As of 1 October 2018, a property will be considered a HMO if it is occupied by five or more people and these people are from two or more separate households.

A household is either a single person or members of the same family who live together; a family includes people who are:

·         Married couples or couples living together as married (including people in same-sex relationships);

·         Relatives or half-relatives e.g. grandparents, aunts, uncles, siblings, nieces, cousins;

·         Step-parents and step-children and half-relatives;

·         Foster parents and foster children;

·         Some domestic staff if they are living in the house as a result of the terms of their contract.

Note tenants may be considered to belong to separate households even if they have a joint tenancy agreement. For example, if a property was let to five students then it would probably be classed as a HMO even if the students took out a joint tenancy agreement.

The requirement for a HMO to cover three or more stories of a property will be removed; it is anticipated that this will result in approximately 177,000 rental properties being classed as HMOs.

In addition to Mandatory Licensing, be aware that councils can impose Additional Licensing and Selective Licensing - consult with the local council soon as possible to establish what is in force in the area.

If a landlord or his managing agent breaches the terms or conditions of the licence, unless there is a reasonable excuse they are committing a criminal offence and the fines are unlimited. Under a rent repayment order, landlords may have to pay back to a tenant any rent they have received, or to the council any housing benefit they have received. If the breach is serious or persistent the licence may be entirely revoked and the council must take over the HMO management.

It is a criminal offence to operate a HMO that should be licensed but isn't and if convicted, the fines for non-compliance are unlimited.

Speak to your local council and check if, in addition to Mandatory Licensing, they are operating Additional Licensing and/or Selective Licensing Schemes. Contact your mortgage provider and insurance company to ensure that your product and policy covers HMO’s and they are often excluded.

There is no grace period for Mandatory Licensing; all landlords covered by the rules must apply for a licence by 1st October 2018.