If a property is advertised as having a current HMO licence in place, is the licence transferable? I’m looking to buy a licensed HMO, and just want to check if I will need to reapply myself?
Congratulations on looking to purchase a new property, it’s always exciting looking to expand your portfolio and HMOs are a great option at the moment. It’s a booming market, and there are plenty of tenants looking to find their perfect room within a well-managed HMO.
However, with good yields come higher responsibilities, and ensuring your property is licensed is one of them. The current license sits with the current landlord, not the property, so will not transfer if it is sold. You will need to reapply for a licence with you as the landlord of the property.
It’s not all bad news though. Knowing that the property is already licensed is a good sign, as you know that it ticks all the boxes that your local authority is looking for. However, the responsibility for securing a license doesn’t sit solely with the property. You play a part as well.
You will have to undergo a ‘Fit and Proper person’ test, which assesses your suitability as a person with a responsibility to manage an HMO. There’s nothing too scary about this (although it sounds quite intrusive!), it simply seeks to check whether or not you (or anyone associated or formally associated with you) has:
- Committed fraud or any other dishonesty, or has any unspent convictions relating to this
- Committed any violent or drug related offences, or has any unspent convictions relating to this
- Committed any offences listed in relation to Section 3 of the Sexual Offences Act 2003, or has any unspent convictions relating to this
- Ever unlawfully discriminated on grounds of sex, colour, race, ethnicity, national origins or disability in connection with carrying out any business, or has any unspent convictions relating to this
- Contravened any laws relating to housing, or of the landlord and tenant law
- Been refused/had removed a licence for any HMO (mandatory, additional or selective)
- Breached a previous licence condition
- Been in control of a property that has been subject of proceedings by the local authority (breaches of Environmental Health Act etc)
You will also have to provide a number of different documents to your local Authority to support your licence application. Depending on your local authority, these could include:
- Proof of ownership (mortgage statement)
- Full details of owner and manager of the property
- A floorplan of the property, including location of fire safety features and room sizes
- A copy of the EPC
- A copy of the gas safety certificate
- A copy of the electrical safety certificate
- A copy of the PAT test certificate for any electrical goods,
- A copy of the fire alarm test certificate
- A completed licence application
As of October 1st 2018, the mandatory licensing requirements change, as do the rules surrounding room sizes, so it is well worth making sure that your potential new investment is ticking all the correct licensing boxes. The rules are getting tighter, so before you make any purchase, make sure to familiarise yourself with the regulations and make sure that the investment still makes sense.
Make sure you’re fully up to date by checking out our ‘HMOs: What you need to know’ checklist video here:
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