Investing in House in Multiple Occupation (HMO) properties can be a lucrative opportunity for many in the UK, but it’s not without its challenges. Recent cases, such as a Westminster landlord being fined a staggering £28,000, highlight the importance of keeping up to date with local regulations.
If you’re a property investor planning or already invest in HMOs, please make sure you take the time to understand your local rules is essential to avoid costly mistakes.
Why Knowing Your Local HMO Regulations Matters
Whether you’re an experienced investor or just starting, compliance with HMO regulations is critical. Failing to stay updated on local rules can result in hefty fines, rent repayment orders, or even legal action – as seen in the case study below.
Westminster Council Fine
Landlord Tope Osazee, was fined over £28,000 after failing to license his three-person property as an HMO – view news article from The Negotiator here.
Westminster Council had extended its licensing criteria in 2021, but Osazee claimed he wasn’t made aware until 2023. The tribunal ruled that it was his responsibility to stay informed, emphasising the importance of understanding local regulations.
This case could have been avoided if he had ensured compliance with the council’s updated guidelines.
How Sourcers and Deal Packagers Can Help Keep Investors Up to Date
Any professional sourcing agent or deal packager should fully understand the rules and expectations required by their local council. It is their job to know and understand fully any restrictions or limitations and highlight these in deal presentations.
It’s also good practice when building relationships with an investor to make sure, even to experienced investors, of any recent changes they may not be aware of.
If a sourcing agent mentions something like this to you, it shows they are switched on and keeping your best interests in mind – even if you already know what’s required in your area.
NAPSA Members – particularly those who have gone through to become fully approved – are reminded through webinars, newsletters, and posts like these, of the importance of ‘knowing your patch’ as well as the strategies they source for.
The last thing any professional agent will want is their investor being fined for a deal they helped complete. It doesn’t serve well for building long-lasting relationships.
However, it’s also important that investors stay aware of requirements – after all – ignorance is no defence in the eyes of the law.
The Risks of Non-Compliance
If an investor fails to adhere to HMO regulations, it can lead to severe financial, legal and reputational consequences, including:
- Fines: Councils impose substantial fines for non-compliance; some cases exceed £50,000.
- Rent Repayment Orders (RROs): Tenants can claim back a significant portion of their rent for an unlicensed HMO.
- Legal Costs: Defending yourself in a tribunal can quickly become expensive.
- Reputation Damage: Non-compliance can tarnish your credibility as an investor or agent.
Stay Informed. Stay Compliant.
For many investors, it’s just not worth the risk of fines and reputation damage, especially when it’s simply to keep yourself in the loop. We’ve included some recommendations below for investors and sourcing agents to follow:
Check Your Local HMO Regulations
Research your council’s latest requirements for HMO licensing, it will vary across the country.
Make Sure Your Properties Meet Minimum Standards
- Before purchasing, confirm that the property you’re considering buying adheres to requirements such as room sizes, ventilation, and facilities – that’s if you are planning to run or set up as a HMO.
- Sourcing agents and deal packagers – this is something you should be considering as part of material information requirements when presenting any deals to an investor.

NAPSA Sourcing Agents Are Here to Help
We don’t want to see any investor face a fine when it’s so easily avoidable. With the right information presented in deals, and expert knowledge from professional sourcing agents, these sort of ‘knowledge gaps’ can be avoided.
Our Approved Sourcing Agents and Deal Packagers have met the compliance mark, meeting the current national minimum compliance standards required. They are ready to work with investors looking to expand their portfolio across the UK.
Check out our sourcing agents who specialise in HMO properties here.
Or register with us for free below to get more information:
Investors: https://napsa.org.uk/property-investors/
Sourcing Agents: https://napsa.org.uk/sourcers/