Guide to HMO (House in Multiple Occupation)

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What is an HMO?

An HMO, or House in Multiple Occupation, is a property occupied by three or more individuals forming two or more households, where they share one or more amenities such as a kitchen, bathroom, or living area. While HMOs can be a profitable investment, they come with specific legal responsibilities and regulations that landlords must follow.

 

Our Dedicated HMO Management Team

Managing an HMO property requires specialized expertise. At Sovereign Estates, we have a dedicated team of HMO property managers located at our Head Office, trained specifically to support landlords with HMO properties or portfolios. Our team ensures that your property complies with all council regulations and remains fully HMO compliant.

 

Compliance and Licensing Assistance

Navigating the complexities of HMO compliance can be daunting, but Sovereign Estates is here to assist. We help arrange and update all necessary compliance documents and manage the entire licensing application process. Whether you’re applying for a new license or need help with an ongoing application, we handle communication with the relevant council to ensure all requirements are met. We can also arrange council inspections, often required before a license is granted.

 

Penalties for Non-Compliance

Failing to obtain the correct HMO license can lead to severe penalties, including fines of up to £30,000.00. Additionally, tenants may have the right to apply for a rent repayment order, potentially requiring you to repay up to 12 months’ rent. Ensuring your property is properly licensed and compliant is essential to avoiding these risks.

 

HMO Licensing in London and the South East

Recent years have seen an increase in licensing schemes across London and the South East. Here are some examples of recent scheme introductions in various boroughs:

• Lambeth: Additional Scheme introduced in December 2021

• Southwark: Additional & Selective Schemes introduced in March 2022; Selective Scheme expanded on 1st November 2023

• Bexley: Selective Scheme introduced in 2018 (due to end in August 2023)

• Tower Hamlets: Additional Scheme introduced in April 2019 & Selective Scheme introduced in October 2021

• Lewisham: Additional Scheme introduced in April 2022

 

Which License Do You Need?

There are three main types of HMO licenses, depending on the specifics of your property:

1. Mandatory License: Required for properties with five or more tenants from more than one household.

2. Additional License: Required for properties with three or more tenants from two or more households.

3. Selective License: Required for properties within specific areas designated by the local council.

 

Common Documentation Required for HMO Licensing

Each council has its own regulations, but the following documents are commonly required to apply for an HMO license:

Selective License:

• Portable Appliance Test (PAT) – £150.00

• Floorplan – £90.00

• Electrical Installation Condition Report (EICR) – price dependent on property size

• Energy Performance Certificate (EPC) – £90.00

• Gas Safety Certificate – from £90.00

Additional License:
All of the above, plus:

• Fire Risk Assessment (FRA) – £280+VAT

• Grade D Alarm System

• Fire Doors

• Fire Blanket

• Fire Signage

• Notice Board

Mandatory License:
All of the above, plus:

• Communal Cleaning

• Bi-Weekly Alarm Testing

 

Other Information Required for License Application:

• Mortgage provider details (Ensure your mortgage provider is informed as soon as possible about your license application)

• Block management details (if applicable)

• Freeholder details (if applicable)

• Landlord’s date of birth

• Designated license holder (If you’re overseas, depending on the council, you may need to nominate someone in the UK to be responsible for the property and hold the license. Note that the license holder cannot be changed during the scheme.)

 

Our HMO Licensing Service Fees

As your agent, Sovereign Estates can handle the license application process on your behalf for an administration fee:

• Fully Managed: £300 Inc VAT

• Rent Collection: £370.00 Inc VAT

• Let Only: £400 Inc VAT

 

HMO Compliance Packages

To help ensure your property meets basic HMO compliance, we offer the following packages:

• £320 – Basic HMO Package: Includes installation of Fire Blanket, Notice Board, Fire Action Notice, No Smoking signage, Log Book for Alarm Testing

• £750 – Basic HMO Package with Compliance: Includes PAT, FRA, Fire Blanket, Notice Board, Fire Action Notice, No Smoking signage, Log Book for Alarm Testing