HMO and Buy to
let
Houses in Multiple Occupation (HMO)
If you are letting a property to more than two tenants then there
is a possibility that the let property will need to be licensed.
Licensing let properties was
introduced under the Housing Act 2004.
Mandatory HMO licensing began on April 6th 2006.
From July 3rd 2006 all liable landlords who have not applied for
a licence will face enforcement action which can include fines up to
£20,000.
Is your property a HMO
A property is classed as a HMO if it satisfies all of the
following:
- A house or flat that is let to 3 or more tenants
- At least 2 of the tenants are unrelated
- The tenants share facilities (kitchen, bathroom etc)
If you intend to let the property to one family then HMO
licensing will not apply
Does your property need a HMO licence
Check with your
local authority as different councils have different
requirements
Mandatory licensing will be required if all the following circumstances
apply:
- A house or flat that is let to 5 or more tenants
- At least 2 of the tenants are unrelated
- The tenants share facilities (kitchen, bathroom etc)
- There are at least 3 floors to the property
A separate licence is needed for each property. A licence cannot
relate to more than one property.
You cannot transfer a licence to another person. A landlord can
nominate someone else to be the licence holder however that person
needs to be a fit and proper person for the task, for example a
building manager or agent.
The local authority will be responsible for licensing.
What are the minimum standards required for a HMO
licence
The applicant must be a fit and proper person. The
local authority will seek to establish whether the applicant has any
unspent criminal convictions. Or whether there has been any history
of problems relating to housing or the letting of housing. The
property will need to satisfy the local authorities standards. These
standards will vary between local authorities. HMO and buy to
let mortgages
HMO will be an issue with buy to let lenders. Think about how you
intend to let this property. Please discuss with your
mortgage advisor. next...Investment
property |
