There are so many different laws, regulations and guidelines we need to consider as HMO landlords, so it’s no wonder that a relatively minor change to the HMO Mandatory Licensing regulations has sent a lot of people’s heads into a spin.
The current (as at March 2018) arrangements are that any HMO occupied by 5 or more people over 3 or more storeys requires Mandatory Licensing.
Under the new rules however, this will be expanded to include ALL HMO’s occupied by 5 or more people, regardless of the number of storeys in the building. Having said that, the government have decided to exclude multi-occupied purpose built flats in blocks comprising three or more self-contained flats. The expectation is that the government will write new, specific rules for blocks of purpose built flats (especially in light of what happened at Grenfell).
My property is in an area designated for Additional Licensing and I already have an Additional License – do I need to apply for a Mandatory License?
Yes. The new Mandatory rules supersede the Additional Licensing for any HMO with five or more occupiers. If you have less than five occupiers, the new Mandatory rules won’t apply to you, so your property will remain as an Additional Licensable property.
The Licensing of Houses in Multiple Occupation (Prescribed Description)(England) Order 2018 comes into force on 1 October 2018.
All licence applications will need to be submitted before the Order comes into force, so if a valid application is submitted by 1 October 2018, landlords and agents will be compliant with the licensing scheme.
What happens if you miss the deadline?
Failing to apply for a licence by 1 October 2018 means both the landlord and the letting agent risk being prosecuted and given a hefty fine, or the council could choose issue a civil penalty of up to £30,000 for not having the correct licence and the landlord can be subject to a Rent Repayment Order, being liable to repay up to 12 months rent.
Also, whilst the property is unlicensed, the landlord can’t use a Section 21 Notice to evict the tenants.
If you have any HMO’s that fall under the new regulations for Mandatory Licensing, get your applications submitted now, before it’s too late.