Multiple occupancy homes

Under the changes in the Housing Act 2004, if you let a property which is one of the following types it is a House in Multiple Occupation (HMO):

An entire house or flat which is let to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet (for a definition of household see the next subsection).
A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to three or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.
A converted house which contains one or more flats which are not wholly self contained (i.e. the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by three or more tenants who form two or more households.
A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.

In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence and the same will apply to properties which are used as domestic refuges.

What is a ‘household’ for the purposes of a HMO?

The following are 'households' for the purposes of the Housing Act 2004:

Members of the same family living together including:
- Couples married to each other or living together as husband and wife (or in an equivalent relationship in the case of persons of the same sex).
- Relatives living together, including parents, grandparents, children (and step-children), grandchildren, brothers, sisters, uncles, aunts, nephews, nieces or cousins.
- Half-relatives will be treated as full relatives. A foster child living with his foster parent is treated as living in the same household as his foster parent.
- Any domestic staff are also included in the household if they are living rent-free in accommodation provided by the person for whom they are working.
Therefore three friends sharing together are considered three households. If a couple are sharing with a third person that would consist of two households. If a family rents a property that is a single household. If that family had an au-pair to look after their children that person would be included in their household.

Houses in multiple occupation licensing

The Housing Act 2004 came into force on April 6 2006.

The act introduces the mandatory licensing of Houses in Multiple Occupation (HMOs), as from 6 April 2006 it is compulsory to licence larger, higher-risk HMOs.

Frequently Asked Questions(FAQs)

Q1. Why does the Government want HMOs to be licensed?

A1.Larger HMOs, such as bedsits and shared houses, often have poorer physical and management standards than other privately rented properties. It is widely accepted that HMOs often contain the worst housing conditions and the greatest risk of fire. 3 Storey or more HMOs pose the greatest risk to the health and safety of the occupiers.

The people who live in HMOs tend to be amongst the most vulnerable and disadvantaged members of society and as HMOs are the only housing option for many people, the Government recognises that it is vital that they are properly regulated and therefore the Landlord or managing Agent of those properties is now legally required to hold a licence.

Licensing is intended to make sure that:

Landlords of HMOs are fit and proper people, or that they employ managers who are
each HMO is suitable for occupation by the number of people allowed under the licence
the standard of management of the HMO is adequate
high risk HMOs can be identified and targeted for improvement.

Q2. Do I need a licence for my HMO?

A2. The Housing Act 2004 makes it compulsory to licence all Houses in Multiple Occupation that are:

three or more storeys, including basements and attics (even if the lower storeys are used for industrial/commercial use i.e. a shop)
occupied by five or more people, including children
occupied by two or more households.

If your property meets all the above conditions then it must be licensed with effect from 6 April 2006.

Q3. How will it work?

A3. Anyone who owns or manages an HMO that must be licensed has to apply to us for a licence. We must give a licence if it is satisfied that the:

HMO is reasonably suitable for occupation by the number of people allowed under the licence
proposed licence holder is a ‘fit and proper person’
proposed licence holder is the most appropriate person to hold the licence
proposed manager (if any) is ‘fit and proper’
proposed management arrangements are satisfactory, the person involved in the management of the HMO is competent and the financial structures for the management are suitable.

Q4. What are the penalties for failing to licence an HMO?

A4. It is an offence for the landlord or person in control of the property:

To fail to apply for a licence for a licensable property or
to allow a property to be occupied by more people than are permitted under the licence.
A Landlord or person acting on his behalf operating an unlicensed HMO faces a fine of up to £20,000 and a criminal record
A Landlord or person acting on his behalf who breaks any of the licence conditions faces fines of up to £5,000.

Q5. What does ‘fit and proper person’ mean?

A5. In deciding whether someone is fit and proper we must take into account:

any previous convictions relating to violence, sexual offences, drugs and fraud
whether the proposed licence holder has broken any laws relating to housing or landlord and tenant issues
whether the person has been found guilty of unlawful discrimination
whether the person has previously managed HMOs that have broken any approved code of practice.

We may carry out further checks to make sure that the person applying for the licence is a fit and proper person. It is advisable for the landlord or manager to be a member of a professionally recognised body, or an approved landlords association that is affiliated to the National Federation of Residential Landlords.

Q6. What is in a licence?

A6. The licence will specify the maximum number of people who may live in the HMO. It will also include the following conditions, which apply to every licence:

a valid current gas safety certificate, which is renewed annually, must be provided
proof that all the electrical appliances and furniture are kept in a safe condition
proof that the fire detection system is installed and functioning correctly
each occupier must have a written statement of the terms on which they occupy the property, i.e. a tenancy agreement.

We may also apply the following conditions:

restrictions or prohibitions on the use of parts of the HMO by occupants
the landlord or manager must take steps to deal with the behaviour of occupants or visitors
to ensure that the condition of the property, its contents such as furniture and all facilities and amenities, bathrooms and toilets for example, are in good working order.
to carry out specific works or repairs within a particular timeframe
a requirement that the responsible person attends an approved training course.

Q7. How long does the licence last?

A7. A licence will normally last for a maximum of five years, although it can be for a shorter period.

Q8. How much does the licence cost?

A8. The cost of the licence is £793.00

Q9. Can the Council refuse to licence a HMO?

A9. Yes, if the property does not meet the conditions set out above and / or the landlord or manager is not a fit and proper person

Q10. What will happen if we refuse to licence a HMO?

A10. Where it is deemed that a property or person is unsuitable for the granting of a licence and there is little prospect of being able to do so, the Council can eventually issue an Interim Management Order (IMO), this allows it to step in and manage the property.

The owner keeps their rights as an owner. The order can last for a year until suitable permanent management arrangements can be made. If the IMO expires and there has been no improvement, then we will issue a Final Management Order. This can last up to five years and can be renewed after that.

Q11. Can I appeal against the councils decision?

A11. You may appeal if we decide to:

Refuse a licence
Grant a licence with conditions
Revoke a licence
Vary a licence
Refuse to vary a licence
You must make your appeal to the Residential Property Tribunal.

12. Temporary exemption from licensing

If a Landlord or person in control of the property intends to stop operating as a HMO or reduce the numbers of occupants and can give clear evidence of this, then she or he can apply for a Temporary Exemption Notice.

This lasts for a maximum of three months and ensures that a property in the process of being converted from a HMO does not need to be licensed. If the situation is not resolved, then a second Temporary Exemption Notice can be issued. When this runs out the property must be licensed, become subject to an Interim Management Order, or cease to be a HMO

13. Rent repayment orders

A tenant living in the property that should have been licensed, but was not, may be able to apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of 12 months). Councils can also reclaim any Housing Benefit that has been paid during the time that the property was without a licence.

Q16. Does Tacit Consent apply?

A16. No, tacit consent would not be granted as an inspection of the property will be required and background checks carried out on applicants.

Q15.How do I apply for a licence?

A15.For further information on HMO licensing or to apply for a licence you can apply online (opens in a new window), you can also tell us about a change (opens in a new window), renew a licence (opens in a new window), or contact the:

Housing Renewal Team
Environmental Health
Merlin House
Merlin Way
Ilkeston
Derbyshire
DE7 4RA

Merlin House is not a public building and there are no facilities to receive the public there.

Tel: 0115 931 6060
email:ehgrants@erewash.gov.uk

Further information regarding licensing of HMO’s is also available on the following website - www.eastmidlandsdash.org.uk (opens in a new window).

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