Maximizing Your Investment: How to Flip Houses Successfully

June 07, 2022

One of the biggest challenges for HMO landlords is keeping on top of the legal requirements, especially since they’re updated all the time!

Here is a list of the HMO (Houses In Multiple Occupation) legal requirements & regulations for HMOs in England.

Failing to comply could result in prosecution.

NB obligatory disclaimer we are not qualified to give legal advice. Any information provided is based on personal experience and information obtained from various different sources, and is never legal or professional advice. You should always get professional advice on any legal matters!

One thing you may notice while scrolling through the HMO legal requirements listed below, is that many of them are the same legal requirements for Single Lets, and that’s because most UK tenancies, both for single let and HMO’s, are assured shorthold tenancies (ASTs).

ASTs are Governed under the Housing Act 1988, Housing Act 2004.

However, HMOs have additional regulations to comply with, largely related to fire safety, because studies have shown that there are more safety aspects to be aware of when a group of unrelated people live together. The extended AST regulations that apply to HMOs can be found in the The Management of Houses in Multiple Occupation (England) Regulations 2006

Page contents:

HMO License

According to the GOV webpage on HMOs, you must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if all of the following apply:

it is rented to 5 or more people who form more than 1 household
some or all tenants share toilet, bathroom or kitchen facilities
at least 1 tenant pays rent (or their employer pays it for them)

However, even if your property doesn’t qualify as a “large HMO”, you may still require a license because local councils have the power to impose additional licences. So the best thing to do is check with your local council to determine if a licence is required for your property. Even Single Lets in certain boroughs require a licence under the Landlord Licensing Scheme.

A licence is ‘granted’, and not provided by default. In order to be granted one you must ensure the property is suitable for HMO. Your local council can provide all information you need in order to qualify for a licence, but it’s mostly about meeting the HMO safety requirements which will be listed on this page.

HMO licences must be renewed before they expire (they usually last for 5 years, but can vary by local authority), and landlords require a separate licence for each HMO. They usually cost between £100 to £200 per year.

HMO Minimum Room Size Regulation

From 1st October 2018, the HMO minimum room sizes regulation will come into force:

The floor area of any room in the HMO used as sleeping accommodation by one person aged over 10 years should not be less than 6.51 square metres;
The floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years should not be less than 10.22 square metres;
The floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years should not less than 4.64 square metres;
Any room in the HMO with a floor area of less than 4.64 square metres is not to be used as sleeping accommodation.

The Management of Houses in Multiple Occupation Regulations 2006

The Management of Houses in Multiple Occupation (England) Regulations 2006 & The Management of Houses in Multiple Occupation (Wales) Regulations 2006 impose duties on managers (i.e. landlords) of HMOs to:

provide contact details (name, address, and contact telephone number) of the property manager (i.e. landlord) to each household and also the details clearly displayed in a communal area
ensure that all means of escape from fire are maintained and kept free from obstruction, all fire precautions are maintained and that steps are taken to protect occupants from injury
maintain water supply and drainage
ensure annual gas safety checks are carried out (more details further down), and electrical installations are checked every five years (more details further down), and the manager must not unreasonably cause any interruption to gas or electricity supply
maintain in repair and keep clean all common parts and installations, and ensure common parts have adequate lighting
ensure each unit and furniture are clean at the start of each occupation and maintain the internal structure and installations in each letting
provide adequate waste storage facilities and ensure that there is appropriate collection of waste.

HMO Gas Safety Regulations

The Gas Safety Regulations 1998 place a statutory duty on all landlords of residential property to ensure that all gas appliances, pipe work and flues are maintained in a safe condition.

An inspection of all gas appliances that is provided with in the property (e.g. cooker, hob etc) by the landlord must be inspected annually by a Gas Safe Registered Engineer. After inspection a warranted Gas Safety Certificate (also known as a CP12) will be issued for proof of inspection; tenants and landlord should keep a copy.

Under the Houses in Multiple Occupation Management Regulations, landlords must be able to provide the current Gas Safety Certificate upon request by the local authority. And for HMOs that require a HMO licence, the landlord will need to provide the Certificate as part of any licence application, and also send the latest copies to the local authority every year.

Here’s a more detailed guide on Landlord Gas Safety.

HMO Fire Safety Regulations

As a rule of thumb, landlords are under a common law duty to ensure that the property they provide is safe. All residential properties in England and Wales should comply with building regulations.

HMOs are considered to have a higher risk of a fire than Single Lets and regular residential properties, so that means they have different (higher) standards. But there’s nothing to be overly concerned about, because most of it is based on applying good old common sense.

HMO Fire safety requirements can vary by local authority, and generally, the guidelines for what is required in order to be granted a HMO licence will determine what you need to do in order to meet your fire safety obligations.

The best thing to do is contact your local HMO Enforcement Officer (who works for your local authority) – as they are responsible for ensuring that the HMOs in a given area meet the required standards, so they should be able to inform you of exactly what you need to do in order to comply in regards to fire safety.

The requirements may include the following (but as said, may vary by each local authority):

Installing fire doors
Supplying fire blankets and fire extinguishers
Installing specific types of door handles and locks (e.g. Thumb Turn Locks)
Installation of fire and CO alarms. This article on fireservice.co.uk states:

HMO 1 or 2 Story. Individual floor area of no more than 200sqm: An appropriate mains powered interconnected smoke alarm system. Special HMO guides apply. CO Alarms present in all high risk rooms.
HMO 3 stories or higher: An appropriate fire alarm system with a central panel. Special HMO guides apply. CO Alarms present in all high risk rooms.

However, it’s still crucial to check with your local HMO Enforcement Officer.

HMO Furniture and Furnishings Regulation

Furniture provided by the landlord must meet the fire resistance requirements in the Furniture and Furnishings (Fire) (Safety) Regulations 1988.

Furnishings and upholstered furniture supplied by landlords must meet fire resistance requirements, which includes:

beds, headboards of beds, mattresses
sofas, sofa-beds, futons and other convertibles
nursery furniture
garden furniture which is suitable for use in a dwelling
scatter cushions, bean bags, window seats and seat pads; pillows
padded stools and padded chests
put-u-up beds and garden loungers/seats
loose and stretch covers for furniture

Furniture manufactured since March 1989 will comply with these regulations and most will be marked with a label showing compliance.

The regulations do not apply to:

sleeping bags
bed-clothes, duvets and pillowcases
loose covers for mattresses
curtains and carpets
furniture and furnishings manufactured before 1 January 1950 as the inflammable materials were not in use prior to 1950
properties let continuously to the same tenant since prior to December 1996 until there is change of tenancy

Fitness for human habitation

Landlords are required to ensure their properties are ‘fit for human habitation’ from the beginning and throughout the tenancy, that includes bedrooms and all communal areas.

Section 10 of the Housing Act sets out the factors that are taken into consideration when determining if a house is ‘unfit for human habitation’, which are as follows:

repair (i.e. the building shouldn’t be neglected and in bad condition),
stability (i.e. the building shouldn’t be unstable),
freedom from damp (i.e. if there are serious damp issues),
internal arrangement (i.e. the property shouldn’t have an unsafe layout),
natural lighting (i.e. there should be enough natural light),
ventilation (i.e. there should be enough ventilation),
water supply (i.e. there should be a supply of hot and cold water),
drainage and sanitary conveniences (i.e. if there are problems with the drainage or the lavatories),
facilities for preparation and cooking of food and for the disposal of waste water;
and the house shall be regarded as unfit for human habitation if, and only if, it is so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition.

Repairs & Maintenance

Under section 11 of the Landlord and Tenant Act 1985, the landlord is responsible to:

(a) to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes),
(b) to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and
(c) to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.

Under section 11 of the Landlord and Tenant Act 1985, the landlord is not required to:

to carry out works or repairs for which the lessee is liable by virtue of his duty to use the premises in a tenant-like manner, or would be so liable but for an express covenant on his part,
to rebuild or reinstate the premises in the case of destruction or damage by fire, or by tempest, flood or other inevitable accident, or
to keep in repair or maintain anything which the lessee is entitled to remove from the dwelling-house.

HMO Electrical Safety Inspection/Report

Landlords have a legal duty to ensure that their rental property, and any electrical equipment provided, is safe before a tenancy begins and throughout its duration.

In accordance with the ‘Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020’, landlords in England are legally obligated to ensure national standards for electrical safety are met. In order to comply, HMO landlords are legally required to ensure the ‘fixed’ electrical installations (e.g. plug sockets, light fittings, fuse box etc) in their rented properties are inspected and tested by a qualified electrician, at least every 5 years.

Landlords must have an ‘Electrical Installation Condition Report’ (EICR), which will ensure their electrical installations are inspected and tested. A copy of the report must be provided to each new tenant before they occupy the premises.

The inspection will check for:

any electrical installations are overloaded
there are any potential electric shock risks and fire hazards
there is any defective electrical work
there is a lack of earthing or bonding – these are 2 ways of preventing electrical shocks that are built into electrical installations.

Plugs and Sockets (Safety) Regulations 1994

This regulation requires that any plug, socket or adapter supplied for intended domestic use complies with the appropriate current standard, and specifically that:

the live and neutral pins on plugs are part insulated so as to prevent shocks when removing plugs from sockets and all plugs are pre-wired.

Consent to let

Before letting a property, landlords must obtain permission and/or inform the following:

Mortgage lender
In respect of leasehold properties, the freeholder.
Any housing association or other body which has regulations applying to the property, e.g shared ownership.
Any adult who has been living in the property with the landlord as husband, wife or partner who may have occupancy rights.
The insurance company – who must confirm that cover will be maintained if the property is let.

Tenancy Deposit Protection

If a deposit is taken from a tenant, landlords must secure the deposit into one of three government approved Tenancy Deposit Protection (TDP) schemes with in 30 days of receiving the deposit, and they must also serve their tenants with Prescribed Information related to the deposit, within 30 days.

Taxation of Income from Land (Non-Residents) Regulations 1995

Being a landlord is like any other profiteering business, which means profit is subject to taxation.

Generally speaking, this can work in two ways…

If you’re not operating your properties through a limited company, you’ll need to file a Self Assessment tax return form for each tax year. The standard income tax rules and price brackets will apply.
If you are operating through a Limited company (because it can be more tax efficient), then your company will be subject to business taxation rules.

Needless to say, it’s always best to discuss your finances with a specialist tax accountant.

Minimise Risks of Legionella

The “responsible” person(s) who manage the HMO is obliged by law to carry out annual checks for legionnaire’s disease, and also between tenancies, and if necessary, take action. Records of the test should be kept for at least five years.

HMOs pose a greater risk to Legionella compared to Single lets, so Legionella risk assessments are crucial.

Here’s a more detailed article on the Landlord Legionella Legislation and how to conduct a risk assessment.

The General Data Protection Regulation (GDPR)

GDPR came into effect on the 25th May 2018, and it applies to ALL landlords.

Essentially, as landlords, we need to process and control our tenants information in a transparent fashion, which includes explaining:

What personal information we collect.
Why we need their personal information.
How we might use their personal information (including who the information might be shared with), and ensuring we only use it in that way (unless there are overriding legal precedence requiring the information).
How long their personal information is retained for.

In practical terms, it means that the documents we use to gather personal information from our tenants (e.g. tenancy agreements, application forms etc) need to have a privacy policy which clearly addresses the points above.

Here’s a more detailed article on Landlords and GDPR

Information Commissioners Office

Under the Data Protection Act individuals and organisations that process personal information need to register with the Information Commissioner’s Office (ICO).

Basically, if you store, use or delete personal information of your tenant(s) (e.g. name, email, telephone, address etc.) on any electrical device (i.e. computer, phone or tablet) – which is almost all landlords in the 20th century- then you should be registered with the ICO. You can register here.

Registration currently costs £35-40 per year (depending on payment method).

Exemptions are granted, but you most likely won’t qualify for one. If you want to double check, you can use this tool on the ICO website that will help you determine whether you not to register or not.

On a sidenote: from what I’m aware 1) most landlords are oblivious to this requirement so aren’t registered 2) many of those that are aware of the ICO don’t think it’s even necessary for landlords to register – there’s a bit of an ongoing debate among landlords on the issue.

One thing I can say though, is that I’ve yet to hear of a case where a landlord has been prosecuted for failing to registered. But that’s not to say it’s NOT required.

Make of that what you will, I’m just saying.

I discuss ICO landlord registration in more detail over in my GDPR blog post (it’s all related).

‘Right to Rent’ immigration checks

Under Section 22 of the Immigration Act 2014, Landlords in England are required to check if their prospective tenants have the legal right to be in the UK. In most cases, the landlord only needs to check for proof of ID and citizenship. But more complex cases (i.e. foreign Doctors from India), additional paperwork may need to be checked.

You can use this tool provided by the GOV to check if the legislation currently applies to you.

More details can be found on the landlord ‘Right to rent’ guide, including how to fully comply.

‘How to Rent’ Guide

Landlords should provide their tenants with a document titled “How to rent: the checklist for renting in England”, as published by the Department for Communities and Local Government, at the beginning of new tenancies that start on or after October 2015 in England only.

The guide will get updated over time, so landlords should provide tenants with the most up to date version at the time the tenancy begins. If a ‘new’ tenancy agreement is granted with the same tenants and a new version of the guide has been released, the latest version should be provided.

Serving the booklet isn’t a legal requirement, however, it is part of the ‘Deregulation Act 2015‘ (more details further down).

You can download the guide from here and read more about the requirements on the main ‘How to rent’ guide for tenants post.

Tenant Fees Act 2019

On the of 1st June 2019 the “Tenant Fees Act 2019” came into force, which is a legislation that focuses on banning and restricting letting agents and private landlords (in England only) from charging single-let & HMO tenants with certain fees, which includes referencing fees, oversized deposits and end of tenancy cleaning services.

In short, if your tenancy (in England) started on or after 1st of June 2019, you are only permitted to charge HMO tenants the following “Permitted Payments” as set out by the Act:

Rent
Tenancy deposit (capped at five weeks’ rent if rent is less than £50k per year, or six weeks’ rent where the total annual rent is £50k or above).
Holding deposit (capped at one week’s rent)
Payments to change the tenancy when requested by the tenant (capped at £50).
Payments associated with early termination of the tenancy, when requested by the tenant.
Payments in respect of utilities, communication services, TV licence and council tax.
A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement.

If you charge your tenants with anything other than what is listed above, such as ‘referencing fees’, ‘inventory costs’, or costs associated with ‘professional end of tenancy cleaning’ services, then you’ve most likely unlawfully charged your tenants with a “Prohibited Payment”, which is punishable by hefty fines, starting from £5,000.

For more details, refer to the “Tenant Fees Act 2019” blog post.

Deregulation Act 2015

This isn’t really a legal obligation, but more so a consequence of not complying with some of requirements listed above.

Providing that you abide by all the applicable requirements listed on this page, you should already be complying with the requirements of the ‘Deregulation Act 2015‘. The Act was introduced in October 2015 to protect tenants from unfair eviction and to ensure landlords have complied with certain legal responsibilities.

To comply with the Deregulation Act 2015, landlords must have:

secured tenant’s deposit with in 30 days
served tenants with additional information relating to deposit being secured (Prescribed Information) within 30 days of receiving the deposit.
supplied tenant with a valid Gas Safety Certificate before the tenants occupy the premises.
supplied tenant with an up-to-date copy of the “How to rent” guide at the beginning of the tenancy.

If you fail to comply with the above, it may impede on your ability to serve a valid section 21 notice, which means you may not be able to repossess your property unless you have grounds for eviction e.g. if your tenant falls into arrears.

Tenants right to complain about an HMO landlord

Lastly, a word of warning: tenants have the right to complain to the local council if they think you’re falling short of your HMO responsibilities.

Depending on the nature and seriousness of the complaint, the council can unexpectedly spring a property assessment. The assessment identifies specific health and safety hazards in the property, and can lead to prosecution and the revocation of the HMO licence if the minimum standards aren’t met.

The inspection will specifically check if the property: