Do I Need an HMO Licence for 3 Tenants in My Property?

Landlords Tenants

Posted in Oct 03 , 2024

It can be challenging to read and understand the UK property regulations and their complexities by yourself. The HMO regulations can become even more challenging for landlords because of their nature of work and busy schedules. As a landlord, one of the most common questions you may encounter is, "Do I need an HMO licence for 3 tenants?" The answer depends on various factors, such as the property size, the number of tenants, and how your local council interprets HMO regulations. In this blog, we will discuss all of these factors that lead to a solution for landlords regarding HMO licencing.

What is an HMO?

Let’s start with the basics. A House in Multiple Occupation (HMO) is a property rented out by at least three people who aren’t from the same household (i.e., they’re not family) but share spaces like the kitchen or bathroom. HMOs are particularly common in areas like London, Wimbledon, South Wimbledon, Colliers Wood, Morden, and Mitcham, where tenant demand is high. For landlords, HMOs are a great way to maximise rental income, while tenants appreciate the more affordable housing options they provide.

However, because multiple tenants share facilities, HMOs come with extra rules to ensure the property is safe and well-managed. These rules often include needing an HMO licence, but that’s not always the case.

Do I Need an HMO Licence for 3 Tenants?

Whether you need an HMO licence for three tenants depends on a few things. According to UK government guidelines, a property usually requires a mandatory HMO licence if:

You’re renting to five or more tenants, forming more than one household.
The tenants share facilities like a kitchen or bathroom.
At least one tenant is paying rent (or their employer is).

Based on this definition, a property with three tenants doesn’t automatically need a mandatory HMO licence. Local councils often have rules, and some may require "Additional Licensing" even with fewer tenants.

Local Council Licensing Schemes

Even properties with less than five tenants might still need a licence in some areas. This is where local councils come into play with their "Additional Licensing" schemes. For instance:

In Birmingham, landlords might need a licence for properties with three or more unrelated tenants.
Certain boroughs, such as Wimbledon, South Wimbledon, Colliers Wood, Morden, and Mitcham, have similar requirements for smaller HMOs.

It’s always a good idea to check with your local council to see if your area has any extra rules that can make renting a property more complicated.

Safety and Management Standards for HMOs

Even if you don’t need a mandatory HMO licence for a property with three tenants, you’re still responsible for meeting certain safety and management standards. These include:

Make sure you have working smoke alarms and fire extinguishers.
Regularly checking your gas safety and keeping up with certification.
Ensuring that all electrical wiring and appliances are in good condition.
Keeping shared areas, like the kitchen and bathroom, clean and well-maintained.

Skipping these safety checks can land you in hot water, even if your property doesn’t need a formal licence.

Why Are HMO Licences Important?

HMO licences aren’t just another layer of bureaucracy—they exist to make sure shared homes are safe, well-maintained, and suitable for multiple tenants. When you apply for an HMO licence, your local council will inspect the property to ensure it:

It is suitable for the number of people living there.
Meets fire safety standards.
It has enough space for tenants to live comfortably.
The landlord manages it responsibly.

Skipping out on getting an HMO licence when can lead to serious trouble for you as a landloard. The penalties for not having one include:

Fines of up to £30,000 per offence.
Having to repay tenants for up to 12 months of rent.
Potential criminal prosecution, which could mean unlimited fines.

To avoid these costly mistakes, ensure you’re up to date with your local council’s licensing requirements.

How Cribs Estate Can Help

We get it—HMO licensing regulations can feel like a headache. But that’s where Cribs Estate comes in. With years of experience in the UK property market, we can help take the stress out of managing your rental property. Whether it’s figuring out if you need a licence, helping you through the application process, or making sure your property meets all the necessary safety standards, we’ve got your back.

Cribs Estate offers:

Comprehensive property management: We handle everything from regular safety checks to tenant management, ensuring your property is in top shape.
Tenant sourcing and vetting: We find the right tenants and meet all legal requirements.
Legal compliance: We keep you informed about any changes in property legislation, including HMO regulations, so you’re never caught off guard.

With Cribs Estate, you can focus on growing your property portfolio while we handle all the tasks that need to be done. We have the knowledge and experience to help you crack the often confusing world of HMO licensing, making property management a breeze.

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