20 Jul 26 So says Tamy Finkelsten Property Investor with TAMNOON HOMES in her recent ...
July 20, 2026
DO I NEED AN HMO LICENCE FOR THREE TENANTS?
Houses in Multiple Occupation: What Are The Rules For Three Tenants?
I’m a landlord and I have three tenants, do I need an HMO licence?
This is one of the questions most often asked by landlords who turn to us for help. And it’s not surprising, considering that the HMO rules are complex, and licensing requirements vary, depending on the local authority rules for the area where your property is situated.
First, you need to understand that the law is concerned with the number of occupants, not the number of tenants.
Second, if you have three occupants in your rental property and if ANY ONE of the occupants is not RELATED to the other two (by blood or sexual union) then your property is 99% certain to be a shared house HMO under the Housing Act 2004.
The most important questions to ask yourself regarding an HMO licence for three occupants is:
1) “Does my property have three occupants who are not all part of the same family and, importantly, if they are part of the same family can I prove that they are all related?”
If the answer is “yes” then:
2) “Is my rental property in an area where the local authority has Additional HMO Licensing requirements?”
And:
3) “Is my rental property in an area where the local authority has Selective Licensing requirements?”
Why is this important?
Understanding the HMO licensing rules of your local authority is ESSENTIAL. If you get it wrong, it’s a criminal offence and you could be fined up to £30,000 for failure to licence.
Also, your property has to comply with all of the HMO Management Regulations, and many other regulations, any breach of which is a criminal offence with potentially unlimited fines.
Why are some local authority HMO licence rules different?
There are two types of HMO licence: a mandatory licence, for properties which have five or more occupants who share an essential service (such as a kitchen or bathroom). Only ONE of these tenants needs to be from a separate household or family (for your property to be classed as an HMO requiring a mandatory licence.
Mandatory licensing applies to all relevant properties in England and Wales.
The second type of HMO licence a private landlord may need is an Additional licence. Local authorities can require Additional HMO licensing for properties with three or four tenants.
Additional licensing is required in specific areas at the discretion of the local authority.
Even if the council doesn’t have an Additional Licensing Scheme, but it does have a Selective Licensing Scheme – it will require a Selective Licence. Additionally, your property will need to comply with all the HMO Management Regulations, any breach of which is a criminal offence with potentially unlimited fines.
How do I find out if my local authority operates additional HMO licensing for three or four tenants?
Go to your local authority website and search for ‘additional licensing’.
Do not call your local housing authority to ask for advice, and do not enter your property address on any online form.
Doing either of these things is likely to trigger an inspection from council enforcement officers.
Even if your privately rented property doesn’t require an HMO licence, the enforcement officers can enter your property on suspicion of failure to licence, look for breaches of all the other relevant regulations, and issue immediate fines.
If you’re not sure, call us on 0208 088 0788.Licensing FAQs
Q. I have three occupants in my property but they’re all friends. Do I need an additional HMO licence?
A. If your local authority operates additional HMO licensing, and unless your tenants are all from the same family, you need an additional HMO licence.
Q. My tenants are a couple who rent a room to a friend, do I need an additional HMO licence for three people?
A. Yes, you do. The criteria for Additional HMO licences for three people apply if any one of them is not part of the same ‘household’. A family unit, or a single household, is classed as:
People who are related to each other by blood or sexual union, including children and certain other relatives
Foster families
Couples who live together as partners (sexual union) plus any of their children.
A carer and the person they care for.
In rare cases, an employer and a domestic employee
Q. My tenants are a couple who rent to a friend, do I need an Additional HMO licence for three people?
A. Yes. The criteria for additional HMO licences for three people are the same as mandatory licensing conditions if they form two or more households (i.e. if just one is not related to the others).
In this case, you have a difficult situation where your tenants have created an illegal HMO and you can expect a Civil Financial Penalty fine of between £20,000 and £30,000.
Your tenancy agreement should specify that tenants cannot sub-let. But regardless of any contract, in this situation you are automatically responsible by law for operating an HMO - even if you don’t know about it.
If this happens, seek immediate help from Landlord Licensing & Defence – preferably before the council starts enforcement proceedings.
If the council has already started enforcement proceedings, contact us immediately. We’ve dealt with many hundreds of similar cases and can negotiate on your behalf in ways that you cannot.
Q. My two tenants only occasionally have people to visit, obviously I don’t need an additional HMO licence for three occupants.
A. Don’t be so sure! If the council suspects your property is an HMO and carries out a raid, and enforcement officers find signs of a third person sleeping in the property, they’ll assume they’re an occupant until proven otherwise.
And if that person is between homes – perhaps due to a relationship breakdown or relocation for work – you are operating an unlicenced HMO.Q. What other scenarios would require an HMO licence for three tenants?
A. There are lots of ways your privately rented property could be classed as an HMO for three occupants, if they share an essential amenity such as a bathroom or a kitchen.
They include:
A co-habiting couple who share with a friend = an HMO
Three individuals not from the same family, even if they’re all friends = an HMO
A single parent, their child, and their child’s friend = an HMO
A married couple who look after a child who lives with them, is not their own and not officially fostered = an HMO
Two people or a couple who offer their spare room or sofa to a friend who’s between homes = an HMO
These are just a few examples. There are lots of very common scenarios that can unwittingly create an HMO with three people in one property.
Q. The couple in my property look after a friend’s child who’s under 18 who isn't their own, surely that’s not classed as an HMO with three tenants?
A. Unfortunately, it is! Children are legally classed as occupants, regardless of age. If they’re not part of the same family (or foster family), they’re individual residents.
Q. Is there anything else I should know about HMO licences for three occupants?
A. There are lots of applicable regulations, and some rare exclusions related to the size and the type of the property.
It’s a complex web of national legislation and local powers that’s almost impossible to navigate unless you’re qualified in this highly specialised area of law.
If you’re a landlord and you’re uncertain about ANY aspect of your privately rented property, speak to our experts to find out your obligations as a private landlord and the type of licence you may need.
An important note for sub-letting tenants
If you’re a tenant and you’re letting someone live with you, whether or not you’re charging them rent, you’ve unwittingly created an HMO – and you’re now a landlord in the eyes of the law. This means you too can be fined up to £30,000 for not licensing the HMO you’ve created, and even more under the HMO Management Regulations - which you are 99% certain to be in breach of.
Your first diagnosis call is always FREE: call 0208 088 0788.When we know your situation, we can arrange to deal with your licensing situation and arrange a site visit to ensure your property is fully compliant with the hundreds of pages of legislation that govern privately rented HMOs.
When we know your situation, we can arrange to deal with your licensing situation and arrange a site visit to ensure your property is fully compliant with the hundreds of pages of legislation that govern privately rented HMOs.
Get help from the very start
HMO Advice
Whether you're planning a new HMO, renovating an existing HMO or simply want to ensure your current HMOs are fully compliant with relevant legislation and regulations you need professional HMO advice.
Your team of experienced landlords and developers here are specialists in HHSRS, Fire Risk Assessment, Planning, Refurbishment and Development.
They are just a phone call away.
To give you HMO advice in London, the North, the Midlands and in fact the whole of England and Wales.
And these experts are on standby to help you whenever you need advice.
HMO Services
If you need HMO services in London, throughout England and Wales the specialists here at Landlord Licensing & Defence can assist you.
Here, you have access to a full range of HMO services including HMO design, HMO planning permission, HMO compliance, HHSRS, Fire design, Fire risk assessment.
As well as HMO Amenity Standards compliance, HMO licensing advice, HMO licence application service, HMO property licensing and HMO licence condition 'representations'.
HMO Design
Most landlords and their architects design HMOs without reference to the local HMO Amenity Standards.
They then apply for an HMO licence only to find that the shiny new and expensively converted HMO is non-compliant with HHSRS or HMO Management Regulations.
In many cases the landlord only finds out when the council visits two years after the licence application and issues massive fines for non-compliance. Often £30,000 or even more.
Involving Certified HHSRS and fire risk assessors at the design stage and during the works can ensure that you get all of these design and compliance matters (which are over and above building regulations) right from the outset.
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