Landlords and letting agents are you ready?
Landlords & letting agents are reminded the deadline of 1st October 2018 is almost here. The rules on mandatory HMO licensing change come into force in England on the 1st of October 2018.
So what are the HMO changes that come in on the 1st of October 2018?
The main changes are:
- Altered definition of an HMO under the Housing Act 2004: for licensing purposes, from 1/10, an HMO will be any property occupied by five or more people, forming two or more separate households.
This contrasts with the existing HMO definition which is a property occupied by 5 or more people, forming two or more separate households and comprising three or more storeys.
- If you already have an HMO license under the current definition, this will continue to be valid until the license expiration date (usually 5 years from date of issue). After the expiration you will need to apply for a new license as usual.
- If you currently let an HMO which didn’t previously require licensing but will do after the new order comes into effect later in the year, then you will need to apply for a license through the local council.
- There is an important exception: if the property is in a purpose-built block of flats comprising 3 or more units
- Regulation 2 introduces minimum room standards for those properties falling within the scope of mandatory licensing.
The proposals will prohibit landlords from letting rooms to a single adult where the usable floor space is less than 6.51sqm and 10.22sqm for a room occupied by two adults. It will be mandatory for an HMO licence to include a condition that states the maximum number of persons who may occupy each specific room in a property as sleeping accommodation.
The government has not run any campaign’s to alert agents and landlords of the new rules for HMO’S. Some landlords and even agents are likely to in breach of the new rules for the simple fact they were not aware of the new rules.
Currently, properties of three or more storeys, shared by five or more people in two or more households, where facilities such as kitchen or bathroom are shared, must have a mandatory HMO licence.
On October 1, under the new rules the “storeys” criteria is removed and any property, of any height, that meets the other criteria must be mandatory licensed.
Nothing from the housing ministry has explained this or other new HMO rules – and yet the penalties are potentially severe enough to close a business down.
An HMO that is not licensed when the law requires it could land the agent or landlord, or both, with a criminal prosecution and record, an unlimited fine, and an order to pay court costs and a victim surcharge.
Mr Hanson from the British Landlords Association said “many landlords and agents are still not aware failure to comply with these HMO new rules that come into force 1st of October 2018 means that they could end up with a criminal record, a fine upto £30,000 and in addition render a section 21 notice defective.
Where a landlord requires possession under section 21 the section 21 notice could be deemed invalid if the landlord failed to comply with the new HMO rules. Where landlords or agents are in breach the council could issue a civil penalty of up to £30,000 and a rent repayment order of up to 12 months’ rental income.
Guides written by Tacagni for all agents and landlords is an essential read: