Does Your Property Need a HMO Licence?
Whether you are a landlord of a house in multiple occupation, thinking of doing your first HMO conversion, or a tenant in a houseshare, it is crucial to figure out if a licence is necessary. The specific licence required is dependent on various factors, such as the number of tenants residing in the property, how the facilities are shared, and the policies of the local council. There are three potential types of licences that your property might require:
Mandatory HMO Licence:
A HMO requires a Mandatory HMO Licence if it is occupied by at least five individuals from different households, and at least one of them pays rent. Additionally, the tenants must share facilities such as bathrooms, kitchens, or toilets. If your HMO meets these criteria, it must be licensed.
Local authorities may introduce additional licencing if they perceive that a considerable number of HMOs are causing problems and being poorly managed. Before introducing additional licencing, the council must ensure that it aligns with the housing strategy and is part of a coordinated approach. Usually, additional licencing applies to HMOs with three or more tenants from different households. Read this house of multiple occupancy article for a definition of households.
If a property doesn’t meet the mandatory licencing criteria but still poses a threat to the health, safety, or well-being of the tenants, it may require a selective licence. The local council has the authority to determine which properties require this type of licence by considering its own policies and guidelines. A selective licence may require any or every rented property in a specific location to have a licence.
If you are the owner of a HMO, it is essential to check with your local council to determine whether your property requires a Mandatory, Additional, or Selective licence. This will ensure that you comply with all relevant regulations and provide a safe living environment for your tenants. Read more about HMO licence requirements.
Check if a HMO is Licensed
If you are a tenant and want to check if the property you live in is licenced, the first way to do this is to contact your local council’s private housing department. This department is responsible for licensing and regulating HMOs, and they can provide information about your property’s licencing status.
In case you encounter difficulties while working with the local council, you can also make a Freedom of Information Request to obtain information about your property’s HMO licence status. This request enables you to access information that public authorities hold, including the licensing status of your property. You can read more about making a Freedom of Information Request on our HMO Licence Check article.
Advice for Tenants in Unlicenced HMOs
Living in an unlicenced house in multiple occupation (HMO), or house share, can be a daunting experience for tenants, particularly if they are new to the rental market. HMOs are properties where three or more people from different households share communal facilities such as the kitchen, bathroom, or living area. These types of properties, more often than not, are subject to additional legal requirements to ensure that they are safe and suitable for multiple occupants.
Unfortunately, not all landlords comply with these legal requirements, and some HMOs operate without the necessary licence. This can result in poor living conditions, inadequate facilities, and potential health and safety risks for tenants. As a tenant in an unlicenced HMO, it is essential to know your rights and what steps you can take to protect yourself.
Below, we will provide advice for tenants living in unlicenced HMOs, including information on your rights and what to do if you are living in one. We will also discuss the potential risks and hazards associated with unlicensed HMOs and provide tips on how to stay safe and protect your health and wellbeing.
Tenants Rights Living in an Unlicenced HMO
If you have read the above and think you are now living in an unlicenced HMO, it is now important to understand your rights and what legal options are available to you.
Landlords Cannot Evict You
If you are a tenant living in a property that should have HMO licence a landlord will find it very hard, if not impossible, to evict you. Whether or not you have signed a tenancy agreement, you are still considered a tenant and have legal rights under UK law. This is because a tenancy agreement can be formed through a verbal agreement or through the conduct of both parties. This means that even if you have not signed a written agreement, or have a tenancy agreement that looks as though the landlord has added things, you still have a legal right to reside in the property and are still protected by UK law. You can read more about this in our HMO Tenancy Agreement article.
The two most common methods of eviction are serving a section 21 notice and serving a section 8 notice. A section 21 notice is also known as a ‘no-fault’ eviction notice, as it can be served even if the tenant has not breached any terms of the tenancy agreement. This notice gives the tenant at least two months’ notice to vacate the property. On the other hand, a section 8 notice is served when a tenant has breached the terms of the tenancy agreement. This notice can have different notice periods depending on the type of breach, ranging from immediate possession to two months’ notice.
If a landlord serves a section 21 notice and the property is being run as an unlicenced HMO, the notice will be invalid, and the tenant has the right to stay in the property. So, if a landlord serves you a section 21 and you don’t move out, the landlord can take you to court, however in court the judge will declare that you do not have to move out.
Furthermore, even if you are in breach of the tenancy agreement, such as not paying rent, a landlord cannot simply serve a section 8 notice and expect you to leave. Again, if a landlord serves you a section 8 and you don’t move out, the landlord can take you to court, however in court the judge will declare that you do not have to move out – even if you have not been paying the rent.
Tenants Can Reclaim Rent Payments
You may also be entitled to reclaim rent payments if you have lived in an unlicensed HMO. Under the Housing Act 2004, tenants can apply for a Rent Repayment Order to recoup up to 12 months of rent paid to the landlord or agent. This legal mechanism is available to tenants who have suffered from poor living conditions or potential health and safety hazards as a result of residing in an unlicensed HMO.
To apply for a Rent Repayment Order, you must submit an application to the London Residential Property First-tier Tribunal. The tribunal will then review your case and determine whether you are eligible for a repayment. If successful, you will be reimbursed for the rent you have paid while living in the unlicensed HMO.
Potential Risks Associated with Unlicenced HMOs
Deposits of tenants in unlicenced HMOs are frequently not protected or returned. If a landlord does not protect a tenant’s deposit, they are breaking the law as per the Housing Act 2004. The Housing Act 2004 requires landlords to place their tenants’ deposits in a government-backed tenancy deposit scheme within 30 days of receipt. This scheme ensures that tenants’ deposits are safeguarded throughout the tenancy and that they are returned at the end of the tenancy, provided that there is no damage to the property or unpaid rent.
If a landlord fails to protect their tenants’ deposits, they are breaking the law, and the tenant has the right to take legal action against the landlord. The tenant can apply to the courts for compensation of up to three times the deposit amount. The court can also order the landlord to protect the deposit by placing it in a tenancy deposit scheme.
Harassment and Illegal Eviction:
It is common for rogue landlords and agents of unlicenced HMOs to harass their tenants and try to evict them illegally. Harassment can take many forms, such as repeatedly visiting the tenant’s property unannounced, making unreasonable demands, or engaging in abusive or intimidating behaviour.
Illegal eviction occurs when a landlord or agent tries to force a tenant to leave their property without following the proper legal procedures. This can include changing the locks, cutting off utilities, or physically removing the tenant’s belongings from the property.
Both harassment and illegal eviction are illegal under UK law. Tenants who experience harassment or illegal eviction can take legal action against their landlord or agent. They can report the incident to their local council, who may prosecute the landlord or agent if they are found to be in breach of the law.
Tenants can also seek legal advice from a solicitor or contact a housing charity such as Shelter or Citizens Advice for support. It’s essential for tenants to know their rights and understand the legal procedures for eviction. If in doubt, they should seek professional advice to protect themselves from rogue landlords or unscrupulous agents.
Ways to File a Complaint Against a HMO Landlord
Tenants who are living in a House in Multiple Occupation (HMO) and believe that their landlord is not adhering to the rules and regulations set forth by the Housing Act 2004 can take steps to file a complaint. Firstly, contact your landlord and try to solve any issues amicably. If your landlord is operating an unlicensed HMO they may not want to cooperate.
The next step would be to contact the environmental health department of the local council. The environmental health department is responsible for enforcing HMO regulations, including those related to safety, health, and hygiene.
The tenant should provide as much information as possible, such as dates and details of any incidents or violations, to support their complaint. This information will be used by the environmental health department to determine the best course of action, which may include issuing an enforcement notice to the landlord or prosecuting them for a breach of the law.
If the tenant’s complaint is found to be justified, the environmental health department may take action to ensure that the landlord complies with the rules and regulations. This may include fines, penalties, or requirements to make improvements to the property, or to get a HMO licence.
If you need help with a landlord who is operating an unlicensed HMO, feel free to contact us for consultation.
Consequences for Non-Compliant HMO Landlords
Landlords who run unlicensed Houses in Multiple Occupation (HMO) face severe consequences for non-compliance. Under the Housing Act 2004, which was amended by the Housing and Planning Act 2016, these consequences can include unlimited fines, civil penalties of up to £30,000, rent repayment orders, and even imprisonment.
In addition to the above, it is important to understand the Proceeds of Crime Act (POCA), which is a UK law that aims to stop organised crime and money laundering. The POCA empowers law enforcement to confiscate the proceeds of crime and pursue criminal charges against those involved in money laundering. This means that if you are caught operating an unlicensed HMO, your property may be seized, frozen or restrained, and you may face criminal charges.
Under the POCA, any property obtained through criminal activity or intended to be used in further criminal activity is considered “criminal property”. The act prohibits the concealment, transfer, or conversion of criminal property, as well as the acquisition, use, or possession of it. This means that if you continue to operate an unlicensed HMO, you may be considered involved in criminal activity.
The Asset Recovery Agency (ARA) was created under the POCA to recover the proceeds of crime. The agency can investigate and seize assets obtained through criminal activity, including cash, property, and other valuables.
Examples of HMO Landlords Fines and Prosecutions
- In 2017, a landlord in Birmingham was sentenced to 8 months in prison for operating an unlicensed and unsafe HMO property that had numerous safety hazards, including faulty gas appliances and inadequate fire safety measures.
- In 2018, a landlord in Sheffield was fined £190,000 for operating an unlicensed HMO property that was in a poor condition and had numerous safety hazards, including exposed wiring and a lack of fire safety measures.
- In 2018, a landlord in London was fined £1.5 million for renting out an unlicensed HMO property that had serious safety and fire hazards.
- In 2019, a landlord in Leeds was sentenced to 9 months in prison for operating an unlicensed and unsafe HMO property that had serious fire and electrical hazards, as well as inadequate sanitation facilities.
- In 2021, a landlord in Luton was fined a record-breaking £500,000 for operating an unlicensed and unsafe HMO property that had numerous safety hazards, including faulty electrics, damp, and inadequate fire safety measures.
Tips for Landlords Unlicensed HMO Properties
It’s not uncommon for long-term landlords to find themselves in a difficult situation when they discover they have an unlicensed HMO property. The local council may have introduced an additional licensing scheme that you were unaware of, and now you face potential consequences, including eviction issues, rent repayment orders, and even criminal charges.
The initial step for landlords is to check whether their property requires an HMO licence. However, landlords need to be cautious as providing their address to the council may lead to their property being reported as unlicensed. It’s advisable to take control of the situation and complete a few tasks before notifying the council about the property’s status. It’s always better to come forward and admit that the property is unlicensed rather than being caught out.
If the property does not meet the legal requirements for the HMO licence, landlords should take steps to improve it first. This may involve making structural changes or installing safety features such as fire alarms and escape routes.
Next, landlords must apply for an HMO licence and invite the council for an inspection. The application process may involve providing documentation, such as proof of ownership, fire safety certificates and tenancy agreements. At this point, landlords need to be careful as the council may ask how long their tenants have been residing in the property, which can reveal that the landlord has been running an unlicensed HMO.
Throughout this process, landlords should communicate with their tenants. However, if landlords have potentially problematic tenants, they need to proceed carefully. If tenants discover that their landlord has been running an unlicensed HMO, unwittingly or not, they may stop paying rent, refuse to vacate the property, request a rent repayment order, and more.
If you are unintentionally operating an unlicensed HMO and are looking for solutions, feel free to contact us for consultation.
It is crucial for landlords and tenants to understand the requirements and regulations surrounding Houses in Multiple Occupation (HMOs) and licencing. Landlords must ensure that they comply with all relevant regulations to provide a safe living environment for their tenants. Meanwhile, tenants should know their rights and what steps they can take to protect themselves, including filing complaints and seeking legal advice if necessary.
Operating an unlicensed HMO can have severe consequences for landlords, including unlimited fines, rent repayment orders, and even imprisonment, so it’s essential to take action if your property requires a licence. Ultimately, compliance with HMO licencing regulations is essential for creating a safe and secure environment for all occupants.
If you are a tenant, landlord and require any consultation on anything you have read in this article, or a HMO landlord looking for HMO lettings and HMO management in South London, feel free to contact us.