Property investors and landlords are being urged to ensure their houses in multiple occupation (HMOs) are licensed following a spate of fines recently.

A HMO property is any building or part of a building, such as a house or flat, that is occupied by unrelated tenants that share basic amenities. If the HMO has three or more storeys and five or more tenants using shared facilities, then by law, the property has to be licensed with the council.

In a recent case, two landlords in Peterborough were given £4,000 fines after running HMOs without a license. Another case in Swansea saw a landlord who rented to students for 13 years receive a fine for more than £10,000 for failing to have a license and maintain the properties.

Chris Baguley, director at lending specialist Auction Finance Limited, said: “HMO is a commonly used phrase but many landlords don’t understand exactly what the term means and if they need a license. Landlords of HMOs must manage their properties well and this means ensuring there is a means of escape, fire fighting equipment and alarms in working order. Councils are increasingly cracking down on landlords that don’t abide by the rules.

“It’s common for HMOs to come up for sale at auction and they’re always extremely popular as they can achieve high yields. As long as you get a license they make an excellent investment. If you need a license and fail to get one from the council, you could be liable for a huge fine. If you’re in any doubt about whether you need a license, contact your council.”

Changes to the way HMOs operate are also due to come into force this October. A consultation period is currently in place and new legislation could mean that property owners will have to apply for planning permission for change of use.