PROPERTY LICENSING FAQS

Frequently asked questions:

Property licensing is the Local Authority’s process of improving living standards in rental accommodation. There are different types of licence for different types of property.
“HMO” stands for house in multiple occupation.

Generally these are houses where the inhabitants are not family, such as typical shared houses.

In order for your house to be classed as an HMO, you must have:

  • 3 or more tenants
  • Forming more than one household*
  • Sharing facilities

*See next FAQ for a definition

The term ‘household’ in this sense refers to either a single person or members of the same family that live together.

The term ‘family’ includes:

– Couples that are married or living together (regardless of sexual orientation)
– All relatives and half relatives – e.g. grandparents, aunts, step-sisters etc.

Each ‘family’ within a property forms a separate household. 

For example:

3 brothers or sisters living together are one household (not an HMO)

3 friends living together are 3 households (HMO)

2 couples living together are two households (HMO)

1 couples and one single person are two households (HMO)

At present there is not a solid guideline that covers all councils, but our recommendation and practice is to do the following:

  • Organise an inspection of the property to the standards of the local authority
  • Carry out a Fire Safety Risk Assessment and any other certification you know will be needed for the licence application (e.g. gas certificates etc.)
  • Use the reports to outline where the property is not compliant and requires work
  • Organise all work to be carried out by accredited contractors to the appropriate BS standards
  • Apply for the licence using the information from the reports and details of planned works, ensuring no undue liability is taken
  • Wait for the council to process the application and inspect the property to ensure compliance

Why might I inspect the property before the council does?

Many clients ask us why they shouldn’t just wait for the council to inspect and then do any work necessary.

Our advice is that although there is nothing to stop you doing this, it is important to fully understand what you are signing when you apply for a licence.

  • If you sign up as licence holder you are stating that the property you are responsible for is compliant with all relevant legislation. So if you do not know whether your property meets specification, you are opening yourself up to liability.
  • When the council inspects the property, they will give you a basic specification of what is required, and a short deadline to complete it by. This means that you are likely to have to pay a large amount for an accredited company to do it rapidly, or take liability for meeting the standard independently.
The exact requirements will vary per property with a huge number of influencing factors, but here are some basic fire safety standards you may need for your property.

Automatic Fire Detection System (AFD)

A mains wired, interlinked system is a minimum standard under the LACORS guidelines and should be installed and tested by a BAFE accredited company.

Fire doors

Whether fire doors are required depends on the layout of the property, how complex the escape route is and the risk level identified. It would be very unusual to require fire doors on bedrooms in a 3 person shared house, but if a kitchen leads onto the escape route you are likely to require a fire door to the kitchen.

Fire extinguishers and fire blankets

These are required under the LACORS guidelines, and must be correctly installed and tested annually.

Fire Safety Risk Assessment

All HMOs require a Fire Safety Risk assessment under the Regulatory Reform (Fire Safety) Order 2005. They are also required for the common parts of buildings divided into flats.

These can be carried out by the licence holder if they declare themselves a competent person, however it is very important they have a comprehensive understanding of the legislation.

If an accident occurs and the assessment is thought to be insufficient, the Responsible Person can face an unlimited fine or up to two years in prison.

To absolutely prove competence, Fire Risk Assessors should be members of the Institute of Fire Safety Managers, and have completed risk assessment courses accredited by the institute.

To initially apply for the licence you only require:

  • Gas Safety Certificate
  • Floor Plan

However, in order to be issued a licence without conditions you will require some or all of the following:

  • EICR (currently just HMOs but will shortly be all rental property)
  • PAT testing (HMOs only)
  • Fire alarm installation and testing certificates (most properties)
  • Emergency lighting certificate (where emergency lighting is required)
  • Fire Safety Risk Assessment (HMOs only)
  • EPC
  • Management agreement (where the owner is not the licence holder)
By signing as the licence holder, you’re taking on the responsibility of ensuring the relevant fire safety and health and safety standards are being complied with.

The Management of Houses in Multiple Occupation Regulations 2006

Details the responsibilities of the licence holder and tenants. These requirements also apply to Selective licensing under many councils. The legislation puts the responsibility on the licence holder to ensure the property complies with fire safety and health and safety standards.

LACORS fire safety guidance

Published with the support of local government and the Association of Chief Fire Officers, this is the standard used by Local Authorities to determine fire safety measures. Regardless of the type of property, this guidance will help you determine a satisfactory level of fire protection.

Regulatory Reform (Fire Safety) Order 2005 (HMOs only)

The Order applies to almost all buildings, including HMOs. It emphasises risk reduction and fire prevention and requires licence holders to have a detailed fire risk assessment of their properties carried out.

Alongside these, each council will outline their particular expectations from landlords.

(e.g. Hammersmith and Fulham council’s “Standards and Guidance for houses in multiple occupation”)

 

If you let a property that requires a license but doesn’t have one:

  • You cannot evict tenants under section 21
  • Tenants can file for a rent repayment order for up to 12 months rent
  • You can be issued a civil penalty of up to £30,000
  • Following a successful prosecution, you would most likely fail a fit and proper person assessment, making it very difficult to obtain a licence in future. 
This is a common question from clients, as it’s easy to fill out the application, but difficult to work out exactly what’s required. For example if your property is an HMO it will require a Fire Safety Risk Assessment with your application. We can do one for you even if you have already submitted an application.

We also do a “reports only” service for any type of licence- this is where we inspect the property in the same way as the council would and highlight any areas which do not meet legal requirements. This way you are able to get your property up to scratch in a sensible timeframe, without the costs associated with having to work to a tight deadline.

Even though your property is managed, the owner of the property is responsible for applying for a licence unless the agent has agreed to be the licence holder.
If agents are deemed to be a “rent receiver” or “manager” of an unlicensed property, or a property in breach of the 2006 HMO management regulations, they can face prosecution along with the landlord.

A ‘rent receiver’ is the party that gets the money from tenants in the first instance, which is typically estate agents when it comes to managed properties.

This is a complicated section of the law and agents should seek legal advice if in any doubt.

If agents are deemed to be a “rent receiver” or “manager” of an unlicensed property, or a property in breach of the 2006 HMO management regulations, they can face prosecution along with the landlord.

A ‘rent receiver’ is the party that gets the money from tenants in the first instance, which is typically estate agents when it comes to managed properties.

This is a complicated section of the law and agents should seek legal advice if in any doubt.

No.

However, it is a good idea to get organised with all required documentation to ensure you can apply as soon as tenants move in.

Types of licence:

Mandatory HMO licensing became law in 2006 following a fatal flat fire in Glasgow. Two students became trapped in their basement flat that had a disconnected smoke alarm, iron bars on the window and a blocked fire exit.

Research at the time showed that you were 16 times more likely to die in a fire in a 3 storey (or more) HMO than in a family home, so properties of 3 or more stories were the first to require licensing.

Additional licensing schemes tend to be brought into areas where there has been a significant change in housing occupation from families to sharers, London being a prime example with it’s growing young professional population. The main driver is to ensure fire safety standards are improved in line with the extra risks involved in shared housing.
Selective licensing schemes tend to be brought in where there have been complaints over standards of accommodation, anti social behaviour, or issues with rubbish disposal. Properties over commercial premises are often included. They are roads or areas specifically chosen by the council for licensing. 

I’m an overseas landlord – what do I need to know?

The holder of a property licence must be based in the U.K. This is because one of the expectations of licence holders is to regularly visit the property to do necessary checks and maintenance to ensure it meets the 2006 HMO Management regulations, and the 2005 Fire Safety Order for the entirety of the licence scheme
Any UK-based individual, company or charity can hold your licence. Therefore a family member, friend, or your managing agent (if applicable) can theoretically be the licence holder, however all parties must understand their legal responsibilities.

We offer a licence holding service at a rate of £49 per month, providing we have been able to inspect the property, and have agreed that it meets the required specification.

By taking on the licence an individual is stating legally that the property is compliant and takes responsibly to ensure that it will continue to meet the requirements for the entire course of the licensing scheme.

The licence holder is therefore liable to penalties if the property is found to be in breach of legislation during its initial council inspection or during any visit for the length of the scheme (e.g. following a complaint from a tenant). Currently, a breach of any conditions of the licence is £5,00 per individual condition, but this is set to become an unlimited fine.

For this reason, agents and friends are often reluctant to take on responsibility for holding a licence.

If you need any further advice or would like a quote for holding your licence please get in touch.

How can HMO Services London help?

We provide a start-to-finish service helping London’s landlords comply with new property legislation. We ensure that our client’s properties meet the required level of fire safety and living standards and provide a hassle-free alternative to lengthy licence applications.

To our knowledge we are the only company to provide a comprehensive property licensing management service across all London boroughs.

We can help with any element of your property licensing journey.

  • Full service licence applications
  • Fire Safety Risk Assessments
  • Health and safety and living standards reports
  • Licence holding services for overseas landlords
  • Accredited building works to council specification
  • Certification and paperwork e.g. PAT testing, floor plans, EICRs, etc.

If you need help or advice, please don’t hesitate to get in touch.