What is HMO?
HMO stands for house in multiple occupation, also known as a ‘house share’. HMO is a property rented out by at least 3 people who are not all from the same family/household but share facilities (like the bathroom and kitchen). It’s a cheap form of accommodation, popular with students.
HMO properties can also be very lucrative for landlords. If you’re planning on buying a property to let out as a HMO, you might want to consider a few things first.
You MUST have a licence if you’re renting out a Large HMO. A large HMO is a property:
- rented to 5 or more people (from more than 1 family)
- is at least 3 storeys high
- tenants share facilities (toilet, bathroom or kitchen)
But you MIGHT need a licence for a Small HMO too, it depends on the area. Each council have their own rules and some have prohibited HMO in certain areas.
- A licence is valid for a maximum of 5 years
- You must renew your HMO licence before it runs out.
- You need separate licences for each HMO you run.
- HMO landlords also have extra legal responsibilities.
Failing to get a licence could land you in deep trouble, an illegally run HMO landed two men with £28,000 fine after a Bath & North East Somerset Council prosecution and one husband and wife landlord team had to pay £60,000 in fines and costs for HMO licensing and management offences.
The Conveyancing process for a HMO property is pretty much the same as any other residential conveyancing. Although, if you’re buying a property, and plan to use it as a HMO, you need to bring it to the attention of your Conveyancer/Solicitor!
The property you’re planning to buy may not be suitable or you might be unable to get a HMO licence. So to avoid any disappointments, check with your Council and Conveyancer before or during the conveyancing process.
How to apply for a HMO licence
You’l need to contact the council and request an HMO licence. (if you’re using a managing agent, they can apply for you). The price of a HMO licence is normally around £800, but each council sets their own fee scale. You can apply for this licence here: https://www.gov.uk/house-in-multiple-occupation-licence.