An article in the Evening Standard of 18 September 2018 reported on the conviction of landlords letting out rooms to multiple tenants in properties which were in squalid condition. Although not covered in the article, one has to question whether there were licences for Houses in Multiple Occupation (HMOs) in place.
Investors in properties being operated as HMOs must be conscious of the extension of mandatory licensing to regulate HMOs. With effect from 1 October 2018, the minimum number of 3 storeys will be removed as a factor for mandatory licensing by local housing authorities so that local housing authorities will have a duty to licence all HMOs occupied by 5 or more persons not forming a single household irrespective of the number of storeys which the property has and where the property satisfies either a "standard test"; a "converted building test" or a "self-contained flat test". What are known as Section 257 HMOs are also not subject to HMO mandatory licensing.
Having established that a property is an HMO to which mandatory licensing applies, the party who has control of or manages the HMO must have a licence from the local housing authority. A licence will be granted for a maximum period of 5 years and is not capable of being transferred to a purchaser who should therefore contact the local housing authority to see whether an HMO licence will be granted to the purchaser prior to the completion of the sale. It may be possible to make the sale and purchase contract conditional on this.
It is a criminal offence to manage or have control of an HMO to which licensing applies but which is not so licensed. The landlords convicted in relation to the properties in North London are awaiting sentencing.