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In the UK, landlords must have a license to rent out their properties; otherwise, they may face fines or prosecution.

In the UK, if you want to rent out your property, there are certain situations where you need to obtain a license, also known as a rental license or rental permit. Generally, there are several scenarios:

  1. House in Multiple Occupation (HMO) License: This applies to      properties rented out to multiple tenants who form separate households.      HMO licenses can be further categorized as either mandatory or      additional/selective licensing.

  2. Certain property types or areas without restrictions: In some      cases, there are no specific licensing requirements for renting out      certain types of properties or in specific areas. However, this needs to      be evaluated on a case-by-case basis.

  3. Landlord's legal agreement with agents or intermediaries: It is      generally necessary for landlords to have a legal agreement with agents or      intermediaries. Subletting without a valid agreement with the landlord is      typically considered illegal, unless there is a contract in place.

 




Classification of rental property licenses is as follows:

  1. House in Multiple Occupation License (HMO)

What is an HMO rental property license?

An HMO rental property license, also known as a House in Multiple Occupation license, refers to a situation where each room within a house is rented out to different tenants, with a minimum of three individuals sharing the property. In such cases, landlords are required to inquire with the local council to determine whether an HMO rental property license needs to be obtained. For example, if a house has three bedrooms and each is rented to three different individuals who are not members of the same household, they would need to share common areas such as the living room, kitchen, and garden.

It is important to note that the HMO rental property license discussed in this article primarily applies to England and Wales (please be aware that specific regulations for HMOs in Scotland and Northern Ireland may differ). Furthermore, the requirements may vary depending on the specific circumstances

  1. Small HMO: Refers to a shared rental property with a relatively      small number of occupants or a smaller-sized property, or a property      situated in a specific geographical location. For example, if there are      around three tenants or the property is exceptionally small, but due to      factors such as the geographical location or the shape of the property, it      is necessary to consult the local council. If, after inspection, the      council requires the landlord to obtain an HMO rental property license,      the landlord must apply for one.

  2. Large HMO: Refers to a shared rental property with a relatively      high number of occupants. This includes situations where: (1) Five or more      tenants (who are not members of the same family) reside in the property,      (2) There are shared facilities such as a kitchen and bathrooms, and (3) At      least one tenant pays rent (or has it paid on their behalf by an      employer). In the case of large HMOs, it is mandatory to apply for an HMO      rental property license.

 

Note:

  1. The maximum validity period for an HMO license is 5 years.      Remember to renew your HMO license before it expires to avoid penalties if      discovered without a valid license.

  2. The HMO rental property license can be applied for by the      landlord themselves, or by agents or authorized intermediaries (provided      they meet the qualifications).

  3. The council charges a certain application fee for the HMO      license. The price is approximately £140 per year, but this price is subject      to change at any time, and the specific fees may vary in different areas.      The mentioned price of £140 per year in this article is only provided as a      reference point.

 



To successfully obtain an HMO license, the following requirements must be met:

  1. The occupancy of the property must be appropriate (meaning the      size, area, and facilities of the property should be suitable for a      certain number of occupants, rather than overcrowding, such as having 10      people in a property with only 3 rooms).

  2. The landlord, agents, or intermediaries must meet certain criteria      (for example, they should have no criminal records and should not have      violated any relevant laws or codes of conduct).

  3. Provide the council committee with an up-to-date gas safety      certificate annually.

  4. Install and maintain smoke alarms.

  5. When requested by the council, provide safety certificates for      all electrical appliances.

 



Note:

  1. When granting an HMO license, the council may impose additional      conditions on the license, such as requiring improvements to the      property's facilities. The council will inform you of any conditions when      you apply. If you disagree with any of the conditions set by the council,      you have the right to appeal.

  2. Renting out an HMO property without obtaining the required      license can result in unlimited fines. "Unlimited fines" refers to      fines without a predetermined upper limit, and the actual amount of the      fine will depend on the specific circumstances. Serious violations may      lead to prosecution and a criminal record.

  3. Before renting out a property, it is advisable to consult the      council to determine whether your property falls under the category that      requires an HMO license. Additionally, inquire about the timeline, fees,      required documentation, tasks to be completed, and any post-application      considerations. Being prepared in advance will help you be ready for any      requirements that may arise.

 




2、Selective licensing


What is Selective Licensing?

 

Selective licensing refers to the government's selective requirement for certain areas or properties to obtain a license. It means that not all properties are required to obtain a license, but only those designated by the government.

 

Which properties require Selective Licensing?

 

In general, there are no specific and unchanging rules regarding which properties require Selective Licensing. The decision is made by the council based on the specific circumstances at that time. For example, properties in areas with high crime rates may be designated as requiring Selective Licensing, meaning they must obtain the license before being rented out. Failure to comply may result in significant fines and other penalties.

 

As shown in the diagram below, properties that generally require Selective Licensing are:


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For more information about Selective Licensing, you can refer to the detailed PDF document. Here is the PDF link:


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/418551/150327_Guidance_on_selective_licensing_applications_FINAL_updated_isbn.pdf


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So, which types of properties generally do not require Selective Licensing? As shown in the diagram below:

  1. Holiday rentals

  2. Commercial premises

  3. Student dormitories (owned/managed by universities)

  4. Properties where the tenants are family members

 


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Note: The considerations for Selective Licensing are similar to those for HMO licensing mentioned earlier. The license is also valid for 5 years and needs to be renewed in advance before it expires. The landlord can apply for the license themselves, or they can delegate the application to an authorized agent or intermediary. Renting out a property that requires the license without obtaining it can lead to fines and potential prosecution. In general, the maximum fine for a single offense under Selective Licensing can reach up to £30,000.

 

How to apply for an HMO rental property license and Selective Licensing? You can directly apply through the council. Whether it's for HMO or Selective Licensing, if you plan to rent out your property in the UK, it is advisable to consult the council in advance to determine if these two licenses are required or if any additional rental property licenses or documents need to be obtained. Also, clarify any specific requirements or considerations.

 

Alternatively, you can download the application form online and fill it out. Here is the application form link (note that the form may vary and is subject to change, so it's best to refer to the specific form provided by your local council)


https://www.gov.uk/government/publications/form-hmo-applications-relating-to-licensing-of-houses-in-multiple-occupation-hmos-and-selective-licensing

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Note: Generally, renting to the same family may not require an rental license. However, this also depends on the specific circumstances. For example, if the property's location or other conditions happen to fall under Selective Licensing requirements, then the property would need to obtain a Selective Licensing. Specifically, dedicated student accommodations may not require a license, but there are additional criteria that need to be met. Renting out a property exclusively to students does not automatically classify it as a student accommodation.

 

Ten Liters Miao has a friend who has been in the UK for a long time and spent a year discussing property investment and rental issues everywhere. As a result, he had the idea to embark on his journey as a landlord in the UK. Initially, he lived in a studio apartment, but later purchased multiple properties in the UK for investment purposes. This form of renting is known as "buy to let," which involves buying properties specifically for rental purposes. Through my inquiries with this friend, I learned that his property purchases were primarily based on proximity to schools, a higher concentration of Chinese residents, relatively safe areas, and nearby amenities such as supermarkets. Essentially, he purchased properties in one location, with a small dispersed range, and entrusted a professional agency to manage them. However, he also went through a learning process initially and then handed over full responsibility to the professional leasing agency. He even sought the assistance of a lawyer to mitigate unnecessary risks, among other things.

 

If you also aspire to become a landlord in the UK, you can refer to the landlord and tenant guides on the official website of the UK government. Here is the link:


https://www.gov.uk/browse/housing-local-services/landlords

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英国住宅房东协会:https://www.nrla.org.uk/


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