HMO properties on average generate more income than regular private rental homes, but they are also more strictly regulated. Obtaining an HMO licence involves checks on landlords, upgrading property to higher HMO standards and paying for quite a few safety certificates – but in the end it is worth it, as each additional bedroom let in Edinburgh is worth £5,000 to £7,000 a year.
What is an HMO?
HMO, or Houses in Multiple Occupancy, are premises occupied by three or more unrelated people who share bathroom and/or kitchen facilities. Fines for operating an illegal HMO (i.e. renting a property to more than 3 unrelated persons without a licence) are up to £50,000. Neighbours tend to report illegal HMOs, usually anonymously. Edinburgh Letting Centre is a specialist HMO Edinburgh-based letting agency. Every month we receive phone calls from landlords, who for various reasons need HMO help, and as such we strongly advise them to adhere to all HMO rules. Non-compliance can be very costly.
HMO licencing, step by step
Is your flat suitable for an HMO?
There is not point buying a flat that will never receive an HMO licence. So if any bedrooms have a width less than 2.25m – that room will not be suitable. If there is a living room/communal space (at least 11 sq m), all bedrooms must have at least 6.5 sq m. If there is no communal space, the minimum bedroom size is 10 sq m.
Location – student areas are great, as are neighbourhoods close to the city centre. Far- flung neighbourhoods are less suitable.
All prospective landlords need to be on the Scottish Landlord Register and pass all checks to establish they are ‘fit and proper persons’.
There is an assumption of diminished responsibility of tenants in shared flats, so HMO standards are higher than regular flats. All bedroom doors should be fire rated, equipped with fire seals and self close from any position. Tenants should be able to open all locks from the inside without keys. Interconnected smoke detectors are required in every bedroom. There should be a fire blanket in the kitchen and a fire extinguisher in the hallway. There are other requirements as well (noise provisions, carpeting requirement), but such details are outside the scope of this article.
Before submitting an HMO application, landlords should obtain all ‘usual’ lettings certificates: Electrical Installation Condition Report, Portable Appliance Test, Landlord Gas Safety Certificate, Energy Performance Certificate and Legionella Risk Assessment. In addition, there are HMO specific checks needed: Fire Risk Assessment, Fire Alarms Test and Fire Fighting Equipment Test. Some properties will also require Sprinkler Test and Emergency Lights Test.
With the landlord registration number and deed details in hand, and once the property meets all standards with all certificates obtained, we can now apply for the licence. Application can be done in person (Licencing Section, The City of Edinburgh Council, 249 High Street, Edinburgh), by post or online. There is a non-refundable application fee charged by the Edinburgh Council – currently £540 for a 3 tenant licence, £720 for a 4 tenant licence.
After you apply, there will be an initial HMO inspection, after which you will most likely be presented with a list of tasks to do. Such jobs will be checked during the follow up inspection, carried out a month or so later.
Assuming you have carried out all necessary remedials specified by HMO inspectors and the follow up inspection has been successful, you will receive your HMO licence. From then on your property can be let to three or more unrelated persons.
Edinburgh Letting Centre