Whether you’re considering entering the world of HMO property management in England, or whether you’re new to the business, something you should never overlook are the legal implications of operating an unlicensed HMO. Not all HMOs require a licence, but many do, and if you’re caught without one, the penalties for running an unlicensed HMO in England can be significant.
Compliance with HMO regulations
HMO licensing has an important part to play in ensuring the rental accommodation’s quality, safety, and legality, not only for its tenants, but also for its landlord’s peace of mind. The impact on tenants of unlicensed HMOs can be quite severe, with a far higher chance of them having to live in substandard conditions, facing potential safety hazards and lacking the essential legal protections that they should be entitled to.
The current law in the UK states that if you are running a HMO in England that houses tenants from more than five separate households, you must obtain a licence. However, that doesn’t always mean that there are no regulatory requirements for HMO licensing if you’re running a smaller property.
In some areas, the local authorities require all HMOs, regardless of size to be licensed. Therefore, you need to take care to do your homework thoroughly and check whether you need to make a licence application before advertising your property to prospective tenants.
A Guide To Unlicensed HMO Consequences For Landlords
Some landlords are unaware of the risks of owning an unlicensed HMO because they haven’t done their research before making their investment. Others know that the authorities can take enforcement actions against unlicensed HMOs, but just don’t believe that they’ll be caught. Unfortunately, these landlords may come to regret their actions when they end up facing the legal and financial ramifications of operating an unlicensed HMO.
If you rent out an unlicenced HMO, you could receive an unlimited fine, and your tenants are able to claim repayment of their rent for up to a year. It’s also important to understand that renting out a HMO in England without the correct licence is a criminal offence that could result in a criminal conviction. Don’t forget, also, that while you’re dealing with all of this, you’ll be losing out on rental income too.
But enough of the doom and gloom. Let’s look at how to avoid the situation in the first place!
What Are The Steps To Remedy An Unlicensed HMO Situation?
If you’re running a HMO that requires a license, and you don’t have one, it’s important to take steps quickly to remedy the situation.
The first step would usually be to apply for retroactive HMO licensing, however if your property doesn’t yet meet the required criteria, you should address the property deficiencies first and ensure that you’re complying with all the regulatory requirements before making your application.
It’s crucial to stay informed about all legal requirements for HMO landlords at all times, and to ensure that you’re always compliant with the regulations so that you don’t fall foul of the law.
Seeking professional advice is crucial, whether you’re yet to advertise your HMO to prospective tenants or whether you need to obtain a retroactive licence.
An experienced HMO property management company in England like
The HMO Network can give you the information you need and help you avoid the costly penalties of failing to comply. Call us today on 01245 835859 or email beth@charlesdavidcasson.co.uk.