HMO Tenancy Agreement: A Guide for Landlords
A House in Multiple Occupation (HMO) tenancy agreement is an essential legal document that governs the relationship between landlords and tenants living in an HMO property. Managing an HMO requires specific attention to the tenancy agreement to ensure compliance with legal standards and clarity in tenant responsibilities. This guide explains the key elements of an HMO tenancy agreement, what landlords need to include, and how to stay compliant with UK regulations.
What Is an HMO Tenancy Agreement?
An HMO tenancy agreement is a legal contract that outlines the rights and responsibilities of both the landlord and tenants in a property classified as a House in Multiple Occupation (HMO). Unlike standard tenancy agreements, an HMO agreement is specifically designed for properties where three or more unrelated tenants share common facilities, such as the kitchen or bathroom.
HMO tenancy agreements can be either:
- Assured Shorthold Tenancies (AST): The most common type of agreement, suitable for tenants living in the property as their main home.
- Licences: Sometimes used when tenants do not have exclusive possession of specific rooms, such as in some forms of shared housing.
Key Elements of an HMO Tenancy Agreement
When creating an HMO tenancy agreement, it is crucial to include certain details to protect both you and your tenants. These key elements should cover the legal requirements and day-to-day management of the property.
1. Details of the Tenants and Landlord
The agreement should include the full names and contact details of the landlord (or the managing agent) and each tenant. If you have individual agreements with each tenant, these details will be different for each contract.
2. Property Address and Room Allocation
- The agreement should clearly state the address of the property.
- Specify whether the tenancy is for a particular room (if tenants are renting individual rooms) or for the whole property (in the case of a joint tenancy).
- Indicate which areas of the property are communal spaces (e.g., kitchen, bathroom, living room) and which are for the exclusive use of specific tenants.
3. Rent and Deposit Details
- Rent amount: Clearly state the total rent for the property or the individual rent for each tenant’s room. Include how the rent is to be paid (e.g., monthly or weekly) and the due date.
- Deposit: Indicate the deposit amount and ensure it is protected in a government-approved scheme (such as the Deposit Protection Service). Landlords are legally required to protect tenant deposits within 30 days of receiving them and provide tenants with prescribed information.
4. Tenancy Duration
- Clearly specify the length of the tenancy, including the start and end dates. Most HMO tenancies are Assured Shorthold Tenancies (AST) with an initial fixed term (e.g., 6 or 12 months), followed by a rolling or periodic tenancy if not renewed.
5. Responsibilities of the Tenants
To avoid disputes, the tenancy agreement should outline tenant responsibilities, such as:
- Paying rent on time and in full.
- Maintaining cleanliness in their rooms and communal areas.
- Sharing responsibilities for cleaning communal spaces (or if cleaning services are provided, how often this is done).
- Reporting repairs or damages promptly to the landlord.
- Respecting house rules: You may include specific rules on noise levels, guests, smoking, and pets.
6. Landlord’s Responsibilities
As a landlord, your responsibilities in an HMO are more extensive than with single-let properties. The agreement should outline:
- Maintenance and repairs: Your obligation to keep the property in good repair, especially in communal areas and shared facilities.
- Fire safety: Ensuring the property complies with HMO fire safety regulations, including providing smoke alarms and fire extinguishers in communal areas.
- Gas and electrical safety: Carrying out regular checks and providing gas safety certificates and electrical inspection reports to tenants.
- Waste disposal: Ensuring there are adequate waste and recycling bins, and informing tenants of collection days.
7. Utilities and Bills
- Clearly state which bills are included in the rent (e.g., electricity, water, gas, broadband), if any, and how tenants are expected to contribute to bills that are not included.
- If tenants are responsible for their own bills, indicate how these costs will be shared and paid.
8. HMO Licensing Information
If your property requires an HMO licence, include the details in the tenancy agreement. HMO licences are required for properties rented to five or more tenants in England, and each licence is issued by the local council. The agreement should confirm that the property meets the necessary licensing requirements and is compliant with safety standards.
9. Tenant Conduct and Breach of Agreement
It’s important to outline what constitutes a breach of the tenancy agreement and the consequences. This could include:
- Non-payment of rent
- Causing damage to the property
- Violating noise or behaviour rules The agreement should also state the process for eviction or early termination if a tenant breaches the contract.
Joint vs. Individual HMO Tenancy Agreements
There are two main types of tenancy agreements for HMOs:
1. Joint Tenancy Agreement
- All tenants sign one contract and are jointly responsible for paying the rent and adhering to the terms of the agreement.
- If one tenant leaves, the remaining tenants are still responsible for covering the full rent. This can lead to complications if a tenant moves out mid-term without finding a replacement.
- Common in HMOs where tenants move in together as a group, such as students or friends.
2. Individual Tenancy Agreement
- Each tenant has a separate contract for their room and is only responsible for paying their share of the rent and complying with the terms for their room.
- The landlord retains greater control over the tenancy and can fill empty rooms without needing to involve the other tenants.
- Ideal for HMOs with unrelated tenants who move in at different times.
Legal Requirements for HMO Tenancy Agreements
As an HMO landlord, you must ensure that your tenancy agreement complies with UK rental regulations. Failure to do so can result in fines or legal disputes. Key legal requirements include:
- Protecting the deposit in a government-approved scheme.
- Providing the tenant with essential documents, including:
- Gas Safety Certificate
- Energy Performance Certificate (EPC)
- How to Rent Guide
- HMO Licence details (if applicable)
- Complying with HMO fire safety and health regulations.
How Fraser Bond Can Help
At Fraser Bond, we offer expert property management services for HMO landlords. We can help you create legally compliant HMO tenancy agreements and manage your property, ensuring it meets all licensing and safety standards.
Our services include:
- Drafting and reviewing HMO tenancy agreements
- Tenant sourcing and referencing
- Full property management and maintenance
- HMO licensing and compliance support
Contact Fraser Bond today to learn more about how we can assist with managing your HMO property and ensuring your tenancy agreements protect both you and your tenants.
