6 Tips for HMO Landlords
Posted on 19th June 2018 at 09:59
Are you thinking about taking on a HMO or converting a property into a HMO? Here are 6 usefull tips that will help you to get started and ensure things run smoothly.
Obtain or renew your HMO licence
If a licence is required, be sure to obtain one before letting any rooms in your HMO. The local housing authority will carry out an inspection before granting (or refusing to grant) a licence. A fee will be payable. Licences usually last 5 years. A criminal offence is committed if a landlord does not have a licence for a HMO that should have a licence. A fine of up to £20,000 can be imposed. It is also an offence to allow overcrowding or to breach a condition of the licence.
All HMO properties must comply with the management regulations
Even if your property doesn’t require a license, you must still comply with The Management of Houses in Multiple Occupation Regulations 2006. They mostly require landlords to make sure properties are safe, maintain services and dispose of rubbish properly. There can be heavy penalties if you’re found to be breaching these regulations.
Obtain specialist insurance
Insurance is essential to protect your investment, but many insurers do not offer policies for HMOs as they are perceived to be higher risk. As with mortgage products, landlords need to shop around or use a broker.
Ensure that your insurance covers the buildings, any landlord’s contents and loss of rent if the property is damaged or destroyed.
An HMO isn’t a type of tenancy
Whether your property is an HMO or not will depend upon whether it comes within the definition of an HMO. It is not based on the tenancy or occupation type.
Monitor safety & maintenance
Landlords need to carry out regular inspections of the HMO to keep the safety and maintenance issues above under review. If tenants report faults, the landlord should respond promptly. You can hire a letting agent to do this for you, usually for a small percentage of the monthly rent. Landlords must:
• Provide the landlord’s contact details to the occupiers and displaying them in a prominent place in the property
• Take fire safety and other safety measures
• Ensure a supply of water and drainage
• Maintain a supply of gas and electricity and testing gas appliances annually and electrical installations every 5 years
• Maintain common parts, fixtures, fittings and appliances
• Make sure living accommodation is clean at the start of a tenancy
• Provide waste disposal facilities.
Keep detailed records
Make sure you keep a written record of any inspections, correspondence and conversations with tenants. This will provide evidence of your actions in the case of a future dispute.
Also keep detailed financial records. These will be essential when it comes to filling in your tax return.
If you are investing in an HMO and are worried about meeting regulations, or if you are looking for an agent to manage your properties, contact Amber Properties today.
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