All Change with New HMO Law
This month saw the introduction of a new law affecting owners of Houses in Multiple Occupancy (HMO).

As of 1st October 2018, HMO legislation will affect more properties than before. Landlords must check if they need to comply with the new requirements. Three aspects are involved:

1. HMO Licencing – is your rental property a HMO?
Up to 30th September, regulation enforced mandatory licensing on HMOs of at least three storeys and five occupants comprising of two or more unrelated households. 
The new legislation brings smaller HMOs within the scheme and extends to a wide range of properties which were previously unaffected by mandatory licensing. This includes properties such as certain flats above high street shops and small blocks of flats which are not connected to commercial premises. The ‘three-storey rule’ has been removed.

Local Authorities will determine whether a property meets a specific test to conclude whether it will need to be licensed. Three tests are involved:
- Standard Test: More than one household has living accommodation and at least two households share basic amenities, or the living accommodation is lacking in basic amenities.
- Self-Contained Flat Test: Occupied by five or more people forming more than one household and the flat lacks basic amenities, or more than one household shares basic amenities.
- Converted Building Test: A building that has been converted and where one or more of the units of living accommodation is not a self-contained flat. Purpose-built flats within a block containing three or more self-contained flats are not included. Converted blocks of flats (or Section 257 HMOs) will not require a mandatory licence, but individual flats within that building will require a licence if they meet ‘The Standard Test’.

Landlords who require a HMO licence and have not submitted an application could face prosecution or a fine of up to £30,000 per offence.

2. HMO Room Sizes
Further changes mean that rooms used for sleeping in will have to adhere to minimum room size requirements, using either the Government’s standards below:
- Children aged 10 and under – 4.64 square metres
- 1 person aged 10 and over – 6.51 square metres
- 2 people aged 10 and over – 10.22 square metresOr alternatively, Councils can set their own minimum room size requirements higher, which may mean that they could be even tougher than the Government’s standards.
 
3. Storage Facilities
Another condition of the licence is compliance with the local authority’s storage, disposal and collection of household waste scheme (if one exists). Consequently, this means that local authorities are not allowed to introduce commercial waste charging on HMOs.

Housing and Planning Minister Gavin Barwell said: “In order to build a country that truly works for everyone, we must ensure that everyone has somewhere safe and secure to live. These measures will give councils the powers they need to tackle poor-quality rental homes in their area. By driving out rogue landlords that flout the rules of business, we are raising standards and giving tenants the protection they need.”

Are you affected by the new HMO legislation?
If in doubt, talk to the friendly team at JTM Homes. “We work with several HMO landlords,” explains Jason Dyer who manages the independent north London estate agency. “HMO properties continue to offer a good property investment opportunity and we’re happy to have a no-obligation chat about what the new law means on a day-to-day basis for landlords.”