September marks the start of the university for the 2022/23 year and with that comes students moving into rented accommodation. If you rent out your property to multiple individuals (be that students or other tenants), you need to be aware of the rules surrounding Houses in Multiple Occupation (‘HMOs’). HMOs are often also called ‘house shares’ or ‘flat shares’. Read and follow this checklist to make sure you know how to rent out an HMO.
Step 1: Find out if your property would be an HMO
A property is classified as an HMO if it is rented by at least 3 tenants who form more than 1 household and the tenants share a kitchen, bathroom or toilet. The Housing Act 2004 defines a household as members of the same family living together. This includes:
- couples who are married or living together as spouses
- relatives (including children, parents, grandparents, grandchildren, siblings, uncles, aunts, nephews, nieces or cousins) living together (half-relatives, step-children and foster children are also treated as living in the same household)
- domestic staff that live rent-free in the accommodation provided by the person for whom they are working (like live-in nannies or au-pairs)
This means that if you’re renting to 3 university students, they would form 3 separate households. Similarly, if you rent to a couple and another unconnected person, they could form 2 households. In both cases, the property would be classified as an HMO.
Step 2: Determine if your HMO would be a large HMO
A large HMO is an HMO (as defined above) that is rented to at least 5 tenants who form more than 1 household. For example, if you rent out a property to 5 separate students, they will form 5 separate households. If you rent your property to 2 couples and 1 unconnected person, they will form 3 separate households. In both cases, the property would be classified as a large HMO.
If you rent out a large HMO you will need to get an HMO licence.
Step 3: Licence your HMO
Whether you need to licence your HMO depends on where the property is located.
In England and Wales, you generally, only need to licence your HMO if it is a large HMO. Apply at your local authority to get a licence for your large HMO.
However, whenever you rent out an HMO you should first contact your local authority to see whether you need a licence. Under a Selective Licensing Scheme councils can require HMOs to be licensed even if they aren’t large HMOs.
In Scotland, all HMOs must have a licence. Apply for an HMO licence with your local authority.
Step 4: Consider room size restrictions
The Licensing of Houses in Multiple Occupation Regulations 2018 sets out the minimum bedroom size requirements for HMOs in England. As a general rule, if a room in an HMO is used as sleeping accommodation by:
- someone over the age of 10, it must be at least 6.51m2
- 2 people over the age of 10, it must be at least 10.22m2
- 2 people under the age of 10, it must be at least 4.64m2
In Wales, the Welsh Housing Quality Standard bases the suitability of a property for multiple tenants on the property’s room sizes. For example, a property is considered suitable for 4 people if it has:
- 1 double bedroom with more than 10m2 of floor area
- 2 single bedrooms with a minimum floor area of between 6 and 10m2 of floor area, and
- a combined diner and lounge area of at least 19m2
In Scotland, every bedroom should be large enough to (as a minimum) accommodate a bed, wardrobe and chest of drawers.
Note that different councils may have different (ie larger) minimum room size requirements.
Step 5: Comply with your obligations as an HMO landlord
While all landlords are subject to certain legal responsibilities, HMOs come with additional responsibilities. These include:
- carrying out gas safety checks yearly and electricity checks every 5 years, in England, or 3 years, in Scotland (electricity checks are expected to come into force for Wales in December 2022 under the Renting Homes (Wales) Act 2016)
- putting in place proper fire safety measures (including smoke alarms and, in Scotland only, fire extinguishers, fire blankets and fire escape routes)
- carrying out repairs:
- to the communal areas of the property (eg sinks and toilets)
- to the structure of the property (eg walls, windows and gutters)
- related to the supply of water, gas and electricity (eg broken boilers or heaters)
- ensuring that the property isn’t overcrowded (read the respective Shelter guidances for England, Wales and Scotland to find out more about how overcrowding is determined)
Step 6: Enter into contracts with your tenants
Finalise your relationship with your tenants by entering into a Tenancy agreement. You should also consider making an Inventory (with or without photos), to record the state of the property (including any furniture) before the tenants move in.