What is an HMO? The Standard Test

A property is generally considered an HMO if it meets the 'Standard Test' (or 'self-contained flat test' or 'converted building test'), which typically means:

• Three or more Contract Holders: At least three people live there.
• Two or more Households: These Contract Holders form two or more separate 'households'. A household is defined as a single person, or members of the same family who live together (including married or cohabiting couples, relatives, half-relatives, and step-relatives).
• Shared Facilities: The Contract Holders share amenities like a toilet, bathroom, or kitchen facilities.

Example: A house rented by three friends who are not related, sharing a kitchen and bathroom, would typically be an HMO.

Mandatory HMO Licensing in Wales

Even if your property meets the standard HMO definition, it might also require a mandatory HMO licence. In Wales, mandatory licensing applies to HMOs that are:

• Three or more storeys high (including basements and attics if used as living space).
• Occupied by five or more people forming two or more separate households.
• Where the Contract Holders share amenities like a toilet, bathroom, or kitchen facilities.

If your property meets these criteria, you must apply for a mandatory HMO licence from your local authority. Operating a mandatory licensable HMO without a licence is a criminal offence.

Additional and Selective Licensing Schemes

Beyond mandatory licensing, local authorities in Wales have powers to introduce additional or selective licensing schemes:

• Additional Licensing: A local authority can apply additional licensing to other types of HMOs not covered by mandatory licensing (e.g., smaller HMOs with fewer than five occupants, or those with fewer storeys). In Cardiff, Cathays and Plasnewydd are areas where additional licensing is in effect.
• Selective Licensing: A local authority can apply selective licensing to all privately rented properties (not just HMOs) in a specific area, usually to address issues like anti-social behaviour or poor property conditions.

It is essential to check with your local council to see if any additional or selective licensing schemes apply in your area, as these can vary significantly.

Landlord Responsibilities for HMOs

HMO landlords have significantly more responsibilities compared to those letting single-family homes. These include, but are not limited to:

• Higher Fire Safety Standards: More stringent requirements for fire alarms (often linked systems), emergency lighting, and fire doors.
• Amenity Standards: Ensuring adequate kitchen and bathroom facilities for the number of occupants. Local authorities usually have specific standards for this.
• Waste Management: Providing adequate facilities for the storage and disposal of household waste.
• Regular Inspections: Conducting more frequent inspections to ensure the property is well-maintained and communal areas are clear.
• Manager's Duties: Ensuring the manager of the HMO (who could be the landlord or an agent) is a 'fit and proper person'.
• Rent Smart Wales: All HMO landlords must also comply with Rent Smart Wales registration and, if managing the property themselves, licensing requirements.

Consequences of Non-Compliance

Operating an unlicensed HMO or failing to meet HMO management regulations can lead to severe penalties:

• Unlimited Fines: For operating an unlicensed HMO.
• Rent Repayment Orders: Contract Holders can apply for a Rent Repayment Order, requiring the landlord to repay up to 12 months' rent.
• Banning Orders: Serious breaches can lead to a landlord being banned from letting or managing properties.
• Inability to Serve Possession Notices: You may be unable to serve a 'no-fault' (Section 173) possession notice if your HMO is not properly licensed.