HMO COMPLIANCE

There are 178 pieces of legislation linked to being a Landlord and HMOs are compliance heavy beasts, before you decide to invest in them, do your research well, educate yourself and understand your obligations. Let’s have a look at some of these pieces of legislation, as they relate to HMOs, now:

HMO COMPLIANCE CAN BE BROKEN DOWN INTO 3 MAIN AREAS:

Investor/Landlord Compliance – Being a compliant investor Property Compliance – Having a compliant property Tenant Compliance – Creating & Maintaining compliant tenancies

Let’s assume you are a compliant investor/landlord: that you have ICO registration; that any company you are using as your investment vehicle is correctly insured etc. etc. and concentrate on the property itself:

Property Compliance can be broken down into a few areas too, some are HMO specific and some are not:

Insurance & Safety – HHSRS & being correctly insured for an HMO Licensing –Mandatory & Additional Licenses Planning – Article 4 & Sui Generis LACORS – Fire Safety

INSURANCE & SAFETY:

Naturally, you will need to have your property insured, each property is going to be different, each area is going to be different and the best thing to do is work with a broker who you know and trust and be very open and honest about what you are looking to achieve (if you don’t know one, we know a great one!)

THE NEXT THING TO BE AWARE OF IS HHSRS.

HHSRS stands for Housing Health & Safety Rating System and it’s the way houses are assessed for being fit for human habitation (or not). The whole document is 72 pages long and while you don’t need to read it all, you do need to know the basics.

The list of what could be a hazard stretches from loose floorboards to asbestos, but the key thing is compounding the risks/hazards. For example, cupboards in hallways, junk mail and loose carpet on stairs on their own are small risks, but combined are a large risk!

Our advice is to imagine you are walking around the house after a few too many or if you were a toddler (can be the same for some!) how can you hurt yourself? What items when paired together pose a greater risk and how can you mitigate that?

LICENSES & LICENSING

Each council has their own set of licence criteria (I know…) and if you are lucky enough, like we are in Bristol, to have a city that spans two council areas, then you need to know both sets! Generally, they are similar but there are subtle differences.

Key things for licences are minimum room sizes, the number of bathrooms/ toilets, fire safety and amenities.

In the eyes of the council, there is no excuse for not licencing an HMO and the rent repayment orders can be very expensive, in Bristol in September 2021 the council fined a landlord £48,000… not only that but if you have your `fit and proper person` status revoked, all of your HMO licences will be taken away, which could be very destructive for your portfolio!

There are two types of HMO licence:

Mandatory Licences – these are applicable to every HMO with 5 or more people.

Additional Licences – these are applicable to HMOs with 3 or 4 people IF your council has an additional licensing scheme in place.

HMO PLANNING:

There are two key aspects to HMO planning

Sui Generis Planning (for large 7+ person HMOs) which is universal and applies everywhere and Article 4 Planning Directives (for converting a family house into a small HMO of 3-6 people) which are area specific.

Article 4 is the big one, it removes the permitted development right to convert a family house (class C3) into an HMO (class C4). Councils bring this in when they want to limit the number of HMOs in an area, you can find a map on the council website if your council has it in place. It is not impossible to get Article 4 planning, but it is quite difficult.

Sui Generis is when you are going for larger

HMOs and will always apply. If you want to have 7 or more people in a house, you will need to apply for it. Each council has specific things they look for: big storage, refuse storage, anti-social behaviour measures, parking etc. these can be found in the local plan and you are best to speak to a local planning agent about the likelihood of getting Sui Generis Planning.

LACORS (FIRE SAFETY)

LACORS is the fire safety guide for all rental properties but has a specific section on shared houses and HMOs. It outlines the fire doors you will need (FD20 or FD30) the fire system you will need (Grade A or Grade D), the coverage of that system (LD1, LD2, LD3 etc.) and other things such as fireproofing of understairs cupboards etc.

Sometimes, the council licensing regulations and LACORS won’t match, so you need to check both and where they don’t, choose the stricter option… if in doubt, always go above and beyond!

If you are unsure, you can pay an independent fire assessment company to come and look at your property, which for a new investor may be a good way of learning exactly what you need to do!

HMO Compliance is a huge topic and we have only covered the basics you need to be aware of to get started - each one could be a whole post in itself. When we do compliance audits for our landlords, we go through all of these items and more. It is important to educate yourself, because there are no grey areas when it comes to compliance!