Not usually. Houses in Multiple Occupation (HMOs) with 3 tenants do not usually need a mandatory HMO licence. In most cases, a licence for HMOs is only required if they house 5 or more people. However, some local councils require additional HMO licences for 3 or more tenants.
Whether your HMO has 3 tenants or more, it may still need to meet certain standards, even if it doesn’t need a licence. For example, it should have certain amenities as a standard, adhere to minimum room sizes and have suitable fire precautions in place.
Failing to know your legal obligations is one of the most common landlord mistakes and can result in serious financial and legal consequences. Luckily, at J Property Management, we can help. Our team of property management London experts help landlords stay on top of their legal and compliance obligations – from securing the right licences to making sure that their properties meet health and safety standards. Contact us today to see how we can help!
Does a 3 Tenant Household Need an HMO Licence?
In most cases, HMOs with 3 tenants will not need a licence. However, certain councils may request additional licences so it is always important to check your local area’s specific guidelines.
If there are at least 3 unrelated tenants living in one property, the property counts as an HMO. However, most HMOs will only require a mandatory licence if there are 5 or more tenants living in the same property.
That said, some areas of London and South London will require an HMO licence for 3 tenants. Look out for Additional HMO Licensing schemes which sometimes require a licence for HMOs of 3 or 4 tenants.
The following are just some London boroughs that may require additional HMO licensing:
- Barnet
- Camden
- Ealing
- Greenwich
- Hammersmith and Fulham
- Islington
- Kensington and Chelsea
- Lambeth
- Lewisham
- Southwark
- Tower Hamlets
- Waltham Forest
- Westminster
If you’re struggling to know what licences you need, our team can help. We know London property management and work with hundreds of landlords to help them stay on top of their legal obligations. Talk to us today.
What Counts As An HMO?
It is a landlord’s responsibility to know if their property is an HMO or not. The key criteria for an HMO are:
Multiple tenants
There need to be at least 3 tenants living in the house
Not related
The tenants are not members of the same family.
Shared amenities
Tenants share facilities – they do not have their own private kitchen, toilet or bathroom.
What Is An HMO Licence?
HMO licences are provided by the local council to landlords in order to allow them to rent out their property to several tenants safely. The licence confirms that the property meets certain criteria and adheres to health, safety and quality standards.
When is an HMO Licence Needed?
Any HMO occupied by 5 or more people – who are not a single family and who share facilities – must have a licence.
HMO licences ensure that health and safety standards are maintained. The licences confirm that the building is:
- Safe
- In good condition
- Equipped with smoke detectors
- Prepared in the case of a fire
- Fitted with enough sinks, baths, toilets and cookers for all the tenants.
Some councils will also request additional licences for other HMOs. For example, although HMOs of 3 tenants or 4 tenants do not require a mandatory HMO licence, they may need an Additional or Selective Licence – depending on the borough.
Even without the need for a mandatory HMO licence, smaller HMOs (3 tenants or 4 tenants) have to comply with particular health and safety standards and have planning permission.
When Might You Need An HMO Licence For 3 Tenants?
You will not usually need an HMO licence for 3 tenants. However, you may need one depending on your local council. Depending on your local council, you may need Additional Licencing or Selective Licencing. These outline the need for specific licencing for 3 or more occupants who are not from the same family or for certain types of rented properties.
How Can I Get an HMO Licence?
If you are a landlord renting your property out to 5 or more people that aren’t a single family, it is your responsibility to get an HMO licence.
To do this, you will need to contact your local council and they will have to carry out a Housing Health and Safety Rating System (HHSRS) risk assessment. They’ll need to do this within 5 years of receiving a licence application. If they find any risks, you’ll have to remove these risks before renting out the HMO to tenants.
To be issued with a licence, the council need to be satisfied that:
- The property meets fire safety regulations
- There is sufficient living space for the number of proposed tenants
- Bedrooms meet minimum size requirements (vary per local authority)
- The landlord has no criminal record or past breaches of landlord law
- There is an up-to-date gas certificate
- There is a valid EPC rating
- Essential amenities are provided and in good condition.
How Much Does an HMO Licence Cost?
The price of an HMO licence is set by the local council and therefore depends on where the HMO is. Prices can vary anywhere between £300 to £2,000. Landlords will need to pay a non-refundable application fee (before the checks are carried out) and an enforcement fee (paid just before the licence is issued). Certain local councils will offer discounts on some HMO licences.
Pricing structures vary slightly from council to council; for example, the majority of councils have a single fee per property whereas some councils charge based on the number of bedrooms.
Licences expire every 5 years so a renewal fee needs to be paid to keep the licence valid.
Understand Landlord Obligations with J Property Management
As a landlord, one of the hardest things is making sure you’re staying on top of landlord obligations and have the right licences in place. At J Property Management, we guide you through every step of the way. Our team of property management experts works with landlords across the UK to maximise their profit and keep up with financial and landlord legal obligations.
The result? Enjoying the perks of their property asset with none of the headache. Contact us today to see how we can help!
