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Are you a residential landlord? Does your property require a licence?
The private rented sector (PRS) is the second-largest housing tenure in England and has doubled in size since 2002. In response to such growth and in order to protect residents by maintaining safe and secure properties, and to ensure the continued viability of the sector, the government has introduced on a piecemeal basis new legislation, regulations and enforcement tools designed to improve standards across to the PRS.
Selective Licensing
Under the Housing Act 2004, local authorities currently have powers to introduce selective licensing of privately rented homes to address problems in their area, or any part of them, caused by low housing demand and/or significant anti-social behaviour. Selective licensing was introduced in 2006 to try to force rogue landlords to clean up their acts and reduce socially unacceptable behaviour. In areas where selective licensing applies, landlords must apply for a licence if they want to rent out their property. This means the council can check whether they are a “fit or proper person” to be a landlord, as well as making other stipulations concerning management of the property and appropriate safety measures. It is possible that thousands of otherwise law-abiding landlords are unaware they are operating in a selective licensing area, and are breaking the rules by not holding a license. Landlords can be forced to pay 12 months’ rent back to a tenant or could be banned from rent a property in future.
Are you in a selective licensing area?
Given the harsh punishments, landlords should find out whether they are in an area covered by a scheme. Landlords can obtain this information by checking with the local council website that a property falls within. Any council can introduce a scheme if it is satisfied there is a problem with low housing demand or where there are significant and persistent problems of antisocial behaviour.
What must landlords do?
If you find out you are in a selective licensing area, your council will have an application form to apply for a licence. The fees for this can vary. The council may want to see copies of safety certificates and to know the location of smoke and carbon monoxide detectors, as well as details of your tenants and tenancy agreements.
The licence must be held by someone who is involved in the day-to-day involvement of the property and lasts five years.
How does selective licensing differ from other forms of licensing?
There are other types of property that require a licence, even if they are not in a selective licensing area. These include large HMOs (houses of multiple occupation, where several unrelated tenants live together) that fulfil certain criteria. Smaller HMOs may also require a licence depending on the area, so check with your council. If you need a mandatory HMO licence, you will not need a selective licence too.
Are any properties exempt?
Some properties are exempt from selective licensing. These include:
- Holiday lets
- Business premises
- Student premises where the university is the landlord/manager
- Premises where the tenant is a family member
What happens if you breach your licence?
- You could be prosecuted
- You could face a civil penalty of £30,000
- You could face a banning order
- Tenants may apply for a Rent Repayment Order of up to 12 months rent