COUNCIL LICENSING SCHEMES
Currently, over half of London boroughs are operating additional licensing schemes, likely with more to come and each council decides which HMOs require a license. Trading standards can be quite heavy-handed with issuing penalties and these often fall on inexperienced or first-time landlords, especially those who have not used a regulated agent, and are unaware of the importance and the consequences of non-compliance.
TYPES OF LICENSING SCHEMES:
- Mandatory Licensing
Under the Housing Act 2004 an ‘HMO’ (House in Multiple Occupation) will require a Mandatory License from the Local Authority where 5 or more people from two or more separate households (this can be a family, a couple or a single person) live together in a property with 3 stories, and where they share amenities for washing and cooking.
- Additional Licensing
This is when a local authority imposes a licence on other categories of HMOs in its area which are not subject to mandatory licensing. This can happen if the local authority feels there are problems such as 257 HMOs (where a building has been converted entirely into self-contained flats and less than 2/3rds are owner occupied) or purpose-built flats in a block comprising 3 or more self-contained apartments.
It is a requirement for the licence holder of a licenced HMO (mandatory or additional) to provide:
– An annual gas safety certificate;
– Electrical installation report;
– keep furniture safe;
– ensure smoke and carbon monoxide alarms are fitted and in working order;
– provide written tenancy agreements.
A landlord or managing agent of an HMO must have a separate licence for each property and each licence is valid for maximum of five years. Licences are non-transferable. The fee charged for a licence is set by each local Council.
In order to be granted a license the property must be suitable for occupation and the proposed license holder or the managing agent must be a ‘fit and proper’ person. There is a check made into any prior convictions relating to violence, sexual offences, drugs or fraud. Further checks are made to ensure that the license holder has not been found guilty of any unlawful discrimination or contravened any laws relating to housing, landlord or tenant issues.
- Selective Licensing
A local authority can declare their area subject to selective licensing* if:
– There is low housing demand
– The area is affected by anti-social behaviour
– Landlords have failed to control the behaviour of their tenants
Or
– The local authority wishes to investigate a significant number of rented properties for hazards under the Housing Health & Safety Rating System.
– The area has experienced a recent influx of migration.
– The area is suffering from high deprivation levels affecting tenants.
– The area suffers from a high crime rate, specifically affecting areas of high number of rented properties.
*There must be more than 20% of privately rented property for designation of selective licensing for a whole area.
PENALTIES
Failure to license an HMO; failure to comply with an Improvement Notice; breach of HMO licence conditions; failure to comply with an Overcrowding Notice; and breach of Management Regulations can result in prosecution with an unlimited fine or a Fixed Penalty Notice of up to £30,000.
In addition, a landlord or agent who fails to obtain a license could be subject to a Rent Repayment Order where rent, Universal Credit or housing benefit can be claimed back from the landlord by order of the First-tier Tribunal.
A landlord or agent who breaches the condition of a licence could also be subject to a Banning Order.
Where a landlord or agent receives two or more civil penalties over a 12-month period, local Councils may include that person’s details in the Database of Rogue Landlords and Letting Agents.
You can check your council’s website here:
