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Landlords warned over new rental rules

Landlords warned over new rental rules

Category: Mortgages

Updated: 26/10/2011
First Published: 26/10/2011

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Landlords who rent out homes to students or large groups of other people have been warned not to get caught out by new rules.

The Association of Residential Letting Agents (ARLA) has said that many local authorities have indicated their intention to change the rules surrounding homes inhabited by groups of unrelated people, known as Homes in Multiple Occupation (HMO).

Until last year, landlords only had to apply for an HMO licence if the property had six or more unrelated tenants with shared amenities such as a bathroom or kitchen over three levels.

However, the rules – know as Article 4 – now cover any home with three to six tenants who share common facilities.

Landlords who do not get permission to change their property to a HMO, but rent it out as such, risk being hit with hefty fines.

While the new rules are optional for authorities to implement, ARLA has said that it is more likely to be enforced in areas with a high density of smaller and larger HMO properties - for example in city centres or where there are student communities.

ARLA is advising landlords to check with their local authority or a licensed ARLA agent before altering a property to accommodate an increased number of tenants or purchasing such a property for investment.

"HMO licensing and planning applications are not a new issue for landlords, but now there is the added complication of Article 4," Ian Potter, Operations Manager at ARLA, said.

"There is no room for complacency - failure to comply could result in a hefty fine.

"It is therefore important for any landlord considering changing the use of a property to fully research the regulations in their area.

"For landlords with portfolios spanning more than one local authority area, this may mean different rules apply for each property. Factoring in the possible additional costs of purchasing the licence is also vital."

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