22 October 2014

House of multiple occupation: Good money - if you do it right....

Owning and letting an HMO (House of multiple occupation) can lead to good yields on an investment for a Landlord.  However, if you get it wrong the fines can by huge.
Two Landlords (not in the Andover area) were recently both fined £30,000 for breaches of the rules covering HMO’s in their area.  In one instant a Landlord was found guilty of 46 offences relating to 4 different properties by the Magistrates Court in Cambridge for allowing tenants to live in dangerous conditions, namely fire safety issues, dangerous electrics and poor security.  He was also charged £1250 in costs.
In a separate case another Landlord was again fined £30,000 for leaving a property with 5 tenants in it with no heating or hot water for 4 weeks during the winter, as well as a leaking toilet.  The fine was high as he was charged £15,000 for failing to licence the house as an HMO, £5,000 for failing to fix the boiler, £5,000 for failing to fix a soil pipe and a further £3,000 for failing to respond to an investigator.  On top of this he was also charged £2,160 in costs.

So the rewards for owning an HMO can be high but beware.  Always ensure you fully comply with the Management of Houses in Multiple Occupation (England) Regulations 2006 and talk to your local authority as there are regional variations to deal with as well.  If in doubt – ask your local authority or a good agent!

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