Mandatory licensing applies to HMOs with 5 or more tenants across 3 or more storeys and 2 or more households. Local authorities can implement additional licensing for all HMOs in a designated area if many are poorly managed. Selective licensing allows licensing for all private rented properties in an area with over 19% private rental sector occupancy. To obtain an HMO license, landlords must submit an application, pay a fee, and the license lasts up to 5 years for a specified property. The local authority will assess the property's suitability and landlord's management abilities and impose mandatory and discretionary license conditions. It is a criminal offence to operate an HMO without a license.

1. Houses in Multiple Occupation
(HMO)
Mandatory Licensing
Principles of Lettings Online

2. Mandatory Licensing
The 5-3-2 Rule
Property must have a license
if…..
• 5 or more tenants and
• 3 or more storeys and;
• 2 or more households
• Buildings comprising only self
contained flats are exempt
from mandatory licensing
* A combination of
self contained &
non self contained
accommodation will
count as if all are
non- self contained

3. Additional Licensing
• Power for local authority to impose licensing of all
HMO’s (not just those that meet the mandatory 5-
3-2 rule)
• May be in just a designated area, or the whole
borough
• Available if significant proportion of HMOs are
poorly managed and causing problems for
residents (S56 Housing Act 04)
• Requires 10 week consultation period (and may
require approval from Secretary of State)

4. Selective Licensing
• Power for local authority to impose licensing of all
Private Rented properties (not just HMOs!)
• May be in just a designated area, or the whole
borough
• Area must have a high proportion of PRS (greater
than 19%)
• Requirement for Secretary of State approval is
more likely and consultation period will again be
required

5. How to Obtain
a License
• Submit Application -
• Pay a fee – This will vary for each
Local Authority
• 5yrs – Maximum amount of time
that license will last for
• License applies to the specified
property in the application – it is
non-transferable

6. How to Obtain
a License
• Suitability of Property – Local Authority
may stipulate what amenities such as
bathroom/kitchens need to be provided
• Suitability of Persons and Management
Arrangements – Local Authority decides if
landlord is a ‘fit and proper’ person
• Mandatory conditions are set (such as
requirement for gas cert, tenancy
agreement) and discretionary conditions
(such as certain repairs must be done, or
landlord to attend training course)

7. Offences and
Enforcement
• Criminal offence to be a person
having control of or managing
a licensable HMO without a
licence
• Unable to use S21
• Local authority or occupier can
apply for a Rent Repayment
Order (up to 12 months rent
repaid)