Before you can start letting, you may need to apply for a licence if the property is classed as an HMO.

The definition of an HMO, and whether you need a licence, will depend on where the property is located.

England & Wales

Licensing for certain HMOs is compulsory across England under the Housing Act 2004 Parts 2 and 3.

Is the property an HMO?

A property is generally classed as an HMO if:

• It has one or more units of accommodation
• It is rented by at least 3 people who form more than 1 household
• They share one or more of the basic facilities (i.e. toilet, bathroom or kitchen)
• Rent is paid by at least one of the occupiers
• It is not used for a purpose other than living accommodation

A household could be an individual or a family. A family is two or more related individuals and includes spouses or a couple who live together as married or in a civil partnership and relatives such as a parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, niece or cousin.

There are other tests of whether a property is an HMO and you should check with the local council where the property is situated.

Exceptions

Certain types of property aren't classed as HMOs and, therefore, don't need a licence:

• Properties occupied by only 2 people who form 2 households, e.g. a flat share
• Properties managed or owned by a public body or a registered social housing landlord
• Residential accommodation, which is secondary to the main use of the building, for example, religious establishments or conference centres
• Student halls of residence, where the universities are specified as exempt by order
• Buildings regulated by other Acts of Parliament, for example, care homes, bail hostels

Must the HMO be licensed?

HMOs occupied by 5 or more individuals who do not form a single household must be licensed by the local authority ('mandatory licensing'). This is because of the increased fire risk in such properties.

Other HMOs may need to be licensed under an 'additional licensing' scheme. If you're not sure whether your property may need licensing, or for more information, get in touch with your local authority.

Temporary exemption from licensing

An owner or manager of an HMO may apply to the local authority for a Temporary Exemption Notice (TEN). If the application is accepted, the property will be exempt from licensing (and the property manager/owner won't be committing a criminal offence of operating an HMO without a licence).

A local authority may only grant a TEN if it's satisfied that the applicant is (or soon will be) taking steps so that the HMO ceases to be subject to licensing. For example, if planning permission has been obtained for the conversion of the property into a 'single family' residence.

A TEN can be granted for a maximum of 3 months; on expiry and in exceptional circumstances, the local authority may issue a further TEN for a further 3 months. No more than 2 consecutive TENs may be granted in succession for a given property; in other words, the maximum exemption period is 6 months. If a local authority refuses to grant a TEN, the applicant may appeal to the Residential Property Tribunal (which can confirm or reverse the local authority's decision).

Penalties for non-registration

If you don't apply for a licence where one is required, you'll be committing a criminal offence, and the fine can be unlimited. In certain cases, rent paid by tenants (or from housing benefit) can be reclaimed if a landlord is found to be operating an HMO without a licence. It can also result in the landlord being unable to recover possession of the property.

Scotland

A property is classed as an HMO if it's the only or principal residence of 3 or more qualifying people from 3 or more 'families'.

Is the property an HMO?

A property is generally classed as an HMO if:

• It provides residential accommodation, which includes houses, flats, student halls, hostels and accommodation for staff in hospitals and hotels
• It is occupied as a principal residence. This is not just the number of days spent at the accommodation and includes the 'quality' of the accommodation to the user
• It is let to 3 or more qualifying persons, which is anyone other than the legal owners of the property and any family members that live with them
• It is occupied by 3 or more families who share one or more of the basic facilities (i.e. toilet, bathroom or kitchen)

Two people are members of the same family if they are:

• Married (including civil partnerships and same sex marriages)
• A couple who live together as if they are married
• An individual who lives with a relative such as a parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, or niece. This also includes relationships by marriage or by half-blood, and children who are fostered, adopted or otherwise brought up as a member of the family.

For example, if you let your property to 3 unrelated tenants who share some basic facilities, and you don't live in the same property with them, you will need an HMO licence.

Exceptions

Certain types of property aren't classed as HMOs and, therefore, don't need a licence:

• Properties where all the occupants (or at least one member of each 'family') are owners
• Properties owned by communal groups, established as a co-operative housing association, managed by general meeting
• Properties occupied by members of a religious order
• Crown property
• Accommodation provided as part of a service registered with the Care Commission as:
• A care home service
• An independent healthcare service
• A school care accommodation service
• A secure accommodation service

If you're not sure whether your property may need licensing, or for more information, get in touch with your local authority.

If you don't apply for a licence you'll be committing a criminal offence and can be fined.

Northern Ireland

A property is classed as an HMO if it's occupied by more than 2 people who aren't members of the same 'family'. A 'family' means persons who are married, living together as husband and wife and a parent, grandparent, child, grandchild, brother or sister.

There is a compulsory registration scheme for HMOs, covering the whole of Northern Ireland. You can register the property via Belfast City Council, who manage the scheme on behalf of all local councils.

You'll be committing a criminal offence if you don't register (or don't comply with the procedure, i.e. provide information for registration); it's punishable by a fine.

Exceptions

Certain types of property aren't classed as HMOs and, therefore, don't need to be registered:

• Residential homes, within the meaning of the Registered Homes (NI) Order 1992
• Children's homes or community homes within the meaning of the Children (NI) Order 1995
• Boarding schools
• Bedsits
• Hostels, bed and breakfasts, guest house or hotels
• Any building or part of a building that's occupied principally for the purposes of a religious community whose principal occupation is prayer, contemplation, education or the relief of suffering
• Properties owned by the Housing Executive
• Any HMO occupied by people who comprise no more than 2 'families'
• Any HMO occupied by no more than 2 people in addition to the owner (or owners) and members of the 'family' (or 'families') of owner(s)

If you're not sure whether a property should be registered under the scheme, or for more information, get in touch with your local Housing Executive office.