I saw a very interesting story on the BBC recently, which reminded me of the perils awaiting any landlord not obtaining a House in Multiple Occupation (HMO) Licence.
In the Tribunal’s decision in Leeds, a landlord was ordered to repay 12 months rent in the sum of £15,000 to his tenants because he failed to obtain a HMO Licence.
An HMO is a building or part of a building if it is:
- Occupied by persons who form more than one household and where those persons share one or more basic amenities such as toilet, bathroom and cooking facilities or lack one of these
- A converted building containing one or more units of accommodation that do not consist entirely of self-contained flats
- A converted building consisting of self-contained flats, where the conversion did not comply with the building regulations and more than one third of the flats are occupied under short tenancies
- Where five or more persons, who together do not form a single household, occupy the HMO, then it must be licenced with the local housingauthority
A household is formed by a single person; a family; a carer and a person receiving care; a foster parent and a foster child.
A family comprises:
- A couple, whether married or not
- Persons related to one another as (parent or grandparent)
- Child, grandchild or step-child
- A cousin
- A niece or nephew, or an uncle or aunt
Members of the family of one of the couple are treated as members of the family of the other. A relationship of half blood is treated as a relationship of full blood.
Failure to obtain an HMO Licence is a criminal offence and also means that you will not be able to serve a Section 21 Notice seeking possession throughout the time that the property is not licenced.
In the case reported by the BBC, the tenants made an application for a Rent Repayment Order, which resulted in the landlord having to repay his tenants 12 months rent to the tune of £15,000.
The cost of obtaining a HMO Licence from Norwich City Council is £140 per property per annum. You do the maths!