Landlords in Chelmsford are set to be affected by new national regulations introduced in October, with an estimated 600 rental properties in the city impacted by the change in rules pertaining to a house in multiple occupation (HMO).
At present, if you are letting out an HMO, you only need a licence if it has three or more storeys and five or more people living there.
However, from October 1, a new rule is coming into play which will mean this is no longer the case. Regulations extending mandatory HMO licensing will come into force, removing the three-storey rule and bringing purpose-built flats – where there are up to two flats in the block – into the scope of compulsory licensing.
From October, the criteria concerning the types of properties that need an HMO licence will change. A property that is occupied by five or more persons and a property that is occupied by persons living in two or more separate households will both meet the criteria for the new rules.
If you don't know whether your property needs a licence or not, you can speak to your letting agent, check with your local council or seek independent specialist advice.
It's predicted that, as a result of the new regulations, an extra 177,000 HMOs will be subject to mandatory licensing in England (on top of the 60,000 that already are).
With the upcoming changes in mind, Chelmsford City Council has written to property owners who may be directly affected by the change in law.
If, as a landlord, you let a property occupied by five or more persons or one that is occupied by persons living in two or more separate households, your rental home will probably require a licence from the local council.
A licence, which lasts for five years, includes conditions relating to room sizes, waste collection, fire protection and smoke and carbon monoxide detection, to ensure tenants are kept safe at all times.
The fee varies depending on what type of HMO you have. For an HMO with up to five units of accommodation, the fee is £900. For HMOs with more than five units, the fee is £900 for the first five units and £55 for each additional unit.
The fee for an eight-unit HMO, for instance, would be £1,065 – made up £900 for the first five units and then three lots of £55 (equalling £165) for the additional units.
If the new criteria means your property needs an HMO licence, it's advised that you act now (if you haven't already done so) before it's too late. Landlords meeting the new criteria for mandatory HMO licensing must submit an application by the October 1 2018 deadline. Those who fail to apply for the required license will be committing a criminal offence from that date.
“The advice is not to wait until the last minute to make an application for a license,” Susan Sullivan, councillor for Safer Communities, said. “Your applications must be submitted by 1 October, after which it will be an offence to have an unlicensed HMO, but landlords and agents can apply now for a licence via the Council's website.”
According to Chelmsford City Council's page on Licensing a House in Multiple Occupation, those making an application need to provide a number of documents, including: a current gas safety certificate, a current electrical installation condition report, a written fire risk assessment and a plan of the property showing room sizes, numbers of rooms and numbers of occupiers in each room.
If you can provide evidence that you manage your HMO well and that it meets current standards, the Council will fast-track your application.
The Council has minimum and licensed amenity standards for HMOs in the Chelmsford area, against which any application will be judged. This includes standards on space, heating, provision of facilities, natural lighting, electrics, fire precautions, security, gas safety, waste disposal, water supply and smoke/carbon monoxide alarms.
Those who operate an HMO without a licence – or don't follow the conditions of the license – could receive severe fines and penalties. This includes banning orders, rent repayment orders and financial penalties of up to £30,000.
You can apply for a HMO license from Chelmsford City Council here.
For more information about HMOs in Chelmsford, the new rules and whether you need a license or not, you can contact Balgores Property Group's letting agent team in our Chelmsford branch.
To find out how much your home could be generating in rental income, you can request a free instant online valuation.