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News/Articles
| New HMO Regulations |
10/07/2006 21:27:21 |
There has been a lot of press coverage of the new HMO (Houses of Multiple Occupancy) licensing regulations that took effect from April 2006 and Paul Cole, Managing Director, provides the answers below to some of the more commonly asked questions.
Q. What is an HMO?
A. An HMO relates to a building or part of a building that is occupied by three or more households and in which more than one household shares an amenity such as a bathroom, toilet or cooking facilities, including converted buildings with flats or bedsits. A household is defined as families, including single persons and co-habiting couples.
Houses with only two households are exempt from this category and therefore the regulations only apply if there are three or more tenants in a property, whether professionals or students.
Q. Which properties require a Licence?
A. Not all HMOs are to be subject to licensing. The Housing Act 2004 has introduced 3 licensing schemes that will regulate different types of HMOs.
Mandatory Licensing: This scheme applies to all HMOs comprising of 3 or more storeys (including attic or basement conversions) and occupied by 5 or more persons comprising of 2 or more households. All local authorities must introduce this type of licensing scheme on April 6th 2006.
Additional Licensing: This scheme may be applied to smaller HMOs which fall outside the scope of Mandatory Licensing. Local authorities have discretion to introduce this type of licensing scheme where it is considered as a necessary means of improving conditions in smaller HMOs.
Selective Licensing: This scheme may be applied to any private rented property/housing within a designated area that is affected by low demand and/or anti-social behaviour. Local authorities have discretion to introduce this type of scheme where it is considered necessary.
Currently the three local authorities that cover our regions, Southampton, Winchester and Eastleigh, are all introducing Mandatory Licensing only, from 6th April 2006. There is a potential they may introduce further schemes at a later date, but no proposals or announcements have yet been made.
Q. How much will a licence cost?
A. Any licence issued will be valid for 5 years. The cost of applying for a licence will differ depending on the Local Authority and also the size of the property. Additional costs will also be incurred if the property requires work and needs to be re-inspected. The licence is not transferable to new owners if the property is sold during the 5 years it is valid.
Currently, it is estimated that the basic cost for a licence for a 5 bedroom shared property in Southampton will be c.£550. This is excluding the cost of any remedial work necessary to ensure the property meets the regulations.
Temporary Exemption Notices can be applied for a property for a period of 3 months if it is demonstrated that steps are being taken to ensure the property no longer requires a licence, for example if it is being sold or the number of tenants being reduced. In exceptional circumstances a further 3 months exemption can be gained, but this is the maximum.
Running a property without a licence or breaching the terms of a licence is a criminal offence and can incur fines of up to £20,000.
Q. What are the main requirements for a licence?
A. In order to grant a licence the Council must be satisfied that:
- The dwelling is reasonably suitable for occupation by no more than the permitted number of persons or households
- The licence holder is a fit and proper person
- There are adequate management arrangements
- Mandatory conditions are met;
- Annual gas safety certificate
- Maintained smoke alarms
- Safe furniture & electrical appliances
- Written statement of terms provided to tenants
- Local Authority additional conditions are met
Currently none of the Local Authorities in the region we cover have published a definitive list of property requirements over and above the mandatory ones, but if or when they do they are likely to relate to regular electrical testing and installation of fire doors.
Q. What do I do next?
A. We have requested an application form for all fully managed properties that fall into the mandatory licence category. We will liaise with the Landlords of relevant properties to agree the strategy on an individual basis.
The cost of any work needed to bring a property to the required standard and of obtaining a licence will be a Landlord cost. It may therefore be a consideration to let the property to a smaller number of tenants in the short term until the work can be done.
Where can I find out more?
A. We will provide further updates concerning the requirements and costs for individual houses that require mandatory licensing as and when the council publishes them. You can also contact the office to discuss your particular property.
You may also want to check the following websites for further information;
Southampton City Council
Winchester City Council
Government information site
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