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HOUSES IN MULTIPLE OCCUPATION: A GUIDE FOR LANDLORDS
PART 1: WHO NEEDS A LICENCE?
The Civic Government (Scotland) Act 1982 sets out a general system for licensing a range of activities.
The detailed arrangements for HMO licensing are contained in the Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000 (as amended in 2002 and 2003)
If you are not sure whether you need an HMO licence for your property, you should contact the local authority for advice. It is a criminal offence to operate an HMO without a licence.
Who needs a licence?
A person needs a licence if they give permission for a house to be occupied as an HMO, ie if they allow people to live in the property in line with the definition below. The need for a licence does not depend on rent being paid, or on any formal tenancy arrangements being in place.
The application for a licence must be made by the owner, even if the property is leased to or managed by another person or organisation.
What is the definition of an HMO?
A house is an HMO if it is the only or principal residence of three or more qualifying persons from three or more families.
In this context, " house" includes any building, or any part of a building occupied as a separate dwelling. The legislation covers not only ordinary shared houses or flats and bedsits, but all residential accommodation, including hostels, student halls of residence, staff accommodation in hotels or hospitals, and so on.
Separate units within a building which share use of a toilet, personal washing facilities or cooking facilities, are taken to form part of a single house. For example, a house with six rooms which each have their own en-suite bathroom, but share a kitchen, would be treated as one HMO with six occupants.
The law does not define " principal residence". The Order only specifies that a student's term-time residence is to be taken as their principal residence, and that a hospital is not the principal residence of patients. It is generally agreed that principal residence is not simply a matter of the number of days spent at an address, but that it depends on the "quality of occupation". Even a hostel where people stay for only a few months may be their principal residence for that period.
Where an owner of a house lives there and lets out rooms, or shares with friends, the owner is not counted as a " qualifying person", nor are any members of their family that live with them. An owner is any person who has a heritable right of ownership in the property. This usually means they are named on the title deeds. It does not matter how small their share of ownership may be.
Two people are members of the same family if:
- they are married, or live together as if they were married (including same-sex couples)
- one is the other's parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece. This also includes relationships by marriage or by half-blood, and children who are fostered, adopted or otherwise brought up as a member of the family.
Are there any exemptions from licensing?
There are four main classes of property that are exempt from the HMO licensing scheme.
- Properties where all the occupants (or at least one member of each family) are owners.
- Properties owned by communal groups, established as a co-operative housing association, the management of which is undertaken by general meeting.
- Properties occupied by members of a religious order.
- Accommodation provided as part of a service registered with the Care Commission as:
- A care home service
- An independent health care service
- A school care accommodation service, or
- A secure accommodation service.
For these categories, the Care Commission sets and monitors standards for the accommodation in which the service is provided, as well as the service itself. In other categories, particularly housing support services, the Care Commission only regulates the service provided, and the accommodation is not exempt from HMO licensing.
Crown property is also exempt, but all other HMOs must be licensed, including those operated by local authorities and other public bodies. The day-to-day manager will be named on the licence as a joint licence-holder.
What sanctions are there for operating an HMO without a licence?
It is a criminal offence to operate an HMO without a licence. The maximum penalty is level 5 (currently 5000).
How are property managers or letting agents affected by licensing?
If the day-to-day management of the property is carried out by someone other than the owner, they will be named on the licence as a joint licence-holder (see part 2).
Letting agents or property managers should check that their clients are licensed where necessary. It is a criminal offence for anyone to act as an agent for an unlicensed owner of a licensable HMO, by doing anything "which directly permits or facilitates the occupation of that house" as an HMO.
If a licensing authority suspects that a house is an HMO, they may ask the agent for the owner's name and address, and it is an offence to fail to comply with such a request.
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