Despite the issue of guidance documentation by the government following the launch of mandatory licensing for HMOs on 6th April 2006 confusion still reigns as to what constitutes a HMO amongst property owners and housing authorities alike.
In very basic terms if you own and let a property which falls into any of the categories below you are required to apply for a property licence
- A property converted to bedsits which is let to three or more tenants which form two or more households sharing facilities such as a kitchen, toilet or bathroom.
A converted property occupied by at least 3 tenants forming at least 2 households where the units are not completely self contained such as a house split into two flats which do not each have their own kitchen, bathroom and toilet.
A property or flat which is let to at least 3 tenants forming at least two households sharing a kitchen, toilet or bathroom.
A property converted into flats where at least one third of the tenancies are on a short term lease agreement and the property does not comply with the 1991 Building Regulations.
To obtain a licence the property will need to meet minimum standards in terms of condition, fire safety, overcrowding and management practices.
In our experience this can result in significant cost to the landlord particularly in terms of the upgrade of fire alarm systems and the protection of escape routes.
Whilst the enforcement of these requirements by Local Housing Authorities seems to be random in nature these costs are a risk that existing HMO landlords and potential purchasers should beware.
As a practice Evans Jones has dealt with more than 20 instances of HMO enforcement action both under national legislation and local licensing schemes. Costs range widely but it would not be uncommon for a landlord of a HMO containing 7-8 flats to be faced with a bill of £15,000 for a new fire alarm system without taking into account any fire protection works or repairs.
Whilst we have achieved some savings through negotiations with housing authorities the potential costs should not be underestimated.
Evans Jones are happy to provide initial advice over the phone but we would certainly recommend that those considering the purchase of a HMO or the conversion of a building into one commission a survey to identify the likely requirements.
Equally for existing landlords we would suggest that an assessment is made as soon as possible to enable you to plan for the cost of remedial works and prevent the risk of enforcement action which can result in a fine of up to £20,000but perhaps more importantly unplanned expenditure.
If you are still unsure as to ‘What is a HMO?’ or how to deal with an enforcement notice or potential purchase then please contact us for further advice.