Widespread reforms are on the way that will affect some landlords with HMO properties - If you own one of the 500 private properties in Coventry currently listed as Houses in Multiple Occupation (HMO) you need to be aware that licensing changes are to be introduced on 1st October 2018.
The government deadline is when the Licensing of Houses in Multiple Occupation (England) Order 2018 automatically replaces the 2016 Order meaning no further time will be granted for landlords to make the required changes.
The regulations look set to bring widespread reform to how some landlords have let their properties in recent years.
Currently, the private rented sector accounts for 4.5 million (20 per cent) of households in England, according to the
Department for Communities and Local Government (English Housing Survey 2015-16) and there are an estimated 508,000 HMOs across the country. The government forecast that around 160,000 HMOs will become licensable for the first time under local council schemes.
Changes to the definition of a HMO property
In recent years there has also been a significant rise in the use of smaller properties, notably, original “two-storey family houses”, and even flats for use as HMO accommodation. From 1st October 2018 the mandatory licensing of HMOs is extended to cover rental properties with five or more persons Contained within one storey or more.
It goes further to say that two or more of the occupying households share one or more of the basic amenities, even if the property is not made up of self-contained flats and is treated as a main residence.
Landlords of properties falling under the new specification will need to obtain a new licence. There are many more new regulations that may need to be addressed to comply obtain a licence including room sizes, a current gas safety certificate, a current electrical inspection report (EICR), emergency lighting, smoke detection/fire alarms to name but a few and we suggest that if you think that you will be affected by this new licencing order that you seek expert advice.
Each licensable HMO will require its own separate licence, which lasts for a period of 5 years. The cost of an HMO licence tends to vary in different local council areas as the government does not set a specific fee or impose a charge limit.
What are the consequences if you do not comply with the new regulations?
New substantial penalties are to be introduced to replace some of what has widely be perceived as too lenient fines previously imposed by the courts for breaches of HMO regulations. An unlicensed HMO property could incur a penalty of up to £30,000 or face prosecution in a magistrate’s court with an unlimited fine. The landlord could also be made to forfeit any profits made while renting the property illegally and be forced to repay the rent collected.
Please remember it’s not just the ‘rogue landlords’ who might fail to comply with the new HMO licensing conditions who face prosecution after the October 1st deadline. There will be landlords who may not be fully aware of what is now legally required. It is absolutely crucial for landlords to seek expert advice without delay.