HMO Licensing in Cardiff
At Key Executive Sales, we deal with lots of clients wanting to buy and sell HMO approved properties. Some clients are used to the process and know the regulations inside out, whereas others are new to the game and need further detailed advice. We are always happy to help and are only a phone call or an email away. However, we know time is precious, so we have compiled a brief overview of what HMO Licensing involves.
Most shared student houses in Cardiff are deemed as Houses of Multiple Occupation (HMOs) and have additional licensing, safety and amenity standards. These standards are upheld and enforced by Shared Regulatory Services (SRS) and ensure minimum requirements are met for bathroom and kitchen facilities, room sizes and fire protection and security.
A HMO is legally defined in sections 254-259 of the Housing Act 2004, as being a building, or part of a building, such as a flat, that:
- is occupied by more than one household and where the occupants share, lack, or must leave their front door to use an amenity such as a bathroom, toilet or cooking facilities
- is occupied by more than one household in a converted building where not all the flats are self-contained. “Self-contained” means that all amenities such as kitchen, bathroom and WC are behind the entrance door to the flat
- is a converted block of self-contained flats but does not meet the requirements of the Building Regulations 1991, and less than two thirds of the flats are owner occupied.
In Cardiff, the Additional Licensing Scheme has extended the meaning of HMO to cover most rental property in the Cathays and Plasnewydd areas (see Additional Licensing below).
What is the purpose of HMO Licensing?
All HMOs are legally required to be licensed under the Housing Act 2004 as mentioned previously, which aims to improve housing standards for tenants renting in the private sector and ensure it is safe for occupants, and that the Landlord is competent, qualified and the most appropriate person to manage it.
In addition to License conditions, Cardiff Council will also look for issues relating to health and safety within HMOs in line with the Housing Health and Safety Rating System (HHSRS) which is the government’s approach to evaluating potential risks of housing conditions on health. A total of 29 categories of housing hazards are assessed under the system with each hazard having a weighting which helps determine whether the property is rated as having category 1 (serious) or category 2 (other) hazards. Following such assessment of the property, appropriate action will be taken to ensure landlords address any hazards identified.
To hold the license, the Landlord must be ‘fit and proper,’ with the local Council taking into account any criminal convictions that the Landlord may have. Failure to satisfy the Council that a person is ‘fit and proper’ could result in the refusal to grant the License.
What properties need a licence?
There are two types of Licence that relate to different HMO property types and different areas of Cardiff:
- Mandatory – Applicable to the whole of Cardiff
- Additional Licensing Scheme – Applicable to Cathays and Plasnewydd only
A Mandatory HMO License applies to properties that have three storeys or more and five or more occupants who do not form a single household. In general terms, a ‘household’ is described as a family (including co-habiting and same-sex couples, or other relationships such as fostering, caregivers and domestic staff). Parents, grandparents, child, step-child, grandchild, brother, sister, uncle, aunt, nephew, niece, cousin and ‘a relationship of the half-blood shall be treated as a relationship of the whole blood’ are also considered as a family household. Any unrelated tenants sharing a property are considered a single household.
These guidelines apply across the entirety of Cardiff and can include shared houses and houses split into bedsits, or a mixture of flats and bedsits. The following property types are classed as HMOs for Mandatory Licensing purposes:
- An entire house or flat which is let to five or more tenants who form two or more households and share a kitchen, bathroom or toilet facilities
- A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to five or more tenants who form two or more households and share a kitchen, bathroom or toilet facilities
- A converted house which contains one or more flats which are not entirely self-contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by five or more tenants who form two or more households
- In order to be a HMO, the property must be used as the only or main residence of the tenants and it should be used solely or mainly to house tenants. Properties let to students will be treated as their only or main residence.
Additional Licensing Scheme – Cathays and Plasnewydd
Cardiff Council have declared two areas within Cardiff as Additional Licensing Schemes: Cathays (as of July 2010) and Plasnewydd (as of January 2016). The Scheme extends the scope of Licensing to cover most rented property with three or more occupiers who form two or more households regardless of how many storeys the property has. Each Scheme runs for a period of five years and at the end of which, the Council will be required to re-declare the Additional Licensing Scheme.
Additional Licensing applies to the Cathays area and Plasnewydd area and can include shared houses and houses split into bedsits, or a mixture of flats and bedsits. Additional Licensing does not apply to or affect properties that are licensable under the Mandatory Licensing Scheme above and does not include owner occupiers with up to two tenants living in their property.
The following property types are classed as HMOs under the Additional Licensing Scheme:
- An entire house or flat which is let to three or more tenants who form two or more households and who share a kitchen, bathroom or toilet facilities
- A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to three or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities
- A converted house which contains one or more flats which are not entirely self-contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by three or more tenants who form two or more households.
- A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.
In order to be a HMO, the property must be used as the only or main residence of the tenants and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence.
Councils have a number of enforcement options available for non-compliance and failure to make an application for a License.
If a managing Agent or Landlord fails to make an application or submits part of an application and then fails to provide all relevant documentation, they could face prosecution for failure to license a property, which has an unlimited maximum fine. If prosecuted and convicted, the Landlord could face a Rent Repayment Order which enables tenants of the unlicensed property to apply to the Residential Property Tribunal (RPT) for up to 12 months of their rent back, whilst the property was unlicensed.
The Licence will also contain conditions relating to the ongoing management of the HMO and subsequent consequences for failure to comply. Again, this could lead to prosecution and an unlimited fine. Inspections are carried out at the property where Officers will look for any hazards under the Housing Health and Safety Rating System. If any works are required, the Officer may write to the landlord to give them an opportunity to rectify the defect. The Officers can also serve an Improvement Notice setting out the works to be carried out and the timescale for completion. For serious matters, Officers may serve a Prohibition Order which restricts part or all of the premises.
HMOs are highly regulated properties, but once done correctly, they can be serious income earners. Key Executive Sales conduct full due diligence when it comes to obtaining the relevant Licences for our properties and we will always be transparent and honest. If your property is missing a license, we will assist you with the application process and provide you with the support you need as we understand it can be tricky and time consuming especially if you’re new to the investment world!
We are deeply involved in the HMO industry in Cardiff, particularly Cathays and have successfully sold in excess of 45 houses of multiple occupation in recent years.
Upon successful purchase of a HMO, our sister branches, Keylet Executive and Keylet Cathays will also be able to assist in finding tenants for you and help manage your property should you wish.
You can contact us on the following:
Key Executive Sales: 02920 489 000 / firstname.lastname@example.org
Keylet Executive: 02920 489 000 / email@example.com
Keylet Cathays: 02920 388 399 / firstname.lastname@example.org
Published: April 29, 2021BACK TO NEWS LIST