Transferring an HMO License in Edinburgh: What You Need to Know 18 Mar, 2024

Transferring an HMO License in Edinburgh: What You Need to Know

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Transferring an HMO License in Edinburgh: What You Need to Know

Owning a property with an HMO (Houses in Multiple Occupation) license in Edinburgh can significantly enhance its value, leading to higher rents and asking prices compared to non-HMO properties. While this benefits current owners and sellers, potential buyers often wonder if paying a premium for an HMO-licensed property is worthwhile. The key consideration here is whether the HMO license can be transferred to the new owner.

So, can Scottish HMO licenses be transferred to another person?

The answer is somewhat nuanced. Yes, HMO licenses in Scotland can be transferred, but with certain conditions and a limited timeframe, typically one month initially. The Housing (Scotland) 2006 Act and its Explanatory Notes provide clarity on this matter.

According to Section 136 of the Housing (Scotland) 2006 Act, an existing HMO license automatically transfers to the new owner of a licensed property and remains valid for one month from the date of purchase, provided that the new owner is already registered on the local authority’s landlord register. If the new owner submits a license application within that month, the license continues until the application is processed, similar to renewal procedures. However, if the new owner is not a registered landlord, the license expires upon ownership transfer.

Now, let's consider a scenario with an HMO-licensed property on the market in Edinburgh. If the new owner is already a registered landlord with the Edinburgh Council, the existing HMO license transfers to them for one month from the purchase date. It's imperative for the new owner to apply for a new HMO license within this timeframe, during which the old license remains valid until the new application is processed.

However, if the buyer is not a registered landlord with the Edinburgh Council, the old HMO license expires upon purchase.

But why would someone want to retain the old HMO license? Simply put, it often makes sense because new owners would then only need to comply with the previous HMO requirements rather than the current ones. As legislation surrounding HMO properties becomes increasingly stringent over time, any grandfather clauses can prove advantageous. For instance, under current regulations, a room with a width of less than 2.25 meters might not be suitable as a bedroom. However, if the property holds a valid HMO license issued in the past, the older criteria would apply, potentially allowing such a room to be classified as a bedroom.

Before making any decisions regarding HMO licenses, it's crucial to seek expert advice. While this article provides insights applicable to HMO licenses across Scotland, including Edinburgh, different regional authorities (councils) may interpret legislation differently. Therefore, it's advisable to consult with the licensing team within your council or reach out to a local letting agent or property management company specializing in HMO properties for tailored guidance.

Please contact The Flat Company for expert advice:   0131 226 7733