Do You Need to Licence Your Home as an HMO?
Many local authorities classify any rental property where more than two households share living facilities (kitchen, toilet and bathroom) as an HMO (e.g. you could have a two bed flat, shared by 3 unrelated people, and that would be classed as an HMO) - check with Housing at your local authority if the area you live in is subject to an additional HMO licensing scheme.
Your local authority might also impose a requirement for planning permission for an HMO, even a small one (this is designed to limit the number of shared houses in a given area), so it's advisable to also check with your Planning Department if your area comes under an Article 4 Direction.
If your property is particularly large (over three storeys) and shared by 5 or more people, forming more than one household, it will be subject to mandatory HMO licensing in all parts of England and Wales.
For the record, it doesn't matter whether the occupants are lodgers or tenants, it's the fact that they're paying rent for shared accommodation and belong to more than one household - a household being an individual adult, a couple in a relationship (which can be a same sex couple, or an unmarried couple), or a family. A family is defined as people related by blood, adoption or marriage and includes more distant relatives such as cousins.
Don't forget, if the landlord lives in, the landlord and his/her family will count as one of the households sharing!
A live in employee (such as a carer, au pair or nanny) is regarded as being part of his/her employee's household.
As mentioned elsewhere on this site, a live in landlord does not need to live in the property 100% of the time. Provided it's his main home, he/she will still be regarded as a live in landlord, and his/her renters will be licencees, not tenants for this reason. However, if such a landlord were ever challenged in a court of law, he/she would need to be able to demonstrate a valid reason (such as having to travel regularly for work) for not living at the property all the time, rather than simply contriving a situation to rob his/her renters of a more secure legal status as tenants!
As well as having more control over the property and its occupants, a live in landlord also has the legal advantage of being able to evict a problem licencee much more easily than a tenant under an AST. Under an AST, a landlord can give notice under Section 21 (for no reason) which requires 2 months notice and often requires enforcement with a Court Order and often bailiffs too. Or Section 8, which provides several grounds, including rent arrears (a mandatory ground) and anti social behaviour (discretionary) - but again, a Court Order and likely enforcement by bailiffs is required.
HMO safety requirements
As the law takes the view that an occupier can't always rely on housemates they may not know to use shared facilities responsibly, and the higher risks associated with multiple use of gas and electricity in general, it imposes additional safety requirements on HMOs, even where it's the landlord's home too.
As the structure, occupation and use of individual HMOs varies so much, there is no standard set of safety rules, even within the same area, but there are minimum legal requirements such as a smoke alarm on each floor (since 1 October 2015, this applies to all rental property, including one room lodger lets) and fire safety blankets in kitchens.
Contact your local authority's Housing standards and enforcement team for information and to book an assessment of your property if necessary.
Assignment (change) of resident landlord
Although it isn’t likely to happen often, it may sometimes be the case that a live in landlord moves out, to make way for another live in landlord (who could be a new owner occupier or the owner’s tenant), but the lodger(s) remains living at the property. This is likely to be more usual with HMOs.
Provided the lodger is given 28 days notice of the change of live in landlord, and the new landlord moves in within 6 months, the renter's status remains that of a lodger, although they have temporary tenancy rights if there is a gap between the old landlord moving out and the new one moving in, so they would become an excluded tenant until the new landlord moves in. However, where the lodger shares the property with other lodgers, he/she would only have exclusive rights over their room until the new landlord moves in.
If a resident landlord dies, his/her estate will simply continue as “resident” landlord (as though there had been no change of landlord) until the property is disposed of.
Further information on change of resident landlord can be found in the government leaflet, Rent a room in your home”.