The introduction of Mandatory Licencing came in 2016 through the Housing Act 2004. It applies to large houses of multiple occupation. The definition of a mandatory licence or property changed on the 1st October 2018 under the Deregulation Bill. (Please see previous article) – https://harringtonslettings.co.uk/deregulation-strikes-again/
What is a House of Multiple Occupation?
The new definition now states it is as follows: –
1) Occupied by five or more persons.
2) Occupied by persons living in two or more separate households.
The standards to meet are:
a) standard test.
b) self-contained test. It doesn’t apply to purpose-built flats situated in a block comprising three or more self-contained flats OR
c) the converted buildings test.
The licence applies to all HMOs with five or more occupants, regardless of the numbers of storeys.
Properties currently licenced under a selective licence scheme will fall under the mandatory licencing scheme after October 2018.
The existing selective licence will be valid until its expiry. So, the property will be correctly licenced up until that point. At renewal the new mandatory licensing criteria will apply and the property will require a new licence.
Does each Council have their own selective licencing scheme?
The answer is unfortunately yes and no. Some local authorities have now introduced their own licencing scheme within certain areas. This is to raise the standard of properties in certain areas. Each council has its own requirements which can differ as, by definition, it is selective licencing. Please refer to the government website for more information regarding this – https://www.gov.uk/renting-out-a-property/houses-in-multiple-occupation-hmo
Do I need to check whether I need a licence?
Absolutely, yes, it is critical to check that a licence is required for your area. The best way to do this is to contact the local authority. Each individual authority as outlined above has their own requirements. Therefore, it is important to understand the requirements.
Will I need to carry out a gas safety, electricity report and PAT test?
Yes, virtually all licencing schemes require you to carry out a new electrical test to check all the electrics within the property. These must then take place every five years thereafter. A PAT test (see our PAT testing article) needs to take place either yearly or every two years depending on the frequency of use. A gas safety (see previous article) has to be done on a yearly basis.
Does the local authority charge a fee?
Yes, each individual local authority has their own scale of fees in respect of their licencing scheme. Also, how long the licence lasts for can differ between authorities. Some are three years’ and some are five years and they range from £400.00 upwards. You again need to speak to your local authority to find this out.
It has become much more difficult to obtain HMO licences with certain authorities. They not only require a licence but may also require planning and are very restricted in certain areas. When purchasing a property, we would suggest that you contact your local authority to ascertain whether it will require a licence. Also, how likely it is to be granted. Further revisions to these laws are expected in the new Housing bill due out at some point in 2019.