Dwelling of Multiple Occupancy (HMO)
The Housing Act 2004 introduced licensing for houses in multiple occupation (HMO). The Act provides a detailed definition of HMOs and sets out standards of management of this type of property.
Under the Act, Local Authorities (LA) are able to “licence” HMO is two different ways, “mandatory licensing” and “additional licensing”.
Mandatory licensing is for all HMOs that are occupied by five or more persons forming two or more households.
Additional licensing is when a LA can impose a licence on other categories of HMOs in its area.
When a Local Authority grants a licence it will look at a number of deciding factors:
- the suitability of the HMO for the number of occupants;
- the suitability of the facilities;
- the suitability of the landlord and management of the HMO.
Additionally, the LA will need to ensure that mandatory standards are met and continue to be met with regards the HMO, these are:
- an annual gas certificate;
- keep electrical appliances and furniture supplied by the landlord in a safe condition and to supply a declaration of their safety to the council on demand;
- install smoke alarms and keep them in proper working condition and to supply to the council an declaration on their position and condition;
- give the occupants a statement of the terms on which the occupy the HMO.
The LA may specify additional conditions relating to the facilities of the HMO, its condition and management.
Increasingly due to this ability to specify additional conditions on HMO licensing that scheme members are being asked to provide EPCs for HMOs to comply with Local Authority HMO licensing requirements. LAs are using EPC as a means of measuring the HMO’s condition. HMOs are not a trigger with EPB and as such, is not covered by the legislation.
HMOs are viewed in a different manner to a domestic dwelling as defined by EPB. HMOs are;
- occupied in a more intensive manner than a standard domestic or commercial property;
- licensing is not concerned with the property, just the way that it is occupied and if it is in a fit condition;
- licensing does not prevent the property being rented as a single family dwelling, even if a HMO licence is in existence;
EPB legislation is concerned with different drivers when assessing the property. These are;
- methodology is driven by the building type and its designed use;
- RdSAP and SBEM apply a ‘standard occupancy’ factor to the calculation and ignore the actual number of occupants in the building;
- Occupancy is immaterial to the assessment of the building;
- Design use of the building is important;
- RdSAP or SBEM may be the appropriate methodology for the assessment depending on the original designed use of the building.
- Similar properties are being assessed using different methodologies, resulting in similar properties receiving different certificates.
Although the EPC is being used within the HMO process, the drivers behind what methodology should be used are those required by EPB. As such the fact that the building is being used as an HMO should have no bearing on the choice of assessment methodology. The building and its initial intended designed use should be the deciding factor when choosing which methodology is correct to follow.
The DCLG document ‘Improving the Energy Efficiency of our Buildings’, issued in April 2014, states:
‘An EPC is not required for an individual room when rented out, as it is not a building or a building unit designed or altered for separate use. The whole building will require an EPC if sold or rented out.’
Therefore this guidance should only be applied to the whole dwelling/building and not an individual room.
If the original designed use of a building was for a single family (e.g. Victorian Mid-terrace House), the correct methodology for assessing the building would be SAP/RdSAP; the result will be more appropriate than other methodologies in assessing the building.
If the original designed use of a building was to have shared amenities (e.g. Halls of residence), the correct methodology for assessing the building would be using SBEM; the result will be more appropriate than other methodologies in assessing the building.
Examples of HMOs:
Joint and several
If you grant a joint and several tenancy where all the tenants are on one agreement, then this is, in legal terms, no different to letting a normal dwelling to a single family. Therefore, one EPC will be required for the whole dwelling.
Individual let rooms
Where individual rooms in a building are rented out on separate tenancies and there are shared facilities (e.g. kitchen and/or bathroom), an EPC is not required. An EPC is only required for a dwelling that is self-contained, meaning that it does not share essential facilities such as a bathroom/shower room, wc or kitchen with any other dwelling, and that it has its own entrance. This is because an EPC is only required on the rental of a building or part of a building ‘designed or altered to be used separately’. Renting a room does not meet the ‘part of a building’ definition. Put simply, an EPC is only required for a habitable unit if it is self-contained.
A house or flat is rented by a number of tenants who have exclusive use of their bedrooms but share a kitchen and bathroom. In this case each tenant has a contract with the landlord for the parts they have access to, but not for the whole dwelling. An EPC is therefore not required each time a tenant moves, although one will be required for the whole house if it is sold or rented as a whole.
A group of friends want to rent a property and there will be a single contract between the landlord and the group for the rental of the whole dwelling (ie it is a joint and several tenancy). An EPC is required for the whole dwelling.
Individual tenants rent rooms in a hall of residence. Each room does not constitute a building or part of a building designed to be used separately. An EPC is not required, for each individual room. However, an EPC will be required on the whole building if it is sold or rented. It will also be required on self-contained units within the hall, for example, a self-contained caretaker’s flat, if this is sold or rented.