nigel woollsey

Nigel Woollsey

Online Writer
Published: 23/10/2019

Uncertainty and misunderstandings over the complex laws surrounding houses in multiple occupation (HMO) laws are leaving many landlords open to the risk of hefty penalties, according to a report in the Times newspaper this week.

In London alone it is estimated that more than 100,000 homes do not have the correct HMO licence in place.

HMO licensing was first introduced in 2004 and from October 2018 a mandatory licence was required for any property that had been let to five or more people from more than one household. However, more recently, many councils have extended the requirements to ‘an additional HMO licence’ where a property has been let to three or more people from more than one household. Licenses cost between £600 to £1,250 for properties in London.

Richard Tacagni of London Property Licensing, who collated the figures for Safe Agent, a lettings accreditation scheme, commented that the HMO rules “have become so complicated that many people, unintentionally, have found themselves in breach and potentially face significant penalties”

The penalties for those breaching this legislation can be severe and include fines of up to £30,000, having to repay their tenants rent for up to 12 months and the chance of a criminal conviction.

David Smith, a housing lawyer and policy developer at the Residential Landlords Association (RLA), said: “A lot of people haven’t realised that rules have changed relatively recently. Local authorities haven’t done a lot to flag it. Some are accidental landlords who haven’t realised there is such a thing as an HMO.”

Help for landlords

Many of the people who become landlords do so with a single property, rather than a huge portfolio of homes. For first-time landlords, Moneyfacts.co.uk has several helpful guides that can guide you through the buy-to-let maze. For those interested in residential letting check out our Five steps to becoming a buy-to-let landlord guide, while our Landlords’ rights and considerations guide can be helpful to spot letting problems in advance.

Existing, new and prospective landlords should also take a look at our best buy-to-let mortgages comparison charts.

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