence holder is the most appropriate person to hold the licence.
- Proposed manager (if any) is ‘fit and proper’.
- Proposed management arrangements are satisfactory, the person involved in the management of the HMO is competent and the financial structures for the management are suitable.
Penalties for failing to licence an HMO
It is an offence for the landlord or person in control of the property:
- To fail to apply for a licence for a licensable property or
- To allow a property to be occupied by more people than are permitted under the licence.
A landlord or person acting on their behalf:
- Operating an unlicensed HMO faces a fine of up to £20,000 and a criminal record.
- Who breaks any of the licence conditions faces fines of up to £5,000.
The meaning of ‘fit and proper person’
In deciding whether someone is fit and proper the Council must take into account:
- Any previous convictions relating to violence, sexual offences, drugs and fraud
- Whether the proposed licence holder has broken any laws relating to housing or landlord and tenant issues
- Whether the person has been found guilty of unlawful discrimination
- Whether the person has previously managed HMOs that have broken any approved code of practice.
We may carry out further checks to make sure that the person applying for the licence is a fit and proper person. It is advisable for the landlord or manager to be a member of a professionally recognised body, or an approved landlords association that is affiliated to the National Federation of Residential Landlords.
What is in a licence
The licence will specify the maximum number of people who may live in the HMO. It will also include the following conditions, which apply to every licence:
- A valid current gas safety certificate, which is renewed annually, must be provided.
- Proof that all the electrical appliances and furniture are kept in a safe condition.
- Proof that the fire detection system is installed and functioning correctly.
- Each occupier must have a written statement of the terms on which they occupy the property such as a tenancy agreement.
We may also apply the following conditions:
- Restrictions or prohibitions on the use of parts of the HMO by occupants.
- The landlord or manager must take steps to deal with the behaviour of occupants or visitors.
- To ensure that the condition of the property, its contents such as furniture and all facilities and amenities, bathrooms and toilets for example, are in good working order.
- To carry out specific works or repairs within a particular timeframe.
- A requirement that the responsible person attends an approved training course.
How long the licence lasts and the cost
A licence will normally last for a maximum of five years, although it can be for a shorter period.
The cost of a new licence is £894.
Can the council refuse to licence a HMO?
Yes, if the property does not meet the conditions set out above and / or the landlord or manager is not a fit and proper person.
Where it is deemed that a property or person is unsuitable for the granting of a licence and there is little prospect of being able to do so, the Council can eventually issue an Interim Management Order (IMO) which allows it to step in and manage the property.
The owner keeps their rights as an owner. The order can last for a year until suitable permanent management arrangements can be made. If the IMO expires and there has been no improvement, then we will issue a Final Management Order. This can last up to five years and can be renewed after that.
Appealing against the council's decision
You can appeal if the Council decides to:
- Refuse a licence
- Grant a licence with conditions
- Revoke a licence
- Vary a licence
- Refuse to vary a licence
You must make your appeal to the First-Tier Tribunal on gov.uk. Erewash is covered by the Midlands Region.
Temporary exemption from licensing
If a landlord or person in control of the property intends to stop operating as a HMO or reduce the numbers of occupants and can give clear evidence of this, then they can apply for a Temporary Exemption Notice.
This lasts for a maximum of three months and ensures that a property in the process of being converted from a HMO does not need to be licensed. If the situation is not resolved, then a second Temporary Exemption Notice can be issued. When this runs out the property must be licensed, become subject to an Interim Management Order, or cease to be a HMO.
Rent repayment orders
A tenant living in the property that should have been licensed, but was not, may be able to apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of 12 months). Councils can also reclaim any Housing Benefit that has been paid during the time that the property was without a licence.
Tacit Consent
Tacit consent would not be granted as an inspection of the property will be required and background checks carried out on applicants.
Apply for a licence
Apply using the online form.