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Five week countdown: the mandatory HMO licensing rules change on 1 October 2018. Are you ready?

Monday, August 27, 2018

With just five weeks to go until the mandatory HMO licensing rules change across England, London Property Licensing is publishing the second of six weekly updates to raise awareness of the new licensing requirements and help landlords to prepare.

On 1 October 2018, the mandatory HMO licensing scheme is being extended to most Houses in Multiple Occupation (HMOs) that are occupied by five or more people and where there is some sharing of facilities, regardless of the number of storeys. The scheme was previously restricted to properties that were three or more storeys in height.

Understanding the notification requirements

In this second article, we explore the requirement to notify all interested parties that a mandatory HMO licence application is being submitted. Linked to this, the landlord must ensure they have consent to let their property as a licensed HMO.

For landlords who own the freehold, have no outstanding mortgage and where there are no other interested parties, the application process will be more straight-forward. For everyone else, we would encourage you to read on and find out more. 

Landlords who have a leasehold interest in the property must notify the freeholder that a licence application is being submitted. It is important to check the terms of the lease to ensure that this mode of occupation is permitted and that permission to let has been obtained. Whilst some freeholders may grant permission for a single family let, you need to check if they permit use as a licensed HMO. Whilst this is unlikely to stop the licence application being approved, it could result in a leasehold dispute that is far more costly to resolve.

Landlords who have a mortgage on the property must notify their lender that a licence application is being submitted. It is vital to ensure you have consent to let the property as a licensed HMO to avoid breaching the terms of your mortgage. Whilst some Buy to Let mortgage providers might grant permission for the property to be occupied by a group of friends on a single tenancy, that consent may be withdrawn if the property becomes a licensed HMO. Each and every lender adopts a different approach. If unsure, you may want to seek advice from a mortgage broker.  

The requirement to notify interested parties extends to the managing agent (if any), joint owners and anyone else with an interest in the property.

Anyone hoping to apply for a licence without the freeholder or mortgage lender finding out may be in for a shock as licensing involves a three step notification process:

  • Step 1: the applicant must sign a declaration on the form to say they have notified all interested parties that an application is being submitted.
  • Step 2: the local authority is required to send a copy of the draft licence to all interested parties and invite their comments before they approve or refuse the application.
  • Step 3: the local authority is required to send a copy of the licence approval or refusal decision to all interested parties.

As part of our licence application handling service, London Property Licensing prepares notification forms for the applicant.

Lambeth and Camden Councils are taking steps to get the message out

To help raise awareness about changes to mandatory HMO licensing, Lambeth Council have update the information on their website, issued a press release and will be displaying posters at prominent locations around the borough.

Lambeth Council HMO licensing poster 2018
 
Cllr Paul Gadsby, Lambeth Cabinet Member for Housing said:

We have a huge number of residents living in private rented accommodation in the borough and it is essential that we as a council protect them from rogue landlords providing dodgy accommodation to make a quick buck. The HMO licensing scheme is part of this process and landlords should ensure they are properly licenced.

Camden Council have told us they will soon be issuing a landlord newsletter to raise awareness. They have also said all landlords with an additional HMO licence that meet the new criteria will automatically be passported into the mandatory HMO licence scheme.

How to find out more

The London Property Licensing website contains a free guide to the property licensing schemes in every London Borough. Simply click on ‘Select borough’ at the top right of the page to check the rules in your borough.

A free guide to mandatory HMO licensing which is relevant to landlords and letting agents across England and can be found here.

A number of events are being held in September where landlords can find out more about the changes to mandatory HMO licensing. Details can be found in our London events guide here.

Need help? Several companies that offer a licence application handling service in the London area can be found in our Landlord Suppliers Directory here. With demand running at a high level, anyone wanting applications prepared before 1 October is urged to act now to avoid disappointment. The directory also contains mortgage advisors and solictors than can assist with any queries.

This is the second in a series of six weekly updates that are being published to help explain the changes to mandatory HMO licensing that come into force on 1 October 2018.

For all the latest news and events, you can sign up for the free London Property Licensing newsletter here

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