Increasingly, councils have been cracking down on landlords letting properties without the proper license since the new HMO licensing legislation came into effect in October 2018. Regardless of whether a property is required to have an HMO (for properties with more than one household*, licensing requirements vary by the council), the penalties and fines that follow are clear.
Councils aren’t afraid to get punitive if tenants rent out an HMO without a licence, but the maximum fine has been reported incorrectly as £20,000. For breaches relating to HMO licences, Barnet Council fined rogue landlords £180,000 in the first half of 2019, and Birmingham City Council fined rogue landlords £49,900. Contact your council as soon as possible if you are unsure whether an HMO licence is needed for your property. In most cases, a council will give landlords 28 days to apply for an HMO license before taking legal action.
Check out companies such as Kammadata to help see if you require a licence and what type of licence is required.
Rent repayment order
Rent repayments can also be claimed by tenants who have rented out your home without the necessary license, depending on their tenancy period. An improperly licensed HMO recently caused five students to lose £15,000 of their rent money in a high-profile case.
Here at Lofti tenants have access to all relevant documents for the property they’re renting which means as a landlord/agent you can upload the licence document onto the system, and this can be viewed by the tenant. Prevent any risk of a rent repayment order or any fines.
A criminal conviction could result from renting out a property without the correct HMO licence. In extreme cases, the council may be able to revoke the landlord’s property licence and take ownership themselves through a management order, as councils are toughening up in this area.
In the case of HMO licensing, getting it wrong (as shown above) can result in severe penalties.
You can check out the UK Government website for more HMO licencing information.
One should also note, if the property is not an HMO property, it may fall into the category of a selective licence. A selective licence covers any other property that is not classed as an HMO. Something to bear in mind is selective licence will depend on the borough. Some roads could fall into selective licencing whereas some will not.
Selective licencing is very simple to apply for… and normally takes around 20 minutes. It would involve going onto the government website and filling in all the correct details to do with the property. Pricing is lower than HMO licence as it does not involve a surveyor going out to the property.
You can find selective licence details on the government website.
There is also Article 4 (1) means that permitted development rights will no longer apply to small HMO development (Class C4 (houses in multiple occupations)) of the Town and Country Planning (Use Classes) Order 1987 (as amended)) in the borough.