Derby HMO Licensing: Mandatory Licence Fee £971 for 5 or More Occupants

Derby City Council requires a mandatory HMO licence for any property that meets all 3 of the following conditions: it is occupied by 5 or more people, those people form 2 or more separate households, and they share facilities such as a kitchen or bathroom. This threshold was extended nationally in October 2018, removing the previous requirement for the property to be 3 or more storeys — meaning ground-floor and first-floor HMOs in Derby are now captured under mandatory licensing if they meet the occupancy test.

If your property houses fewer than 5 occupants but still functions as an HMO, Derby City Council also operates an additional licensing scheme covering smaller HMOs of 3 or more occupants across designated wards. Always check whether your specific postcode falls within an additional licensing designation before assuming only mandatory rules apply.

What Does an HMO Licence Cost in Derby?

The current licence fee charged by Derby City Council is £971 for a 5-year licence. This fee is split into 2 parts: a non-refundable application processing fee paid upfront, and a second instalment due upon approval. The non-refundable element means you lose the first portion even if your application is ultimately refused, so ensuring your property meets the required standards before applying is essential.

Landlords who are accredited members of a recognised landlord accreditation scheme, such as the National Residential Landlords Association (NRLA), may be eligible for a discounted fee. Some councils in the East Midlands offer reductions of up to £50 to £100 for accredited landlords, so it is worth confirming Derby's current discount position directly with the council before submitting your application.

Licence fees are non-transferable. If you sell the property, the new owner must apply for a fresh licence within 28 days of taking ownership. Similarly, if the licence holder dies, a temporary exemption period of 3 months applies, after which a new application must be submitted.

How Do You Apply for an HMO Licence in Derby?

Applications for HMO licensing in Derby are submitted online via Derby City Council's licensing portal. The process has 5 key stages: create an account, complete the property information form, upload supporting documents, pay the fee, and await an inspection appointment.

The council aims to process applications within 8 weeks of receiving a complete submission, though complex cases or those requiring significant remedial works can take longer. A temporary licence of up to 12 months may be issued while works are being completed to bring a property up to standard. You must not exceed the approved occupancy number stated on your licence at any point during this period.

If you are buying a property that is already operating as a licensed HMO, always request a copy of the existing licence and check its expiry date. Licences issued before the October 2018 rule changes may carry different conditions from those issued today.

What Documents Do You Need?

Derby City Council requires a specific set of documents with every HMO licence application. These include: a valid gas safety certificate (renewed annually), an electrical installation condition report (EICR) dated within the past 5 years, energy performance certificate (EPC) with a minimum rating of E, fire alarm test certificate, emergency lighting test certificate, and floor plans drawn to a minimum scale of 1:100.

You will also need to provide a copy of your buildings insurance policy, details of any managing agent (if applicable), and a completed fit and proper person declaration. Any criminal convictions, civil penalties, or previous licence refusals within the past 5 years must be disclosed at this stage.

What Happens If You Don't Have a Licence?

The consequences of operating an unlicensed HMO in Derby are severe. Under the Housing Act 2004, the maximum civil penalty for failing to licence an HMO is £30,000, issued by the council without the need for a court hearing. Criminal prosecution remains an option for serious or repeat offenders, where an unlimited fine can be imposed by a magistrates' court.

Beyond fines, tenants living in an unlicensed HMO have the right to apply for a Rent Repayment Order (RRO) through the First-tier Tribunal. A successful RRO means the landlord must repay up to 12 months' worth of rent — even rent that has already been spent. A property with 5 tenants each paying £500 per month represents a potential repayment liability of £30,000 from that single provision alone.

Additionally, landlords of unlicensed HMOs cannot serve a valid Section 21 notice to regain possession. This is a significant practical consequence that affects your ability to manage the tenancy legally.

What This Means for Derby Landlords

HMO licensing in Derby is not optional, and the 2018 threshold changes mean thousands of properties that were previously unregulated now require a licence. With a £971 fee, a 5-year licence term, and penalties reaching £30,000 for non-compliance, the cost of getting it wrong far outweighs the cost of getting it right. Check your occupancy numbers, review your postcode against the additional licensing scheme, gather your documents, and submit your application before your next tenancy begins.