With the continuing trend towards investing in property showing no signs of slowing down, a leading Swindon law firm has warned that landlords may be caught out by new rules in the licensing of Houses of Multiple Occupation introduced at the end of last year. And it could cost them dearly. House prices are continuing to rise and more people are renting, so investing in a property to let, or to convert into flats to let, is an attractive proposition to many.
Nita King, Partner of law firm, Lemon & Co
points out that amendments introduced at the end of last year to previous Housing Acts have meant that more properties than ever will now fall under the classification of a ‘House of Multiple Occupation’ (HMO) and will need to be licensed under the compulsory licensing scheme introduced in April 2006.
“The definition of an HMO has been broadened to include not just blocks of flats, but also properties that pass one of three tests, i.e. the standard, self-contained flat or converted building tests,” explains King. “Broadly speaking, where unrelated occupiers share basic amenities either in a building as a whole or within self-contained flats, the property could potentially be classed as an HMO.” Failing to apply for a licence is a criminal offence, the maximum penalty for which is a fine, upon conviction, of up to £20,000. In addition to this, tenants can apply to claim their rent back, local authorities can claim their housing benefit back and could even impose an Interim Management Order, taking the management of the property out of owner’s hands. If landlords have any doubts as to whether a property requires licensing or not, one should seek legal advice before it’s too late, urges King.