It’s a commonly held misconception that as a multi-let landlord seeking to let a HMO property you must have an HMO licence in place before allowing tenants to take up occupation. In simple terms, this is not true. Government rules state that a landlord can let a property as a house in multiple occupation provided they have an HMO licence application in progress and are adhering to all of the fire safety legislation in place to safeguard tenants.
The interesting point here is that the time it takes for a council to approve an HMO licence can be considerable. Here in Nottingham we recently came across a case where the local council took as long as two years to make a final decision on an HMO licence application. The good news was that it eventually got the approval and the landlord was able to continue letting to his group of working professionals. The real threat for the landlord was that his property fell in an Article 4 Direction area – an area with strict limitations for new HMO licences. He got through the application on the technicality that the property had been held as an HMO by a previous landlord seven years prior and although the licence had expired the precendent had already been set.
Whilst the time it takes to apply for an HMO licence can be frustrating the inherent delays do allow the letting process to begin immediately. Landlords can on this basis earn an immediate return from their property whilst the council ponder the application to let to sharers. However, be warned – should the council decline an application they do have the enforcement powers to insist that all tenants are served notice to vacate rendering the property only sutable for a single let or re-sale. More often than not this will then mean having to remove certain fire safety measures such as fire door closers and emergency lighting to render the property more elegant in the eyes of a standard let.
Whilst it may seem appealing to simply buy a property and then let it to a group of working professionals or students whilst an HMO licence application is underway, landlords would be well advised to do so only on the basis that they feel there is a genuine opportuntity for the licence to be granted.
Are you considering investing in HMO properties as a means to generate greater returns? If so, feel free to talk with our resident HMO expert, Garry Slater who will be only too happy to discuss the pros and cons of owning shared properties.
Tel. 0115 981 8855