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Licences


Since July 2006 landlords in England and Wales who own larger houses in multiple occupation – properties of three or more storeys occupied by five or more people who live in two or more separate households - have had to apply for licences from their local councils. If they do not do so they could find themselves fined up to £20,000 and unable to collect their rents.

There are three prongs to the HMO licensing process; two involving landlords themselves. First local authorities assess whether applicants are ‘fit and property’ to be HMO landlords and must satisfy themselves about the management standards they will apply. Later, or in some cases more immediately, come inspections to ratify landlord statements that their properties are fit for purpose. As licences state the maximum number of people each property may house, this includes an assessment of the suitability of amenities for the intended number of tenants.

When it comes to management standards, licensed landlords have a duty to take reasonable steps to ensure that tenants are not causing problems within the boundaries of the property through anti-social behaviour. Local authorities may in some instances put conditions on licences concerned with anti-social behaviour.

The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 (available via the website www.opsi.gov.uk) specified minimum amenity standards, setting out the requirements for kitchens, bathrooms and toilets in HMOs. Local housing authorities may use their own amenity standards if they are equal to or higher than the minimum standards. This means landlords should contact their local authorities to confirm the standards to be applied in their own areas.

In the case of properties with insufficient amenities for the number of tenants the landlord wishes to house, local authorities will include conditions within licences stipulating that the required extra amenities must be provided within a specific time. Alternatively they may grant licence for lower maximum numbers of occupants. In some instances they may even conclude that a licence cannot be granted until the condition and amenities within a property are improved.

Selective licensing laws, also introduced by the Housing Act 2004, allow councils to obtain powers to require licensing of all rental properties in specified areas. These are areas where they make a case that selective licensing powers are necessary to improve poor private rented sector standards.

To gain approval for such a licensing scheme, local authorities must demonstrate that the area covered has low housing demand (or is likely to become such an area) with a significant stock of privately owned houses let on short-term arrangements, or the area is experiencing a significant and persistent problem caused by anti-social behaviour and some or all private sector landlords in the area are not taking appropriate action to combat the problem.

Local authorities must show that a licensing scheme would fit in with their overall strategic approach to tackling problems in the local private rented sector, including existing policies on homelessness, empty properties, regeneration and anti-social behaviour. And before selective licensing can be introduced, local authorities must conduct a full and comprehensive consultation with local landlords, managing agents, tenants, residents and businesses on their proposals prior to submitting them.

A growing number of local authorities have sought and obtained selective licensing powers.

As in mandatory licensing, licences will only be issued to ‘fit and proper’ landlords – which means taking into account any previous convictions relating to violence, sexual offences, drugs or fraud; and previous contraventions of laws relating to housing or landlord and tenant issues; and whether the applicant has been found guilty of unlawful discrimination practices.

Licences may include conditions relating to the management, use and occupation of the house. They must contain conditions requiring landlords to provide the local authority with an annual gas safety certificate, requiring electrical appliances and furniture supplied under the tenancy to be kept in a safe condition; smoke alarms kept in proper working order; requiring that occupiers be provided with written statements of the terms of occupation; and that references be required from anybody wishing to occupy the house.

As with mandatory licences, failure to obtain a selective licence can lead to a criminal conviction with a fine of up to £20,000 and will prevent the landlord taking any action in the courts to regain possession of the property.

A copy of the fact-sheet ‘Selective licensing of other residential accommodation’ can be downloaded from the website www.communities.gov.uk. The booklet ‘Landlords: Do you need a property licence?’ can be downloaded from the same website.




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