From October 2018, the HMO licensing parameters were changed. Since the Housing Act 2004 was established it has been a requirement that large HMOs are licensed under mandatory licensing. A large HMO definition is:
Comprise 3 or more storeys;
Are occupied by 5 or more people living in two or more single households; and
The occupiers share basic amenities such as washing and cooking facilities.
But the law has been altered so that a HMO with 5 or more occupiers living in 2 or more households regardless of the number of storeys needs to be licensed (the storey requirement has been removed). So in October 2018 it is a legal requirement for properties that fit into the above definition to be licensed. The process and fee will differ between councils so please check with your local authority.
The licenses have been established to ensure the council are aware of all operating HMO’s and to eradicate unfit landlords who put tenants safety at risk. The main issue is the staffing levels at the council and would those rogue landlords admit to running a HMO as they know they would not be granted the license or do they operate undetected whilst responsible landlords pay the large fees?
The licence is valid for a maximum of 5 years and the license is held by the owner. Therefore if the property was sold and the new owner wanted to keep the property as a HMO they would have to reapply for the license. You will also need a separate licence for each HMO you run, so make sure you budget accordingly as the license fee where TMG operate is over £1000!
Such conditions that you must satisfy to get the license is:
the house is suitable for the number of occupants (this depends on its size and facilities)
the manager of the house – you or an agent – is considered to be ‘fit and proper’, for example they have no criminal record or breach of landlord laws or code of practice
You must also:
send the council an updated gas safety certificate every year
install and maintain smoke alarms
provide safety certificates for all electrical appliances when requested
It is a legal requirement so if the landlord does not keep to the conditions you can face an unlimited fine for renting out an unlicensed HMO.
Zero deposit Vs Government approved schemes Vs Reposit
There are other avenues that tenants can use to secure a property and they do not have to be the usual government approved schemes. A caveat to this is to please check with your rent guarantee provider.
To start, a government approved scheme is referred to as a government-backed tenancy deposit scheme (TDP) and a landlord must place your rent into a TDP if you have an assured shorthold tenancy. A landlord must place the rent into a TDP 30 days after receiving it. If they do not the landlord can be prosecuted. The TDP is protected for both the landlord and tenant and if you do not damage the property and pay your rent on time and in full, you will get the deposit back at the end of the tenancy. The negative of this scheme is you need to pay 1 months rent to the landlord plus 4-5 weeks worth of rent to the deposit scheme, which can be tough especially if your previous deposit has yet to be released.
A scheme I have had to use to claim against rent arrears and damage is Reposit. This is an insurance policy with the landlord being the beneficiary. This means the landlord can claim up to 8 week’s worth of rent and landlords get free independent arbiter. The tenant has to place into the policy only one weeks worth of rent so this can make your properties more attractive to tenants and help you stand out from the crowd. The tenant and landlord must still keep to the T&Cs of the AST so both parties remain protected.
The final option is Zero Deposit. This policy offers something very different from traditional deposits as again it only asks for one weeks deposit and is FCA regulated, plus accepted by 79% of estate agents. As with the above scheme you do not have to wait until you have the previous deposit released before you secure your next rented home. A huge benefit for landlords is claims are reviewed by TDS and receive fair payouts within two working days and you have up to 6 weeks rental protection. As with the above it makes your properties let faster and avoid void periods.
As I mentioned at the start please do check with your rent insurance provider and ensure you still comply with the T&C’s such as giving tenants a how to rent guide, valid EPC and valid gas certificate on the signing of an AST.
If you have a property in an Article 4 area it means that you have to gain planning permission from the local council. You need to gain permission for small changes as well as major changes which can make some properties unattractive.
TMG operates within the Medway Council and they ask for an application for planning permission if changes include:
replacing windows and doors
altering roofs (including roof coverings and chimneys)
building a porch
adding or removing cladding (such as timber or stone) from the walls of houses
laying or replacing driveways or paths
installing satellite dishes
erecting, altering or removing boundary gates, fences, or walls
painting, rendering or pebble dashing the walls of a building (excluding the painting of joinery)
Building Control operate to ensure that construction is done in a safe manner. You must check with local building control to find out if your plans require consent. You can opt for a local private building control company and you can use this portal to find your local agent https://www.planningportal.co.uk/findyourlabc or you can contact your local council building control department. It is personal choice to which one you prefer to deal with.
Remember that building control look after the construction safety and the council planning department will be contacted if you need planning permission for the construction. You do not always need both as only building control involvement is needed if the construction is within permitted development. For more information on this please see https://www.planningportal.co.uk/info/200187/your_responsibilities/37/planning_permission/2
Some examples of work that may need building regulations approval is: