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How Do I Get A HMO Licence?

 

HMO Properties Houses in Multiple Occupation (HMOs) have received a lot of press attention recently, both good and bad. As a result, people are now either wishing to jump onto the HMO bandwagon, or want nothing to do with them.

If you have any interest in property investment whatsoever, you must familiarise yourself with HMO regulations.

Landlords already running HMOs in England had until 3rd July 2006 to present their applications to their local councils. Any landlord who owns a property that has been let out to sharers may thus be breaking the law if he has not already registered that property.

From 6th April 2006, the Housing Act 2004, has meant that there is a new definition of a House in Multiple Occupation (HMO). Anyone considering a career in property investment in the UK should familiarise themselves with the Housing Act 2004. You can easily download this from the internet.

HMO legislation has been introduced for several reasons:

• To improve the condition of rented housing stock.

• To reduce the number of unscrupulous landlords letting substandard and potentially dangerous property.

• To improve management standards of rented property.

• (Indirectly) To increase revenue for local councils through what is effectively a landlord’s tax.

• (Indirectly) To compile a register of rented property stock.

It is hoped that HMO legislation will result in a much better deal for tenants by removing rogue landlords from the system. However, as with most things, the better landlords will now have to go through additional red tape to provide a similar service to what they have already been providing.

To get a HMO licence you will need to submit a completed application form obtainable from your local council. As part of your application, you will need to include floor plans providing room sizes and an indication of current fire precautions in your property. You will be required to prove the safety of any fire detection system by providing a certificate issued by a suitably qualified engineer.

You will also need to submit a current Gas Safety Certificate. You can obtain this from any Gas Safe (formerly CORGI) registered engineer. An electrical safety inspection will also need to be conducted by a qualified electrician and an electrical safety certificate issued.

If you are providing any electrical appliances, you will need to have a PAT (Portable Appliance Testing) certificate issued by an electrician. This will cover items such as electric kettles and toasters etc.

You will also need to prove that you have suitable management arrangements in place. For example, deposit procedures, tenancy agreements and procedures for dealing with anti-social behaviour.

The final requirement is for you to be a ‘fit and proper’ person, by providing a Criminal Records Bureau (CRB) check. This will need to be dated within the previous six months. Your local authority will inform you if this is required.

 

 

Learn how to get a HMO licence here:

http://www.hmopropertyriches.com/

HMO Property Riches Property Negotiation TacticsProperty Tax Strategies

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Plan Your Property Purchase

For any new property that I buy and renovate, I will always make it compliant with any current regulations for that property type in that location. If I am unfamiliar with the location, I will contact the council and ask about minimum requirements. This way, there will be no ambiguity when I come to resell or let the property.

I will do this regardless of whether my intention is to use the property as a House In Multiple Occupation (HMO) or not. For example, I will aim to do the following works as a minimum during any property renovation:

• Install interconnected smoke alarms and heat detectors.

• Install fire doors to kitchens and bedrooms.

• Have the electrical installation checked and upgraded to current standards.

• Ensure gas fittings and appliance meet current safety standards.

This will save me time and money at a later date, especially if I decide to use the property as a HMO.

For any business, ‘Cashflow is King’. Whenever I buy property, I always invest for cashflow. There’s little point in buying a property in a great area for a lot of money, if you’re not making positive cashflow from day 1. Learning how to better manage cashflow can make the difference between your success and failure in business.

It doesn’t matter if you think that your favoured location will generate great capital growth. The question you need to answer is whether you will be able to sustain that capital growth on negative rental returns.

HMOs are a great way to obtain substantial cash flow from your properties. It is not uncommon to achieve up to 300% returns over and beyond single occupancy rentals in high demand locations all over the UK.

Since HMOs provide much needed affordable housing, particularly for younger people, there is a strong market for such accommodation.

A HMO property will not only give you additional cash flow, but you will also benefit from the usual advantages of owning property. For example, you will have good capital growth depending on location and market conditions. Furthermore, it is not always necessary to fill all the rooms to service any finance payments.

If you plan your property purchase carefully, you will be able to grow your portfolio quickly and with minimum effort. By applying some basic rules and understanding current market conditions, investing in property should provide you and your future generations an income for life.

A little bit of knowledge goes a long way:

http://www.hmopropertyriches.com/

HMO Property Riches Property Negotiation TacticsProperty Tax Strategies

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What Is A House In Multiple Occupation (HMO)?

 

Put simply, a House in Multiple Occupation HMO is:

• An entire house or flat that has been let out to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet.

A household is defined as members of the same family living together.

• A house that has been converted into bedsits or other non-self-contained accommodation and that has been let out to three or more tenants who form two or more households and share a kitchen, bathroom or toilet.

(A self-contained unit of accommodation is one which has a kitchen or cooking area, bathroom and toilet inside it for the exclusive use of the household living within the unit)

If the occupiers need to leave the unit to gain access to any one of these amenities then that unit is not self contained.

• A converted house containing one or more flats which are not wholly self-contained and which is occupied by 3 or more tenants who form two or more households.

For a property to be classified as a HMO, it must be used by the tenants as their only or main residence. Properties that are let to students and refugees will be treated as their only or main residence.

If your property falls into any of the above categories, you may need to apply for a HMO licence. In order to find out whether you need to obtain a HMO licence, you must contact your local council and speak to the Environmental Health Officer, who will advise you accordingly.

Every council has their own guidelines for HMO compliance, so the final answer will depend on the size and location of your property. I always advise my clients to call the council before buying a property that they are thinking of converting to HMO usage.

One simple phone call could save you thousands of pounds as you may find that very little is required to prepare your property as a HMO.

Regardless of your property location, you will definitely NEED a HMO licence if your property

1. has three stories or more (including usable basements or attics), and
2. is occupied by five or more people, and
3. those people form two or more households, and
4. the tenants share the kitchen, bathroom or toilet.

If the above applies to you and you don’t have a licence, then I would advise you to contact your local council immediately as you are most certainly breaking the law.

It will cost a neighbour or tenant the price of a phone call to report you, and this could cost you up to £20,000 plus recoverable rent!

Applying for a HMO licence may appear like a lot of work. However, when you’ve gone through the process once, you’ll find it much easier for any subsequent properties that you purchase.

 

 

Increase your property cashflow from HMOs Today:

http://www.hmopropertyriches.com/

 

HMO Property Riches Property Negotiation TacticsProperty Tax Strategies

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