Managing Tenants, Houses in Multiple Occupation (HMO)

As well as maintaining the building fabric and other health and safety issues associated with Houses in Multiple Occupation (HMO), and meeting any relevant regulatory compliance standards, landlords of multi-occupancy properties also have a duty to manage their tenants, tenancy agreements, rent deposits, rent collection etc. In this respect HMO landlords are no different to landlords who own and manage smaller, single occupancy buy-to-let residential properties.

Typically there is an obligation placed on the landlord or property owner to provide their tenants with a comfortable and well maintained property, as well as being on hand should anything go wrong with the house or flat in question.

Tenancy Agreements for Houses in Multiple Occupation

Tenancy agreements for houses in multiple occupation will follow the same format as for other similar residential lease agreements.

Like all responsible landlords, you should draw up a tenancy agreement that is fair and reasonable and something that both you and your tenants can agree upon.

Once you are both happy, the tenancy agreement should be signed and dated, and then each of you should keep a copy should you wish to clarify something about the tenancy further down the line.

In the tenancy document you should detail things such as names of the landlord and tenant, how much rent is to be paid, payment dates, rent deposits, who is responsible for repairs and rates such as water and utility charges; and any rules on matters such as smoking, subletting and pets.

Protecting Tenant Deposits

As a responsible landlord you must put your tenants deposit in a government-backed tenancy deposit scheme (TDP) if you are renting under an assured shorthold tenancy (AST) that started after 6 April 2007.

As part of the deposit protection scheme you will have to protect the deposit money that the tenants give you… you are not just simply allowed to put it to one side.

As a landlord you have a duty to protect the deposit money using one of three government approved tenancy deposit schemes.

As soon as you have done this you should then provide evidence to the tenant as to where their money is being held.

When a tenant decides to move out of a property, it is then up to you as a landlord to give the deposit back – providing everything is ok with the property.

A deposit should be held back only if the property is damaged in any way through negligence; if a tenant has failed to keep up with rent payments; or if there is evidence that the property has been damaged through neglect or activities such as parties.

Terminating a Tenancy Agreement Early

In more serious instances however, if there have been times where you have not been happy with the way the tenant is treating the property, you may wish to end the tenancy agreement prematurely.

The following are examples that may prompt you to end the agreement with the tenant:

Immoral or illegal purposes
If you have evidence to suggest that the property is being used for immoral or illegal purposes.
Serious breach
A serious breach of the terms of the tenancy agreement, for example the tenant persistently sub-lets the property or carries out unauthorised alterations.
Failure to Pay Rent
If the tenant is missing rental payments on a regular basis.

However, even though you are well within your rights to evict a tenant should they not be conforming to the rules, you are still legally obliged to follow the correct procedure when it comes to ending a tenancy early.

For instance, you should always aim to give tenants plenty of notice so that they can begin to make other plans.

If you are in doubt about how to terminate a tenancy agreement early we recommend you seek professional advice from a solicitor experienced in such matters.

More Information about Houses in Multiple Occupation

For additional information concerning houses in multiple occupation Investment Property Partners have prepared a number of additional guides for property investors covering the HMO license application process, Housing Health and Safety Rating Systems (HHSRS) and managing tenants in multiple occupancy property.

If you are a landlord or property owner and require further information or support on property management issues like those covered here please contact us to discuss how Investment Property Partners can help.

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