Introduction to HMO Licensing
HMO licensing is a crucial aspect of the private rented sector, ensuring that houses in multiple occupation (HMOs) meet specific standards to provide safe and healthy living conditions for tenants. The Housing Act 2004 introduced mandatory licensing for larger HMOs, typically those with five or more tenants forming more than one household. This mandatory licensing ensures that these larger properties adhere to essential safety and management standards.
However, not all HMOs fall under the mandatory licensing criteria. This is where additional licensing schemes come into play. Additional licensing allows local authorities to address specific issues related to smaller or atypical HMOs that may not meet the thresholds of mandatory licensing but still pose significant health and safety risks. These schemes are implemented at the discretion of local councils to tackle poorly managed properties and improve overall housing conditions.
By introducing additional licensing schemes, local authorities can regulate a broader range of HMOs, ensuring that even smaller properties are safe, well-maintained, and properly managed. This proactive approach helps to enhance the quality of housing in the private rented sector, benefiting both tenants and the wider community.
What is Additional HMO Licensing
Additional HMO licensing is a scheme introduced under the Housing Act 2004 to help local authorities regulate smaller or atypical Houses in Multiple Occupation (HMOs) that are not covered by the mandatory HMO licensing criteria. These schemes are implemented at the discretion of local councils to address concerns about poorly managed properties that may not meet the thresholds of mandatory licensing.
The main goal of additional licensing is to improve property conditions and management standards in areas where HMOs present significant health and safety risks or contribute to local housing issues. Once in place, any HMO within the designated area that houses three or more persons from two or more households will typically require a licence under the scheme. It allows councils to tackle problematic properties and ensure safer, better-managed accommodation for tenants.
Background and Legislation
The Housing Act 2004 provides the legal framework that enables local authorities to introduce additional licensing schemes. These schemes are typically applied in areas with a high concentration of HMOs where poor property management is a recurring issue.
Before implementing additional licensing, councils must conduct a consultation period to engage with stakeholders and gather evidence of property management issues. Before implementing additional licensing, councils must conduct a public consultation and provide evidence of need—such as reports of poor housing conditions or complaints from tenants or neighbors. Once in place, any HMO within the designated area that houses three or more people from two or more households will typically require a licence under the scheme.
Types of HMO Licences
There are two main types of HMO licences: Mandatory HMO Licensing and Additional Licensing. Mandatory licensing applies to larger HMOs—typically those with five or more tenants forming more than one household. The mandatory licence is required under the Tower Hamlets Additional Licensing Scheme, which specifies conditions for properties with multiple occupants. Additional licensing, on the other hand, is aimed at smaller HMOs that do not meet the mandatory threshold but still pose management or safety concerns.
Local authorities may introduce additional licensing to cover specific property types or locations where issues have been identified. The type of licence required depends on the number of occupants, the layout of the property, and local council policy.
Eligibility and Exemptions
Not all properties fall under the scope of additional licensing. Owner-occupied properties and those that are vacant are generally exempt. Temporary exemptions may also be granted for up to three months in certain circumstances.
In some cases, a temporary exemption notice can be issued for up to three months, providing landlords with a short-term reprieve while they address licensing requirements.
Properties where less than two-thirds of the occupants are tenants (i.e., mostly owner-occupied) may not require a licence. However, self-contained flats in purpose-built blocks can still fall under additional licensing if they meet the definition of an HMO and are located in a designated area.
The Additional Licensing Scheme
Under an additional licensing scheme, any HMO with three or more unrelated individuals sharing basic amenities—such as a kitchen or bathroom—may require a licence, depending on local authority rules. This includes properties where tenants share facilities, such as purpose-built flats and converted buildings that meet the HMO criteria.
The scheme is designed to raise housing standards by ensuring that properties are safe, well-maintained, and appropriately managed. It provides councils with the tools to intervene when landlords fail to meet minimum housing standards.
Applying for an HMO Licence
Applications for additional HMO licences are generally made online. Landlords must read the relevant guidance notes before submitting their application to ensure it is accurate and complete. The application form is available online, and it is essential to include contact details such as full name, telephone number, postal address, and email address.
The proposed licence holder must be deemed a “fit and proper person,” meaning they should have no serious criminal convictions or history of poor property management. The council will assess the applicant’s suitability and may reject or revoke a licence if the applicant does not meet these standards.
Fit and Proper Person Test
The fit and proper persons test is a key component of the application process. The council will consider whether the proposed licence holder—or property manager—has a history of offences involving fraud, dishonesty, violence, drugs, or sexual misconduct.
This test ensures that only responsible individuals are granted the authority to manage HMOs. If the council finds that someone no longer meets the criteria, they can revoke the licence at any time during its term.
Licence Conditions
Once granted, the HMO licence comes with specific conditions that landlords must comply with. These often include limits on the number of tenants, requirements for fire safety systems, regular gas and electrical checks, and the maintenance of communal areas.
The licence will specify the maximum number of tenants allowed in the property, based on assessments made by local authorities.
Failing to comply with these conditions is a criminal offence and can result in a fine of up to £30,000 or prosecution. Keeping up with these requirements is essential to avoid legal and financial penalties.
Maintaining an Additional HMO Licence
An additional HMO licence is typically valid for five years, provided there are no significant changes to the property or its management. If changes occur—such as a change in ownership or a structural alteration to the building—the council must be notified.
If a licence expires, landlords must act immediately to apply for a new licence to avoid penalties.
In some cases, the licence may be issued for a shorter term, depending on the circumstances. It is the landlord’s responsibility to maintain the property to the standards required by the licence throughout its term.
Consequences of Non-Compliance
Non-compliance with HMO licensing regulations can have severe consequences for landlords and property managers. Operating an unlicensed HMO can result in an unlimited fine or a financial penalty of up to £30,000. These substantial penalties underscore the importance of adhering to licensing requirements to avoid significant financial losses.
In addition to financial penalties, tenants may be entitled to rent repayment orders, which can further impact a landlord’s income and reputation. Local authorities also have the power to take enforcement action against non-compliant landlords. This can include issuing temporary exemption notices, which provide a short-term reprieve while the landlord addresses the licensing requirements, or interim management orders, where the local authority takes over the management of the property.
The introduction of additional licensing schemes has given local authorities more power to regulate the private rented sector. Landlords must stay informed about these changes and ensure their properties comply with all relevant licensing requirements. Failure to do so can result in severe penalties, damage to reputation, and potential loss of income. Understanding and complying with HMO licensing regulations is essential to avoid these consequences and ensure the provision of safe, well-managed housing for tenants.
Overseas Landlords
An additional HMO licence is typically valid for five years, provided there are no significant changes to the property or its management. If changes occur—such as a change in ownership or a structural alteration to the building—the council must be notified.
In some cases, the licence may be issued for a shorter term, depending on the circumstances. It is the landlord’s responsibility to maintain the property to the standards required by the licence throughout its term.
Variation of a Licence
If a landlord needs to update their licensing details—for example, due to a change in occupancy or layout—they can apply for a licence variation. This involves providing the council with updated information and may require an amended inspection or revised conditions.
The local authority’s fee policy outlines the costs and procedures involved in applying for a variation.
Fees and Refunds
Licence fees vary by council and can be viewed on the local authority’s website. Fees are typically paid online using a UK-registered bank card, and many councils offer the option to make bulk payments for landlords with multiple properties.
The licensing fee is calculated based on the number of habitable rooms in the property.
Details about refunds and payment policies are usually included in a fee schedule or licence fee policy document.
Preparing for Additional Licensing
Landlords and letting agents must prepare thoroughly before applying for a licence. This includes gathering all required documentation, understanding the scheme’s conditions, and ensuring the property meets all safety and maintenance standards.
For further advice, landlords can contact the HMO team for direct assistance.
Guidance notes and application forms are available online, and it’s recommended to consult them closely to avoid delays or rejections.
Further Guidance
For specific queries or tailored advice, landlords should contact their local council. Most councils provide additional support through licensing teams, and some offer one-on-one consultations or workshops.
It is also important to ensure that any conversions comply with building regulations to avoid legal issues.
Further information can also be found on the UK government’s website, which outlines national HMO standards and landlord responsibilities.
Conclusion
Understanding and complying with additional HMO licensing is essential for landlords managing smaller HMOs. These schemes are designed to improve tenant welfare and maintain quality standards across the private rented sector.
By staying informed, meeting all licence conditions, and maintaining high standards of property management, landlords can avoid penalties and ensure their properties remain legally compliant and safe for occupants.
