The law for landlord and tenants is constantly changing. As such it is vital that landlords make themselves aware of the changes and review their properties on a regular basis to ensure they are compliant.
The rules for properties occupied by more than one household (e.g. student houses or properties rented by the room to individuals rather than to a couple or one family) became stricter in October 2018 with more properties requiring a licence. If more than 3 tenants live in a property and form more than one household and they share a bathroom or kitchen facilities then the chances are you will need a licence. These licenced properties are known as Houses of Multiple Occupation (HMO) and a failure to apply for and obtain a licence from the local authority can result in a fine of up to £20,000 and having to pay rent back to the tenants.
Furthermore, landlords need to ensure that they keep their properties in a safe and habitable condition. If a property is not deemed to be safe or not have relevant gas safety checks then licences will be refused and fines will be issued. Local Authorities over the past years have shown that they are proactive in taking enforcement action against those landlords who have not complied with their obligations.
In September 2019 one landlord in Lincoln was fined £40,000 for failing to ensure a property was safe for the tenants and for not having a HMO licence. The 7 tenants were living in conditions deemed to be dangerous by the Courts. Failings of the landlord included the ground floor not having a working fire alarm, the bedrooms not having fire doors fitted, the stairs were painted with gloss paint and as such caused a real slip hazard and the bedroom doors could be locked with padlocks which potentially delayed an escape in an emergency.
This case follows a similar one in Hertfordshire in May 2019 when a landlord was fined in excess of £45,000 for failing to have an HMO licence in place and for not having the correct safety measures at the property. This landlord claimed by way of mitigation that he was not a professional landlord but this was not seen as an excuse for the failings. The Local Authorities and the Courts are strict when it comes to landlords on the basis that if you are going to rent a property you and get the benefit of the income you need to ensure you are complying with the law.
While HMO properties need to be correctly managed, and the penalties for doing so are significant, there has been an increase in landlords renting property as a HMO on the basis that they often yield higher income and are less often completely empty so income is more reliable. Before you decide this is the right route for you it is important to check the rooms are big enough as there are minimum dimensions for bedrooms and that the property is in a sufficient state of repair.