Landlords who have not complied with legislation introduced last year to protect tenants in multiple occupancy properties are now facing massive fines.
A recent case involved a landlord being fined £40,000 for not having a licence for a house in multiple occupation and for failing to ensure the property was safe for the tenants. The reported failings included no working fire alarm on the ground floor and padlocks to bedroom doors which could delay emergency escape.
Rules introduced last October saw revised criteria for mandatory licensing of houses in multiple occupations – known as HMOs. Where a property is an HMO it must satisfy special requirements regarding fire and general safety, utility supplies and management of communal areas. Under the extended regulations for mandatory licensing, buildings of less than three storeys may now be classified as an HMO, if they house five people or more in two or more separate households with shared kitchen, bathroom or toilet facilities.
If properties are not in a safe and habitable condition, with relevant emergency protection in place, then HMO licences will be refused, with local authorities showing they will take enforcement action against landlords who do not comply with their obligations.
A Supreme Court ruling last year confirmed it was lawful for local authorities to limit the class of persons that could occupy a specific HMO and impose conditions beyond the mandatory ones contained in the legislation. In that case the licensing the local authority permitted for the property was limited occupation to students, meaning any non-student tenants would put the landlord in breach of their licence.
As well as being a criminal offence to let a property without obtaining a licence, or failing to comply with conditions of the licence, landlords with an unlicensed HMO may face a rent repayment order, obliging them to return any rent received from the occupiers. Also, they would be unable to issue Section 21 eviction notices to recover possession from tenants, as these can’t be served while a licensable HMO does not have a licence. The knock-on is that a landlord is likely to be in breach with any borrowing on the property, as a lender may be unable to recover vacant possession in these circumstances.
Any lender is also likely to expect specific conditions to be complied with regarding compliance with the HMO rules and landlords should be aware that most lenders have specific HMO products and do not allow standard buy-to-let loans to be used if the landlord intends to let the property as an HMO.”
Last year’s legislation also introduced new requirements on bedroom sizes in HMOs, related to the age and number of people using the room.
Additionally, any room that is smaller than 4.64 m2 must be reported to the local housing authority, irrespective of its purpose.
It’s important for landlords to note that a lot of properties that were previously not in the HMO category are now included, so they should seek advice on their individual situation, if they aren’t sure whether they currently comply.