Houses in Multiple Occupation
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Landlords and tenants of Houses in Multiple Occupation (HMOs) are often confused about the fact that owners, not tenants, are liable for the payment of Council Tax on these properties.
What are HMO's?
A House in Multiple Occupation is one which has been:
- Built or adapted for occupation by tenants or licensees who are not living as a single household OR
- Is a dwelling which is occupied by a person or persons, each of whom holds a tenancy or licence to occupy part only of the dwelling, or who pay rent or a license fee in respect of part only of the dwelling.
- A house which has been divided into separate bedsitters is a good example of an HMO under category (1), but a block of flats does not come into this category because each flat in the block would be classed as a separate, self contained dwelling in its own right.
In category (2) It does not matter if the house has only one tenant or licensee while the rest of the building stands empty; if the tenant's agreement only covers a part of the property which fits the above description, that property is classed as a House in Multiple Occupation.
It is perhaps worth noting that there are other definitions of HMO in use, for the purposes of Fire Safety and Environmental Health issues. We are not concerned with those here and please note that our definition refers only to the matter of Council Tax liability.
How can we tell if a dwelling is an HMO?
If a dwelling has been structurally adapted or purpose built for multi-occupation, this is usually quite apparent. There would be, for example, separate washbasins in each bedroom, several bathrooms or kitchen areas within the property, and perhaps a fire-escape staircase. Student halls of residence, bedsitters, hostels and B&B establishments are good examples of this category of HMO.
Who is liable to pay the council tax?
If a property meets all the conditions for a House of Multiple Occupation, it is the owner, not the tenant, who is liable to pay Council Tax on the property. The owner or landlord can pass the Council Tax charge on to the tenants in the form of a rent increase. If this is to occur, landlords/owners are advised to make this arrangement quite explicit to their tenants.
You can appeal against being designated the liable person.
Page last updated: 4 February 2020