Question: Our house is too big for us and so we have a plan: we want to buy a smaller place and convert our house into bedsits as an investment project. Everyone tells me we have to be aware of "HMO". So what's that?
© Merrily Harpur
Answer: It stands for House in Multiple Occupation. The concept comes from the Housing Act 2004, which brought in new rules aimed at improving the standard of rented accommodation. It had a particular impact on property where tenants have to share facilities.
A property is likely to be classed as an HMO if it is let to at least three tenants as their main home, if those tenants form two or more households, and if they share basic amenities, such as a kitchen or bathroom and toilet.
If you convert your property into bedsits then it will become an HMO and that means you will need to ensure, among other things, that appropriate fire safety precautions are in place. Contact the environmental health officer at your local council and ask for an inspection of your building before taking things further.
You may need planning consent for an HMO and so also contact the council's planning department to establish the planning policy for your area with regard to HMOs.
Some large HMOs are subject to mandatory licensing, too. If your house has three or more storeys and five or more tenants forming more than one household then you will require a licence.
Ask the council for an application form and what fee they charge. The council must be satisfied you are a suitable person to hold a licence, but if you are refused you can appeal to the Residential Property Tribunal.
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Fiona is a partner in the residential real estate team at Thring LLP www.thrings.com.