Once a property has been identified as a HMO and falls within a licensing scheme, Section 63 of the Housing Act 2004 dictates that it must have a HMO licence. Applications for a licence must be made via the local authority.
It’s an offence for an owner to let their property as a HMO in a licensed area if they haven’t first obtained a licence, and it can carry a fine of up to £20,000. In addition, they may be required to repay up to 12 months rent collected during the time in which the property was unlicensed.
Section 64 of the Housing Act 2004 states that a licence may be granted to the owner of the property (or another person if both the owner and this other person agree), but it must be the “person having control” of the property, which is defined as the person who receives the rack-rent of the premises. They must also be deemed a ‘fit and proper person’.
In the case of Section 257 HMOs (as defined on our ‘What is a HMO?’ page) where one owner owns the entire block of flats, only one licence application is required. Where there is more than one owner, each individual owner will be required to make a separate application.
The local authority may refuse to grant a HMO licence to the proposed holder if they deem that they’re not a ‘fit and proper person’. They must be satisfied that the owner has not;
To aid the local authority in making their decision, the person applying to be the licence holder must provide a Criminal Records Bureau (CRB) certificate dated within the last 12 months when making their application. Alternatively, if the applicant doesn’t hold a recent CRB certificate, they may apply for a criminal conviction certificate from Disclosure Scotland, which can be completed online.
As well as the name of the licence holder, every HMO licence must state the name of the property manager. The manager is the person(s) or company (such as a letting agent) who receives the payment of rent from the tenant(s). They may also handle any maintenance-related issues and deal with queries or requests from the tenant(s).
The local authority may issue the licence in the property manager’s name if it’s agreed that the usual licence holder would be ineffective in carrying out the management duties that come with every HMO licence (such as owners based overseas), or if they fall foul of the ‘fit and proper person’ requirement explained above. For more information on HMO management duties, please visit our HMO management section.
Before granting a HMO licence, the local authority will carry out an inspection of the property in order to ensure it meets the required standards. If any work is required to bring the property up to the correct standard, both the licence holder and property manager will be told exactly what needs to be done.
Assuming they don’t identify any severe health and safety risks, the local authority may grant the licence on the condition that the aforementioned work is carried out. Failure to comply with these conditions is deemed an offence and can lead to a fine if convicted.
During their visit, the local authority will also decide on the maximum number of occupants the property is suitable for, which must not be exceeded. Again, in stating the maximum number, the local authority may grant the licence on the condition that certain work is completed to make the property suitable for that number.
If the conditions aren’t met, or if the property is let out to more than the maximum number of occupants stated on the licence, it’s considered an offence and can lead to a fine if convicted.
Local authorities are allowed to dictate the fees they charge for processing HMO licence applications. There are currently two licensing schemes in place in Cardiff (more information can be found on these in our HMO licensing schemes’ section) and the charges are;
HMO Shared House or single flat up to 4 bedrooms
HMO Shared House or single flat (5-9 bedrooms)
On top of that, there’s an additional charge per flat;
New owner of already fully-compliant property
This is where a licence is effectively being “transferred” from the previous owner to the new owner for the remaining term of the licence. Providing the property is fully compliant with licensing standards;