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What is an HMO?

We hear the word HMO used plenty in the property industry, but there is sometimes confusion over what exactly it stands for and means.

The acronym itself stands for a House in Multiple Occupation, which is when a property is occupied by more than two qualifying persons who are not part of the same family.

A qualifying person is someone whose only – or main – place of residence is the HMO. This would include students living in student accommodation during term-time, as this would count as their only or main abode during the time they are residing there.

In fact, nearly all shared houses will count as HMOs – which means that most student properties will attract this label. Check with your letting agent if you are unsure.

Letting Solutions Blog - What is an HMO

If at least three renters live in a home, forming more than one household, it comes under the umbrella of an HMO. Equally, if tenants share a toilet, bathroom, kitchen and communal facilities with other tenants, it counts as an HMO.

A large HMO, on the other hand, is when a property is at least three storeys high or if at least five tenants forming more than one household live there and share facilities.

If you own an HMO, there are extra legal responsibilities that you must be conscious of. These extra regulations have been put in place to make sure that those living in HMOs are kept safe from fire hazards and have access to decent facilities.

Fire safety measures, in particular, must be rigorous, with legislation surrounding smoke alarms and carbon monoxide detectors in rented properties changing last year.

HMOs in Scotland are covered by fire safety legislation.

Smoke alarms and carbon monoxide detectors must be tested thoroughly on the first day of a tenancy and on a regular basis thereafter. If a landlord fails to do this, they could face a hefty fine.

What’s more, the electrical wiring of your HMO will need to be checked regularly. If it is found to be defective, you will be held responsible for this.

As a landlord of an HMO, you are also obliged to carry out a gas check on an annual basis. On a more basic level, you must ensure that tenants have access to cooking and washing facilities and that communal areas and shared facilities are kept clean and in good condition.

Naturally, it’s also important to make sure that the rental home is not overcrowded and that tenants are provided with enough rubbish bins/bags/cleaning equipment to help keep the rental property in tip-top shape.

You also have a responsibility to your tenants when it comes to repairs to communal areas, as well as general repairs within the property itself and the prevention of things like damp and clogged gutters. Repairs to water and gas pipes, electrical wiring and bathroom fixtures and fittings also come under your remit.

Additionally, you have responsibilities when it comes to energy efficiency. Tenants will need to be provided with an Energy Performance Certificate (EPC) before they move in.

In Scotland, the owner of an HMO must have a license from the local authority where the home is located.

Licensing is there to help make sure that an HMO is of good quality, safe to live in and well-looked after, which is why owners of HMOs must prove they are fit and proper to hold a licence before a local authority will grant them one.

The property must meet the necessary physical standards and show that it is suitable to be an HMO – or could be made to do so – before a license will be handed over.

The local authority is the one who sets the standards and decides the fees. They also have the powers to vary the terms of a license or revoke it. Operating an HMO without a license is a criminal offence, with a maximum fine of £50,000.

As West Lothian’s first dedicated letting agency, we have a wealth of experience and knowledge to help you get the most from your rental property.

To find out how much your property could be earning you in rent, check out our free and instant valuation tool.