New HMO licensing scheme will draw in more landlords from 1 October

Monday 1 October 2018 will see the introduction of a new licensing scheme for Houses in Multiple Occupation (HMOs), which will see the scheme apply to properties of less than three stories in height.

Under the new rules, properties occupied by five or more people who are not all related to each other and who share facilities will be regarded as HMOs.

A property rented out to four members of the same family and a friend, would now be subject to the rules and require an HMO license.

Zahra Himani, a Senior Associate in our property team said: “The new legislation will impact a large number of landlords and it will be imperative that landlords take action to ensure that they are compliant.

“When buying or selling property with tenants in situ, it will be even more important to ensure that due diligence is undertaken as part of the conveyancing process to obtain proof that the landlord has complied with all requirements.

“Buyer clients will be discouraged to simply take a view, given the penalties that landlords face for non-compliance and the issues that could arise if possession proceedings are required to be instigated.

“An additional consideration will be mortgage lenders who, undoubtedly, will want confirmation that all necessary paperwork is in place before releasing funds.”