A Briefing on House in Multiple Occupation (HMO) Property in Scotland

History

The House in Multiple Occupation (HMO) regulations were first introduced in Scotland in 2006 to address tenant safety, over-crowding and low standards in private rental accommodation. Initially the framework was discretionary for individual local authorities, but in 2011 it became compulsory for them to manage HMOs in their area.

What is a house in multiple occupation (HMO)

An HMO is an accommodation occupied by three or more people from more than two family units. A family unit includes couples as well as relatives such as parents, grandparents, children (and step-children), grand-children, brothers, sisters, uncles, aunts, nephews and nieces. The vast majority of HMO licensed properties are shared houses or flats, but larger purpose-build accommodation, such a student halls, also require a licence. Houses with bedsits which have shared facilities, such as kitchens and bathrooms, are also considered a house of multiple occupation in Scotland.

Obtaining a HMO licence

A licence application must be made to the relevant local authority, who each set their own fees. In Glasgow, it typically takes six to twelve months to process an application and the fee is around £2000. The applicant may be required to attend a local council committee hearing.

After three years a renewal application must be made, and another fee (currently around £1000) paid. The licence must be in the name of the property owner. The council will run a “fit and proper person” test on the applicant and a member of the local authority’s staff will be tasked with inspecting the property as the property must meet certain standards.

If the ownership of an HMO property changes, the new owner can continue renting the property but must make an application to become the new licence holder within a month of the change of ownership.

Standards

The Scottish Government has published statutory Guidance which has detailed information on the standards which must be met. In general, the standards are stricter than for regular rental properties. For example, smoke detectors are required in all bedrooms in addition to lounges and hallways. There is also a requirement for fire fighting equipment and for regular fire alarm checks. Fire doors must be fitted internally.

Gas safety checks are required annually, and carbon monoxide detectors must be fitted in all rooms with a combustion device, unless it is used solely for cooking. The electrical installation must be checked every five years and the appliances tested every year.

The guidance also has standards for minimum room sizes of bedrooms, living rooms and kitchens, which vary with the number of planned occupants.

Enforcement and Fines

It is a criminal offence to operate a HMO without a licence. Compliance with HMO regulation is strictly enforced. Property owners who operate an unlicensed HMO or non-compliant HMOs could be fined up to £50,000. Council’s also have the power to revoke a licence if the living accommodation or licence holder are no longer suitable to meet the conditions of the licence. Prior to granting a licence the local authority must be satisfied that the premises are suitable for use as an HMO, therefore the property will be inspected. Recommendations for improvement of the property to make it compliant will usually be put forward. Please note that a further inspection will be carried out at each licence renewal.

Penalties will be applied for late renewal applications and for breaches of licensing conditions.

If you’d like advice about your legal obligations as a landlord in Scotland, we’d be happy to help. Contact us about our services for landlords today.