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The pros and cons of Houses of Multiple Occupation

Chloe Buxton, Trainee Solicitor in Astle Paterson’s Commercial Department, discusses Houses of Multiple Occupation.

Chloe said “Houses of Multiple Occupation (HMO) can be extremely profitable, allowing in some instances triple the rental income for Landlords that choose this type of renting instead of renting to a single household.  They can be used from large scale lettings down to a two-up-two-down you intend may wish to buy for your child’s University accommodation.

However, if you are considering purchasing a property to rent as a HMO, please bear in mind the additional stringent requirements that you will have to meet to operate an HMO without penalty.

Not only are there extra responsibilities on a HMO Landlord, one of them including liability for the payment of your tenants’ council tax (this should be accounted for in any rent that is charged), you will also have to obtain a licence from the Local Authority if the property is-

a)  at least three storeys high;

b)  will have at least five tenants who live there; and

c)  the tenants will share bathroom and kitchen facilities

If you answered yes to each of the above then your property will be classed as “large” HMO, which means if you do not obtain a Licence from your Local Authority then you could face a fine and may potentially have to pay up to 12 months’ rent as compensation.”

Chloe concluded “If you are considering purchasing a Property to use as an HMO then you should make enquiries with the Local Authority about the requirements that you will need to satisfy to run a successful HMO and decide whether the property will be able to meet the standards set by the Local Authority.

Some Local Authorities may even require Landlord’s to obtain licences for smaller HMO’s and they will be able to provide further information about safety regulations and any planning conditions that you may need to consider along with any fees payable.”

Should you be considering purchasing a property to let out to multiple tenants please contact Chloe Buxton, Trainee Solicitor in Astle Paterson’s Commercial Department to discuss matters further on 01283 531366 or by email at cbuxton@astlepaterson.co.uk

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