This is something to consider urgently if you are a landlord, you are considering buying to let, or even of buying with friends.
In a nutshell, a property is defined as an HMO if it is of a certain size and has a certain number of people living there who share certain facilities and form more than one household.
GOV.UK suggests an HMO is rented to five or more people from more than one household, the property is at least three storeys high and tenants share toilets, a bathroom or kitchen.
The site then points out that smaller properties with fewer tenants may also be classed as HMOs. Councils interpret the regulations differently so you must check with them.
Why is this important?
If your property is classed an HMO you, as the landlord or owner, must get a licence from the local authority.
There are various conditions attached to this being granted, including health & safety requirements, the suitability of the property, and your suitability as a landlord or manager.
Fees are charged for licences and there are checks and paperwork to complete each year, so it is a good idea to build these costs into your financial plan.
Remember, if you break the law on HMOs you could be fined up to £20,000, so if you are in any doubt about where you stand, speak to the local authority or to a property lawyer.