LEADING THE WAY IN OFF MARKET PROPERTY INVESTMENTS

What are HMOs? A Comprehensive Overview

HMO stands for House in Multiple Occupation used to describe a property shared between different people owned by a private landlord. Examples of this are: 

  • Several bedsits in one building 
  • A hostel 
  • Halls of residence (private) 
  • A shared house 
  • A block of converted flats 
  • Individual shared self-contained cluster flats. 

There is a wide range of property types that can fall under this umbrella. A simple rule to remember is one property where three or more tenants share a toilet, bathroom, and kitchen – this might be an HMO. The main factor of an HMO is the number of “households” that live in one property. 

Key standards of HMOs 

There are three standards that an HMO must meet: safety, sanitation, and facilities, due to the number of people living together. These standards must be upheld by the landlord, to ensure a good quality of living. 

First is safety – smoke and carbon monoxide alarms must be in place. In addition, each year, gas checks must take place whilst electrical system checks happen every five years. 

Next is sanitation – washing and cooking facilities must be of an adequate standard and, there must be appropriate rubbish disposal systems in place. 

Finally, the housing facilities – shared and communal areas must be repaired and maintained by the landlord to a good standard, and they must avoid overcrowding the property. 

Life in an HMO 

A benefit of living in an HMO is the possibility of making friends, with some people coming to enjoy the communal environment and build relationships with the other tenants. Another aspect is the price – it is more affordable than renting alone. 

One thing to expect in an HMO property is a somewhat frequent need for repairs and replacements. With several people sharing facilities, wear and tear are more intense due to the high frequency of use. Tenants must notify the landlord of a repair, such as repairs to electrical wiring, water and gas pipes, fixed heaters, radiators and water heaters, sinks, basins and toilets, and the structure of the building (walls, gutters, windows etc.) these are the responsibility of the landlord. Whereas minor repairs – changing a light bulb, for example, is something the tenant can do. 

Differences between an HMO and a non-HMO property 

Every local council’s Environmental Health Department is responsible for health and safety complaints in HMOs, and they have the power to compel landlords to rectify the problems. However, in a non-HMO property, the local council is less likely to act with complaints. A landlord and or manager of an HMO property can face prosecution by the council and take over the property management. 

HMO licensing 

Checking if the landlord has a valid licence is a good idea if you live in an HMO. An HMO landlord without a licence is fined 12 months rent and unable to use the section 21 notice procedure in a contract. 

However, not all HMO properties require a licence. In most cases, it is needed when a building is three storeys high at least, when at least two different households are living together, or a total of five unrelated people or more live in the building. 

If a property meets the requirements aforementioned, a landlord should apply to obtain their licence from the local authority. During the process, the local authority will look at the size and safety features of the property and whether the person applying is suitable to be an HMO landlord. 

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