I have just completed converting a house into an HMO (House in Multiple Occupation)………
I have just completed converting a house into an HMO (House in Multiple Occupation. It’s in an area where an Article 4 is in place. As I have an HMO Licence, does this Article 4 affect me?
The term HMO means a house in multiple occupation. The government saw that renting a house for single people or student is not economical, so it decided to bring in a law on April 6 2010, that a house can be converted and used for more than one household, with up to six people of six different households. That made it economical for single people or students to live in the area of their choosing, together with their friends. This is called an HMO (or in planning terms, a C4). If more than six people are sharing a house, then the property will need a planning application. This type of property is classified as a Sui Generis in planning terms.
To be called a shared house, the tenants would need to share at least one amenity area, like a kitchen or a bathroom; no cooking facilities are allowed only in the communal kitchen. As the permitted development (PD) rights came into force, thousands of houses were converted into HMOs (there are 467,000 HMOs in the U.K.), as they have a significant return on investment. Some local authorities began seeing a decline in family dwelling, so they requested that the government remove these PD rights from their areas. This is called an Article 4 direction. For this to take place, the council has to prove that there are too many converted houses in the area, and that the need for single dwellings is far grater than HMOs. After a year’s notice, this gets approved, and PD rights for the change of use are removed (as in Haringey, Barnet, Havering and more). A full planning application can still be obtained for a change of use from a house to an HMO even in an area where there is an Article 4 direction; it just can’t be done under PD rights.
About HMO Licences
As the years have passed, the council has seen very sub-standard HMOs with health and safety issues and fire safety issues. They decided to implement an HMO Licence scheme, to make sure that the house is suitable and safe to be used as an HMO. There are three types of HMO Licence:
1. Mandatory Licencing – HMOs that are occupied by five or more people who make up at least two households require a mandatory licence. The only exception to this rule is an individual flat containing five or more tenants located inside a purpose-built flat of three or more self-contained flats (large flats inside large blocks, typically found in student housing).
2. Additional Licencing – Additional licencing of HMOs is at the discretion of the local council and varies on a case-by-case basis. It was put into place to help tenants of properties not covered by the mandatory licencing scheme (due to size), which may suffer from poor management. Boroughs such as Haringey, Barnet and Brent have extended their additional licencing to include all privately rented properties with three or more people making up two households – but each council is different (for example, in Hackney there is no such a scheme at the moment). There are a number of exemptions to this type of licence and no centralisation of policy across the country. To find out whether your HMO property requires this type of licence, check your council’s website or contact them directly.
3. Selective Licence – Again, this licence is at the discretion of the borough and can affect all rental properties, regardless of size and number of occupants. For example, a council that may be concerned about conditions for tenants can instigate compulsory licencing of all residential properties within a street, ward or whole borough. Typically, it’s brought in to try and smarten up areas or wards where there have been complaints about standards of accommodation. If you are unsure whether your property needs an HMO licence, you can contact us [SAM Planning] or your local council directly and obtain clarify cation, preferably in writing. While HMOs that require a mandatory licence are easily identify able, the licencing process for smaller properties is considerably less transparent. Landlords should also remember that they will need an HMO licence for every relevant property – it’s the residence rather than the landlord that the HMO relates to.
Please Note: If someone deliberately avoids licencing, the council will consider taking action using all the powers available. The person could face:
- Prosecution, which carries an unlimited fine
- Fine up to £30,000
- Management orders, where the council takes over the management of the HMO
- Rent repayment orders, requiring repayment of up to 12 months of rent collected
However, by not having planning the worst that can happen is an enforcement notice to revert the house back to the original state, before the breach took place, but there will be no fines or prosecution if there is compliance.
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