Once again, 2018 is another year of legislative changes in the private rental sector, and for this blog we are giving you the latest details on HMO reform.
The criteria for Houses in Multiple Occupation (HMOs) are under legislative reform. Announced on the 28th December 2017, the legislation changes the specifications of houses that need to hold a license. Currently HMOs require a license if they house five or more occupants making up more than one household, and are only applied to properties of three or more storeys.
Why is the legislation happening?
After many high profile cases of landlords being charged vast amounts of money over the quality of the living arrangements that they provide for tenants, it is no surprise that the government are looking to change things up. The changes will give councils more power and opportunity to crack down on overcrowding and other wrongdoings associated with badly ran HMOs. It is estimated that the new legislation will require an extra 174,000 homes across the UK to be licensed, on top of the 60,000 that currently fall within the remit.
What are the changes?
The criteria for which properties fall under the need for licensing is also changing. All properties housing five or more occupants from more than one family will be required to get a license, no matter how many storeys the building is. As well as this, for those luckily enough to own property above a pub, they also now fall within the new remit of houses above commercial buildings.
The minimum bedroom size is getting bigger. In an effort to crack down on overcrowding in houses new measurements for room sizes are coming in. This will mean only rooms larger than 6.51 square meters are suitable for one person, and 10.22 square meters for two people. Also children will now count as adults.
Provide adequate rubbish disposal. The buildup of waste has long been an issue for HMO’s, and they are the first to be blamed by local residents if the area becomes messy. With this in mind, the new laws state that a landlord must provide adequate space for rubbish disposal for the tenants of their property. This space must exist on the property and not on the pavement in front of it.
Fit and proper persons test. An application for a license may be rejected by the council if the landlord in question has any previous criminal records involving fraud, drugs, or sexual abuse.
What are the costs associated with the new legislation?
Application for license
The cost of the license will vary from council to council, but averages at around £500. This cost is for each property that fits the description, and will allow you to have that property licensed for 5 years.
Fines for non-compliance
It is likely that once announced there will be a 6 month period for landlords to get their properties up to standard. However, if once this time is up a landlord hasn’t made the suitable changes to their properties they face unlimited fines, as well as civil penalties of up to £30,000!!!!. You heard correct, £30,000! If you think they are joking, I refer you back to this guy.
Can I appeal the legislation?
According to some reports there will be opportunities to appeal the legislation on an individual property basis. Incidences such as when a property has rooms on the border line of acceptable size and the resizing of the rooms would cause a lot of stress for current tenants could be open for appeal, however there is no assurances that an appeal will be successful.
When will the legislation be coming into effect?
In a classic move, the government's dates have alluded not just us, but also themselves. In an extremely unsurprising twist to the legislation, no one has an exact date for when the legislation will come into play.
It was recently announced by Housing Minister Dominic Raab, that he expected it wouldn’t be until October for legislation to be passed and to be put into play. If anyone should know the date, it should be the Housing Minister. Having said this, does anyone actually know?
Things to take away
- If your portfolio has properties in different council duristrictions be sure to check the costs with each council, as they may vary from council to council
- The government are aware that for some properties it may be difficult to make the changes, for example changing room sizes on a listed building. For these cases be sure to report to the council and proceed from there.
- Finally, keep a lookout on our blog as we will keep you updated on any new announcements and dates as they come out!