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Landlord’s Initial Obligations when renting HMO’s

March 30, 2023

A house in multiple occupation (HMO) is a property that is rented by at least 3 people who are not from the same household. They must share facilities such as the bathroom and/or the kitchen. There are both standard and large HMOs. Large HMOs consist of 5 or more tenants who form more than 1 household, who similarly to a standard HMO, share common facilities. Understanding the difference is important as this often determines which obligations the Landlord must follow.

First steps for Landlords to take:

  1. Landlord Licence

Just because your property is defined as a HMO, this does not necessarily mean it will need to be licensed. The best way to determine if this is necessary is to contact your local council. However, if you are renting a larger HMO (as defined above), it is always necessary to gain a license.

  • Register with the Information Commissioner’s Office

You will need to register with the ICO if you plan to store any information about your tenants on an electronic device.

  • Consent to let the property

You will need to check whether any consents are necessary to let the property. A consent may be necessary because of a superior landlord, lender, or insurer for example. You will also need to confirm there are no covenants in the register which restrict this type of tenancy. Instructing a solicitor to review this for you can be helpful.

  • Right to rent check

This checks the immigration status of a potential tenant and is an important step to confirm the eligibility of your proposed tenant.

  • Change of Use

If it is your first time renting the property as a HMO, you may need to apply to the local council to change the ‘use’ class. Some local authorities require this, specifically if it was originally a single household property. Again, contacting the council is the best way to determine if this is necessary.

  • HMO Insurance

This is specialist insurance and the terms differ slightly to a standard landlord insurance policy.

  • Fire Safety

You must ensure you follow safety regulations for your property. It is a Landlord’s responsibility to fit and test smoke alarms and carbon monoxide alarms. There are grey areas in the law covering fire safety for a small HMO (also called a ‘shared house’ and a larger HMO). Conducting a Fire Risk Assessment is mandatory for a larger HMO as per the Regulatory Reform (Fire Safety) Order 2005 and Housing Health and Safety Rating System. It is advisable one if also carried out for a smaller HMO.

Further guidance can be found here:-

https://www.cieh.org/media/1244/guidance-on-fire-safety-provisions-for-certain-types-of-existing-housing.pdf

Please note HMO Landlords must also comply with the Management of Houses in Multiple Occupation (England) Regulations 2006.

Documents Landlords should provide to tenants:

  1. Energy Performance Certificate

An EPC must be provided to all incoming tenants. This must have a minimum rating of E to be rented. However, there are proposals to raise the minimum rating for new tenancies to C by 2025.

  • Tenancy Agreement

This agreement should detail the parties rights and duties during the tenancy and provide clarity for both Landlord and Tenant.

  • Gas Safety Certificate

This should be provided the day the tenant moves in and information displayed in the communal areas of the property. There should be yearly safety checks.

  • Electrical Installation Condition Report

This should be provided to the tenant and if the property is in England, the report should be renewed every 5 years.

  • A copy of ‘How to Rent’

The Landlord should provide this government guide which details tenants rights and responsibilities when renting.

  • Deposit Detail

The Landlord should provide details of the tenancy deposit scheme they have chosen within 30 days of receiving the deposit.

  • A guide on how to use any fire safety equipment in the property

Following on from the Fire Risk Assessment, all HMO Landlords should instruct their tenants on how to use the fire safety equipment in the property such as fire blankets. They should also be informed of any fire safety measures such as fire exits, to reduce risk.

  • Legionella risk assessment

The Landlord is responsible for carrying this out. The necessity of this will be based upon the history of the building and how recently the water has been in use.    Please be advised that whilst this information covers the key obligations and documents necessary for a Landlord to provide to prospective tenants, it is not an exhaustive list. Checking with your local council and instructing solicitors is the most effective way to ensure you are protected and follow all necessary obligations.

Charlotte Peplow
Paralegal – Commercial Department

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.