As a landlord, what do you need to do when a sharer moves into a house of multiple occupancy (HMO)? It requires a bit more than simply handing over keys. If you're a landlord navigating changes in an HMO, you need expert guidance. Here's how to manage the process smoothly, from Foxtons Director of Legal and Compliance, Manjit Kataora:
It’s a fact that houses let to multiple occupants - or ‘sharers’ – are at risk of more than the average number of tenants coming and going. Jobs, relationships and other circumstances can easily change mid-tenancy, forcing people to re-assess and move on before they had planned.
Read: Setting up an HMO
The way these changes are managed needs extra care. Simply agreeing informally that one tenant can go and be replaced by another is fraught with danger. Informal swaps like this – commonly referred to as ‘changes of occupancy’ – can easily result in an inadvertent surrender and regrant of the tenancy. Put simply, it means that swapping one of the occupants, even where the others remain, ends one tenancy and creates a brand new one. This can cause a real headache for landlords who do not understand the legal implications and who may be self-managing their properties.
When a new assured shorthold tenancy commences, various laws require the landlord to comply with a host of compliance measures. Deposit protection requirements require that where a deposit is taken, it must be protected and certain detailed information – known as “prescribed information” – must be sent to the new tenants within strict periods set down by law. Right to rent documents must also be checked and, where appropriate, gas safety certificates must be given to new tenants.
Incorrectly handled changes of occupancy will trigger all these requirement afresh. Serious fines lay in wait for those landlord who don’t comply. Non-compliance can also jeopardize a landlord’s right to recover possession on time: if a new tenancy is granted, a no-fault eviction order cannot be made until after six months of the date the new tenancy started. Any landlord who planned to live in the property themselves or who wanted to allow a relative to live in it at the end of the first tenancy would be prevented from doing so until the new tenancy ends.
Fortunately, there’s a way to avoid all this headache. Changes of occupancy need to be executed correctly and by deed. Where this happens, landlords can take comfort that the original timeline of their tenancy remains intact, and that the compliance measure that were met at the beginning of the original tenancy do not need repeating.
Foxtons can manage this process for you. Contact our property management team today to make sure you stay on the right path.
Landlord Essentials is a series of articles where our experts delve into the big questions for London landlords. If you have a question on letting your property in London, ask a Foxtons expert. If you want help making your property a success, get in touch with Foxtons lettings team.
