The 2 types of HMO:
1. A licensed HMO –This is where 5 or more (unrelated people), share amenities in one property. A licensed HMO needs to be registered with the council, and you will need to pay a licensing fee.
2. An Unlicensed HMO – This is where 3 and/or 4 (unrelated people), share amenities in one property. You will not have to pay a licensing fee. So for example, if you own or a manage a normal terraced house let out to 3 or 4 unrelated students/professionals who share a kitchen it is a HMO, irrespective of the number of floors in the building and irrespective if they are on a single or joint tenancy agreement.
What does this mean for landlords & managing agents?
As an unlicensed HMO of this type you may not require a licence but you must adhere to the same safety standards and fire safety management requirements as licensable HMO. Management standards for HMO’s include; The Management of Houses in Multiple Occupation (England) Regulations 2006/2007 The National Fire Safety Guidance LACORS fire safety standards determines the required fire fighting and detection equipment The Regulatory Reform (Fire safety) Order 2005 requires all 'responsible' persons, i.e. landlords and managers, to undertake a fire risk assessment of HMO's To adhere to local Coventry City Councils HMO regulations Under the Management of Houses in Multiple Occupation (England) Regulations 2006 and 2007 act, you must take reasonable steps to ensure your tenants are not injured because of the property's structure or condition. A 'reasonable step' may be to contact a professional to conduct a health and safety inspection of the property, perform any work that is suggested, and keep a record of all of this. Under the Regulatory Reform (Fire Safety) Order 2005 you or a managing agent must carry out a fire risk assessment and take action to minimise the risk of fire. This needs to be performed professionally. It's worth noting that in some cases where a fire has harmed or killed an HMO occupant and the landlord has not been able to produce a risk assessment, the landlord/managing agent has been convicted and imprisoned.
Legislation & Obligation Legislation places a legal obligation to ensure fire safety of HMO's is carried out by a ‘responsible person’ In terms of the law, the ‘Responsible Person’ refers to the person who has control of the premises in connection with “carrying of the business”, meaning, in the case of absentee landlords it may well be the managing agent. The person carrying out an assessment must be competent to do so - a competent person is to be regarded as a someone with sufficient training, experience and knowledge of fire safety.
Failure to comply:
If you fail to comply with the HMO management rules & regulations Failure to comply with the HMO management regulations can result in enforcement action being taken out against managing agents and landlords. This has been enforced in recent court cases, which can be found in more detail on SAFE HMO'S website. If you do not meet this legislation, you may incur: Unlimited fines through the courts, prosecution and even being imprisoned In such cases, you will not be a ‘fit and proper’ person and therefore will no longer be able to manage your HMO property Your insurance can become null and void and therefore not pay out on damages or any claims Under the ‘relevant persons’ section your mortgage lenders may be contacted and your mortgage can be revoked