What is a house in multiple occupation (HMO)? A house in multiple occupation (HMO) is a property that is occupied by more than 3 people (who are un-related) or more than one household. The definition would also require these persons to be sharing some facilities, such as a bathroom or kitchen, or even a washing machine within the property.

There are typically 2 versions of a HMO. A “small HMO”. This is where you would have 3 students/professionals or un-related people meeting the definitions of “sharing facilities” above. In this instance you must follow the laws that apply to HMOs including the Housing Act 2004 and the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006, as well as the Fire Safety Order 2005. You may also require a licence a to operate under a relatively new scheme called the “additional licensing scheme”.

The second version of a HMO applies to five or more sharers. In England and Wales, a home is considered to be a large HMO if it has five or more tenants (unrelated) that also meet the “sharing” criteria above. In this instance again the law above applies, and the property would require a “mandatory” HMO licence to operate. If your property meets the threshold of 5 or more sharers you will be under the mandatory licensing scheme and you must obtain a licence (from your local council) to operate.

If your property has over 6 persons (based on the definition above) you will also be required to apply for a sue-generis application https://www.gov.uk/guidance/when-is-permission-required To be clear this is a planning application & not a HMO licence issue. In this instance you would require planning permission for the number of persons above 6 and then be required to apply for a HMO licence to operate.

Flats can also be deemed to be a HMO, under section 257 under the additional provisions of the Housing Act 2004. Under section 257 of the Housing Act 2004 in the UK, https://www.legislation.gov.uk/ukpga/2004/34/section/257 converted flats are considered houses in multiple occupation (HMOs) if they meet certain criteria.

Specifically, a converted flat is considered an HMO if it is occupied by more than one household and at least one of the following applies:

• The flat is converted into self-contained flats and does not meet the standards required for a self-contained flat under the 1991 Building Regulations.
• The flat is converted into self-contained flats and is not the only flat in the building.
• The flat is not a self-contained flat and is occupied by more than one household.

If you meet the stress test for a “small” HMO or “large” HMO you will be required to follow all the legislation that applies to the property.

You must ensure you obtain a licence to operate in this type of set up, or you will be prosecuted, fined, and banned from the operations of HMO’s in England & Wales. Your tenants can even respectively apply for the rent to be repaid back to them under the RRP (Rent Repayment Order), https://www.gov.uk/government/publications/rent-repayment-orders-under-the-housing-and-planning-act-2016 in which case you would be required to pay back the rent to the tenants for everyday the property operated without a licence. Unfortunately, this also can apply to historic tenants who can seek a RRP under the same conditions. In order to rent out an HMO, landlords must apply for a licence from
their local council.

The licence is valid for up to 5 years and can include additional conditions set by the council, such as improving the standard of facilities. Depending on the area, landlords may also need planning permission to convert their property into an HMO. All HMOs must adhere to the council’s HMO standards which cover things like minimum room sizes, amenity standards and fire safety requirements.