House in mulitiple occupation (HMO) rules
The rental market is currently softening, and as a result, many landlords are having to compete against each other for tenants, and in some cases lower their expectations for the type or profile of tenants they’ll accept. With that in mind, we’ve seen some letting agents showing family houses to sharers in an attempt to get them rented.
For any readers who are landlords, it’s important to remember that renting out a property to sharers isn’t always that straightforward. Putting aside the increase in expected wear and tear costs and tenant turnover, there are the legalities to consider too.
When renting out a property to sharers, you may fall within HMO (House in Multiple Occupation) rules. The definition of what constitutes a HMO varies between Scotland, Northern Ireland, England and Wales so it’s worth checking. In England and Wales, a HMO is defined as a property rented out by at least three people from separate households (i.e. they are unrelated by blood or marriage) and where they share facilities such as a bathroom and kitchen. This set up is more commonly referred to as a house share.
For those properties which are rented to five or more people who are not from the same household and are at least three storeys high, a mandatory HMO licence is required and needs to be obtained from the local authority. The licence lasts for five years and requires the landlord to make sure the property is compliant with certain standards such as installing smoke detectors and fire doors.
Do bear in mind, though, that even if your property is smaller and rented to less people, you may still need a licence, depending on which area the property is located in, because local authorities have the power to vary the conditions of a HMO licence. Therefore, always check with your council to be 100% sure you’re complying as a landlord.
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