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Without doubt people are drawn to HMO investments or Rent to Rent HMO's purely down to a higher return on investment and more net cashflow. The problem comes when people run into this property niche without considering the legal obligations.
Luckily for you, I have decided to detail this in a blog but here comes a disclaimer: Any information contained in this blog is not to be taken or considered as legal or professional advice. I strongly advise you check for any new updates on the .gov website or speak with your local HMO Enforcement Officer.
Now that's out the way, let's begin with...
HMO Licensing
If you want to let a property as a HMO these are the government guidelines for needing your HMO licensed:
it is rented to 5 or more people who form more than 1 household
some or all tenants share toilet, bathroom or kitchen facilities
at least 1 tenant pays rent (or their employer pays it for them)
However, your local authority may deem you still need a license (even if you have fewer people living in the property). Check with your local authority... is my advice, just to be sure!
To obtain a HMO license your HMO property must meet certain guidelines. Contrary to some property trainers, its not just a case of throwing in the obligatory fire doors here and there... If only it was that easy!
But don't worry... I will cover in this blog series - most of the common HMO guidelines for you. (Bookmark this website now, to avoid missing out!)
On average HMO licenses will cost around £100 to £200 per year and they last 5 years once granted. One licence equals one property, you cannot have multiple HMO's with just one licence! (Yes some people, think it's like a driving licence, sadly it's not!)
How Big Is Your Bedroom?
I'm afraid size does matter, in fact it matters a lot, when it comes to HMO properties. The government decided to implement minimum room size guidelines back in 2018.
A.) to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square metres;
B.) to ensure that the floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years is not less than 10.22 square metres;
C.) to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years is not less than 4.64 square metres;
D.) to ensure that any room in the HMO with a floor area of less than 4.64 square metres is not used as sleeping accommodation.
It is not as simple as looking at a floorplan and thinking oh we have four bedrooms in this property, you will have to check the room measurements to ensure they comply.
Gas Safety in HMO's
All landlords including rent to rent operators have a statutory duty to ensure that all gas appliances, pipe and flues are maintained and in a safe condition.
This is done by way of arranging a Gas Safe Engineer to visit the property and carry out a safety check. The engineer then provides you with a certificate (Gas Safety Certificate CP12). This is valid for 12 months and each new check should be arranged prior to the existing certificate running out. Tenants are provided with a copy and you must keep one on file as proof.
Costs are anything from £40 to £60 dependent on location and who you use, but it has to be a 'Gas Safe' registered engineer.
Fire Safety in HMO's
HMO's are regarded as being more high risk with unrelated tenants living in one household. It does make perfect common sense and so as a landlord or rent to rent operator it is your common law duty to ensure that your HMO property meets the guidelines and is safe.
Each local authority has a 'HMO Enforcement Officer' as regulations and legislations can change depending on area you should speak with them about the required standards you need to meet in your area.
Typical requirements may include but not be restricted to:
Fire Doors
Fire Extinguishers and Fire Blankets
Thumb Turn Locks on certain doors
Fire Alarms and C02 Detectors
It is crucial that you check with your local HMO Enforcement Officer what your liabilities are. This cannot be stressed enough.
HMO Legislation and Compliance Blog Series...
We will release further blogs on this topic so you can use them as a resource.
Summary:
It goes without saying that if you are a landlord of a HMO or your considering HMO's as your investment strategy then you need to be aware of all the health and safety regulations. By ignoring these you could find yourself falling foul of the law and in the worst case scenario being held responsible for causing injury or death to your tenants.
If you are a rent to rent operator it is your responsibility to ensure legislations and compliance in the property has been carried out and most importantly is routinely maintained within the guidelines.