Landlords often have several categories of property they own and rent out, with some of the most complex rules applying to what are known as houses in multiple occupancy, or HMOs Landlords will benefit from a specific insurance product called HMO insurance
HMOs are defined as those buildings occupied by two or more separate households. Some HMOs require landlords to have a special license, while others don’t. Generally, buildings made up of entirely self-contained units that meet the standards of the 1991 Building Regulations Act don’t require licensing. You must get a license if the building has three or more storeys, is occupied by five or more tenants who form more than one household and if those tenants share some facilities. In other words, licensing applies to flat or bedsit properties where there are one or more shared bathrooms, toilets, kitchens or other communal areas. The property must be the tenants’ main residence and the communal areas must be for the sole use of the tenants.
Read more: Do I need landlord insurance for a flat?
A license can be obtained from your local authority and it runs for five years. The cost varies from one authority to the next. Granting of a license will be conditional on meeting required safety standards. This means having up to date gas safety certificates, with annual inspections, having working fire alarms, extinguishers and smoke detectors, and there being adequate marked escape routes in the event of a crisis. The property should also be safe in general and free of structural hazards.
A license can be obtained from your local authority and it runs for five years
An HMO license is a legal requirement and failure to obtain one is a criminal offence, as is breaching the conditions. Both offences carry stiff fines, and being prosecuted may affect your ability to continue in business as a landlord. Local authorities may also extend the requirements for licensing as they see fit, so it is important to check whether your property requires licensing. Read more and apply for a license here.
HMOs and insurance
Your insurer will also need to know whether the property counts as an HMO. The precise nature of the occupancy will affect the type of policy that applies and a failure to disclose all information could mean that your policy is invalid when you need to claim. Your premium could also be affected.
Alan Boswell Group can put together a bespoke landlord insurance policy suited to your property, ensuring that you only pay for cover you need and that there are no ‘blind spots’ that are not covered. Loss of rent cover, rent guarantee insurance and legal expenses cover are also important for HMOs because of the number of different tenants to be considered.
Please note this information applies to England only. Please refer to specific government guides below.
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