Since HMO licensing Regulations came into force in October 2018, councils have increasingly been cracking down on landlords without a licence.
Although whether or not a property requires an HMO is a slightly grey area (for properties of under five residents that contain more than one household* the licensing requirement depends on a council) the resulting penalties and fines are not.
Councils are not afraid to get punitive, it has been wrongly reported that the maximum fine for renting out an HMO without a licence is £20,000, but the reality is it’s unlimited. In the first half of 2019 Barnet council issued £49,900 in fines, while one rogue landlord in Birmingham was charged over £180,000 in fines for breaches relating to HMO licences. If you’re unsure if you need an HMO licence for your property, contact your council as soon as possible. Most councils are giving landlords 28 days to secure an HMO licence before they begin legal proceedings (though this does vary on a case by case basis).
HMO Rent Repayment
If you’ve been renting out your home without the relevant licence, your tenants are also eligible to claim for a rent repayment of up to 12 months, depending on the duration of their tenancy. A recent high profile case involved five students who took their landlord to court and won back £15,000 of their rent money, all down to an improperly licensed HMO.
The penalty for renting out a property without the right HMO licence is now classed as a criminal offence and could lead to a criminal conviction. As councils are toughening up in this area, it’s not inconceivable that repeat offenders could face jail time, while in extreme cases the council could revoke the landlord’s property licence and take control of the property themselves (via a management order).
HMO licensing is a complex subject and the penalties for getting it wrong (as evidenced above) are potentially severe.
Those seeking further information should visit our HMO Licensing Page.
Staying abreast of the ever-changing legislation, asking for guidance from your relevant council or seeking external advice from a company specialising in this area are the best ways to make sure you don’t fall foul of the penalties for non-compliance and pay a hefty price for doing so.
In these circumstances, a household is defined as a single person, married or cohabiting couple or members of the same family.
If you’ve found this guide to HMO licensing interesting or useful, check out THE ULTIMATE GUIDE TO HMO PROPERTY