Mandatory licensing is a legal requirement for landlords who rent out large Houses in Multiple Occupation (HMOs) in England and Wales. It applies to rental properties occupied by five or more tenants at least two of whom are unrelated who share facilities such as a kitchen or bathroom.
Legal Framework
Mandatory licensing was introduced under Part 2 of the Housing Act 2004 to regulate larger HMOs and ensure they meet proper safety, management, and living standards.
Who Needs a Mandatory HMO Licence?
A property requires a Mandatory HMO Licence if:
It is rented to five or more people forming two or more households (i.e., they are not from the same family).
Tenants share facilities such as a kitchen, bathroom, or toilet.
Unlike Selective and Additional Licensing, Mandatory Licensing applies nationwide, meaning councils must enforce it regardless of local policy.
Why Does Mandatory Licensing Exist?
The aim of Mandatory Licensing is to:
Ensure tenant safety, with fire safety measures, adequate space, and essential property maintenance.
Prevent overcrowding, by enforcing minimum room size requirements.
Hold landlords accountable for maintaining housing standards and preventing poor property management.
How to Apply for a Mandatory HMO Licence
Landlords must apply for a licence from the local council where the property is located. The council will assess:
Whether the landlord or managing agent is a fit and proper person.
The suitability of the property, including room sizes, amenities, and safety measures.
The management arrangements, ensuring compliance with HMO regulations.
Consequences of Not Having a Mandatory HMO Licence
Operating an unlicensed HMO that requires a Mandatory HMO Licence can result in:
Fines of up to £30,000 per offence
Rent Repayment Orders (RROs) – Tenants can reclaim up to 12 months' rent
Banning Orders, preventing landlords from managing rental properties
Restrictions on serving Section 21 eviction notices
If you rent out a property that houses five or more unrelated tenants, you must check whether it requires a Mandatory HMO Licence and apply to the local council to avoid penalties.