What Is an HMO Rental Property?

“HMO” is one of those terms that sounds technical but decides real money. Whether your home was a House in Multiple Occupation, and whether it needed a licence, is usually the whole of a Rent Repayment Order claim.

The legal definition

An HMO is defined by section 254 of the Housing Act 2004. The version that catches most shared housing is the standard test. A property is an HMO if all of the following are true:

• It consists of one or more units of living accommodation that are not self-contained flats;
• It is occupied by people who do not form a single household;
• They occupy it as their only or main residence, and that occupation is the only use of the accommodation;
• Rent is payable (or other consideration is given); and
• Two or more of the households share a basic amenity — a toilet, a bathroom or a kitchen — or the accommodation lacks one.

There are other routes into the definition: a self-contained flat can be an HMO in its own right in certain circumstances, and a building converted into flats that does not meet the 1991 Building Regulations standard can be an HMO under section 257 even though each flat is self-contained.

“Household” is the word that does the work

Section 258 defines it. A household is people who are related or living as a couple — married or civil partners, people living together as if they were, and relatives such as parents, children, grandparents, siblings, aunts, uncles, nieces, nephews and cousins.

Everyone else is a separate household. So:

• A family of five sharing a house is one household. Not an HMO.
• Five friends sharing a house is five households. An HMO.
• A couple plus three unrelated friends is four households, and five people.

That last example is the one landlords most often get wrong, and it is squarely over the mandatory licensing threshold.

Which HMOs need a licence?

Being an HMO and needing a licence are two different questions. There are three schemes:

Mandatory HMO licensing

Applies across the whole of England. Since 1 October 2018 it covers any HMO occupied by five or more people forming two or more households who share a toilet, bathroom or kitchen. The old rule requiring three or more storeys was abolished — a five-person two-storey house or a large flat is caught just the same.

Additional HMO licensing

A local scheme a council may bring in for smaller HMOs, typically those with three or more people forming two or more households. It applies only in the areas the council has designated, and designations start, expire and get renewed. More on additional licensing.

Selective licensing

Different again: it applies to ordinary rented houses and flats, not just HMOs, in a designated area. A single tenant or one family can be covered. More on selective licensing.

What a licence obliges a landlord to do

A licence is not a rubber stamp. It runs for a maximum of five years, is personal to the holder and cannot be transferred if the property is sold. It carries conditions, which commonly cover:

• a valid annual gas safety certificate;
• electrical installations and appliances kept safe, with periodic inspection;
• working smoke alarms, and carbon monoxide alarms where required;
• fire doors, escape routes and fire-fighting equipment;
• minimum room sizes for sleeping accommodation;
• adequate kitchen, bathroom and toilet provision for the number of occupiers;
• adequate refuse storage and disposal.

Councils also apply the Housing Health and Safety Rating System to assess hazards, and can serve improvement notices where a property falls short.

Why this matters to your claim

If your home was an HMO that required a licence, and your landlord did not have one, they were committing an offence under section 72(1) of the Housing Act 2004 for the whole of that period — and that offence is a ground for a Rent Repayment Order worth up to 2 years’ rent.

You can check the licensing position yourself: every council must keep a public register of licensed HMOs under section 232 of the Housing Act 2004. Look for your address, and check both the licence holder’s name and the start and end dates against your own tenancy.

This article is general information about the law in England and is not legal advice about your own circumstances. Licensing designations vary between local authorities and change over time. The rules differ in Wales, Scotland and Northern Ireland.