introducing steve mears – independent financial advisor the money man
Houses of Multiple Occupation (HMOs)
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A lot of clients buying at auction, are looking to set up the property as an HMO, as the rental is often more attractive. With the help of one of our legal advisers, we have listed some information, which we hope you will find useful. HMO stands for houses in multiple occupation or houses of
” “ …HMOs often require even more hard work than typical rental properties… By failing to issue tenants with contracts, landlords are setting themselves up for problems in the future. Obtain a deposit from your tenant and protect it in a Government backed scheme. Check your property is compliant with health and safety regulations – when letting a HMO the Health and Safety Regulations are more stringent than a with a single residential let. For example, you must make sure that there are sufficient means of escape and that both the boiler and electrics have been serviced but you will need to have a notice in a prominent position in the building with your name, address, and telephone number for tenants to contact you. While this may sound extreme, by failing to meet this requirement you may be at risk of a fine up to £5,000. If you are purchasing a HMO, our team can not only deal with the purchase of the property but can advise you as to the relevant rules and regulation affecting HMOs so that you do not find yourself in breach of the rules and liable to a fine.
multiple occupancy. This kind of let involves three or more tenants who are not a family and so there are shared facilities such as bathrooms and kitchens in the property. For many, HMOs could be an attractive option when investing in property because of the potential of higher yields. With so many legal factors to consider, HMOs often require even more hard work and dedication than typical rental properties do. There are a number of challenges involved in managing this type of property, and the growth in licensing and regulations over recent years often leaves new landlords in particular in a state of confusion. So, what do you need to do? Contact the Local Authority – Landlords often require licences for HMO properties however, this will depend on the type of property and number of residents. You must also ascertain whether planning permission will be required as in some areas the local authority will have excluded HMOs from being classified as permitted development. Speak to a mortgage advisor (that’s us!) – There are special HMO rates with a number of lenders now, and criteria is often different to ‘normal’ buy to let loans. You must check that using your property as a HMO is not classified as a restricted use. Draw up a Tenancy Agreement – All agreements need to be assured shorthold tenancies and while tenants can request a short term, the landlord must offer a minimum of six months fixed term. If the tenant wants to leave they must give the landlord one month’s notice but if the landlord wants the tenant to leave then they must give two months’ notice or serve a Section 21 Notice.
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Please remember YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE .
to contact Steve, email info@stevemears.com , telephone 0117 973 4300 or to find out more about Steve Mears Independent, visit www.stevemears.com
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