New legislation for landlords will come into effect on 1 October 2018. This will bring more properties into the category of “multiple occupation housing” wherein five or more people from two or more separate households live in one property. The new legislation is for HMRC to clampdown on landlords letting out overcrowded and inadequate properties.
Currently, a property is only categorised as a House in Multiple Occupation (HMO) if it has three or more storeys. However, according to the new rules, an HMO is a building or a converted flat where tenants share toilet, bathroom or kitchen facilities. As a result, an estimate of 160,000 properties will require an HMO licence.
The updated legislation also has further conditions. Landlords are prohibited to let rooms to a single adult where the usable floor space is less than 6.51 sq m. If the rooms are occupied by two adults, the room needs to be at least 10.22 sq m, while rooms slept in by children aged ten and below need to be at least 4.64 sq m.
Local councils will have the discretion to require larger room sizes but will not have the authority to allow smaller rooms to be occupied. If a landlord is found to be letting room that doesn’t meet the minimum requirements, local authorities can grant landlords up to 18 months to rectify the situation. Penalties of up to £30,000 will incur if no action is taken in this time and it will be considered as a breach of licence. Moreover, further update on the legislation includes a requirement for landlords to have an adequate number of bins. Failure to do so is also considered as a breach of licence and criminal offence.
In terms of House in Multiple Occupation (HMO) requirements, landlords must ensure that the manager of the house, which is the landlords or agent, is fit and proper. This means that they must not have any criminal records or history of breaching landlord laws. Landlords are also required to send the council a copy of their gas-safety certificate annually, install and maintain smoke alarms, and provide safety certificates for all electrical appliances.
Landlords who are currently holding HMO licence can continue to let their property until it expires. They will then have to apply for new licence and make changes to their property in order to meet the new rules.
If you are a landlord who wants to apply for HMO licence, you can contact your local council. Licences are valid for five years and you need to separate licence for each HMO property you own.