Mandatory Licensing under Part 2 of the Housing Act 2004 applies to all properties that are three or more storeys with five or more occupants (who form two or more households).
From 1 October 2018, the legislation regarding the Mandatory Licensing of Houses in Multiple Occupation (HMOs) has changed. The storey-height criteria has been removed. This means that any HMO that is occupied by five or more persons who form two or more separate households, and who share basic amenities such as a kitchen, bathroom or toilet, will require a licence.
Government has issued Guidance for Local Authorities and landlords, as business owners, should make themselves familiar with the legislation that covers their business, and seek professional advice as required in order to comply with the law.
It is the landlord's responsibility to ensure that an application is made. Officers are happy to give advice and guidance to anyone wishing to discuss their circumstances. Please contact the Housing Renewal Team on 0115 931 6060 for more information.
A landlord who fails to apply for a licence will be committing a criminal offence. Where HMOs are found which meet the criteria for licensing, but no application has been received, action shall be taken in line with the Council’s Enforcement Policy. Options include a criminal prosecution.
Multiple occupancy homes
Under the Housing Act 2004, if you let a property which is one of the following types it is a House in Multiple Occupation (HMO):
- An entire house or flat which is let to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet (for a definition of household see the next subsection).
- A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to three or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.
- A converted house which contains one or more flats which are not wholly self contained (i.e. the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by three or more tenants who form two or more households.
- A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.
In order to be an HMO, the property must be used as the tenant's only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence and the same will apply to properties which are used as domestic refuges.
What is a ‘household’ for the purposes of a HMO?
The following are 'households' for the purposes of the Housing Act 2004:
- Members of the same family living together including:
- Relatives, including parents, grandparents, children (and step-children), grandchildren, brothers, sisters, uncles, aunts, nephews, nieces or cousins.
- Half-relatives will be treated as full relatives. A foster child living with their foster parent is treated as living in the same household as their foster parent.
- Any domestic staff are also included in the household if they are living rent-free in accommodation provided by the person for whom they are working.
- Therefore three friends sharing together are considered three households. If a couple are sharing with a third person that would consist of two households. If a family rents a property that is a single household. If that family had an au-pair to look after their children that person would be included in their household.
Amenities & Space Standards
The Council’s requirements relating to room sizes and the number of kitchen and bathroom amenities within the HMO will vary depending on the number of individuals occupying the HMO.
The Council currently specifies the standards given in the DASH Amenities & Space in HMOs guidance. When specifying the kitchen amenity requirements within the DASH guidance, the Council would define the types of occupation of the HMO as follows:
HMOs where occupants live as a cohesive group
The Authority would class this as a shared-house-type HMO, where each occupant would have their own bedroom but they share the kitchen, dining facilities, bathroom, WC, living room and all parts of the house. All the tenants will have exclusive legal possession and have control of all parts of the house, including all bedrooms.
HMOs with more distinct units of accommodation and where occupants tend to live separately
The Authority would liken this a bedsit-type-house, where each bedroom typically contains individual cooking facilities, but alternatively there may be shared cooking facilities or a mixture of the two. Each bedsit or letting will be let to separate individuals who will live independently with little or no communal living between tenants. Each letting will have its own tenancy agreement and there will usually be a lock on each individual letting door.
Houses in multiple occupation - Licensing
The Housing Act 2004 came into force on 6 April 2006 and introduced the mandatory licensing of Houses in Multiple Occupation (HMOs). So it is compulsory to licence larger, higher-risk HMOs.
Houses in multiple occupancy - Register
Open the register of licensed houses in multiple occupancy in Erewash (Excel document).
Frequently Asked Questions (FAQs)
Q1. Why does the Government want 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.
Q2. Do I need a licence for my 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.
Q3. How will it work?
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.
Q4. What are the 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.
Q5. What does ‘fit and proper person’ mean?
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.
Q6. 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, i.e. 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.
Q7. How long does the licence last?
A licence will normally last for a maximum of five years, although it can be for a shorter period.
Q8. How much does the licence cost?
The cost of a new licence is £793
Q9. 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
Q10. What will happen if the Council refuses to licence a HMO?
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.
Q11. Can I appeal against the council's decision?
You may 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 (Property Chamber). Erewash is covered by the Midlands Region.
Q12. 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
Q13. 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.
Q14. Does Tacit Consent apply?
No, tacit consent would not be granted as an inspection of the property will be required and background checks carried out on applicants.
Q15. How do I apply for a licence?
For further information on HMO licensing or to apply for a licence you can apply, tell us about a change or renew a licence online or contact the:
Housing Renewal Team
Environment and Housing Services
Tel: 0115 9072244 Ext. 3820
For further information regarding licensing of HMOs visit the DASH Services website.