Selective Licensing

Understanding selective licensing

Understanding property licensing is not an easy task - we know that and we've been using the legislation since in came into force in 2006!

We realise most people don't have time to read all the detailed legislation - life is just too short. So we've decided to summarise the main details to make life a bit easier for you.

So isn’t property licensing restricted to Houses in Multiple Occupation (HMOs) - surely a house or a flat rented to a single family doesn’t need to be licensed, or does it?

Well, it depends on where your property is located. Under mandatory HMO and additional licensing, the licensing schemes are limited to certain HMOs.

But with selective licensing the rules are different. With eight London Boroughs already running selective licensing schemes (as of November 2016) and more schemes on the horizon, this is something all landlords and letting agents need to be aware of.

Part III of the Housing Act 2004 gives councils the power to implement a selective licensing scheme covering almost all private rented properties within a defined geographical area. We will try and explain some of the key points.

Which properties does a selective licensing scheme cover?

It depends on exactly how the council has drafted the scheme designation. Some schemes cover the whole borough whereas others only cover smaller geographical areas.

Most private rented properties that fall within the scheme boundary will need to be licensed by the council – not just HMOs. Failure to comply is a criminal offence that could result in prosecution in the Magistrates Court.  So it is important you get this right.

Which councils have introduced selective licensing?

There is no central directory of property licensing schemes so you will need to contact your local council or search on their website. Unfortunately, we’ve found some council websites much more difficult to navigate than others, so do contact your local council if you are still unsure.

Of course if your property is in London, we’ve done all the hard work for you! As of November 2016, selective licensing had been introduced in eight London boroughs (almost 25%) - Barking & Dagenham, Brent, Croydon, Harrow, Newham, Southwark, Tower Hamlets & Waltham Forest. To find out about the licensing schemes in your area, click on the ‘Select Borough’ link above to choose the borough you are interested in.

Can any council introduce a selective licensing scheme?

A selective licensing scheme can only be introduced if the council is satisfied that there is a problem with low housing demand or where there are significant and persistent problems of Anti Social Behaviour (ASB). Given the exceptional levels of housing demand in London, schemes are normally introduced to tackle ASB.

When assessing ASB, government guidance says that councils should consider crime, nuisance neighbours and environmental crime and then assess whether landlords are failing to take appropriate action to help resolve the problem.

The law states that any decision to implement a selective or additional licensing scheme must be consistent with the council’s housing strategy and must be part of a coordinated approach for dealing with homelessness, empty homes and anti-social behaviour.  The council must be satisfied that there are no other courses of action that might provide an effective remedy and that the introduction of a licensing scheme will significantly assist in dealing with the problem. So there is a lot of evidence that the council will need to collect before it can introduce such a scheme.

Under new regulations introduced in March 2015 (the Selective Licensing of Houses (Additional Conditions)(England) Order 2015), councils have been given wider powers to implement selective licensing schemes in areas containing a high proportion of private rented properties. Councils must also satisfy one of four new criteria around poor housing conditions, migration, deprivation or crime. Whether any London boroughs decide to use these new wider powers is yet to be seen.

Councils can implement a selective licensing scheme provided it meets all the requirements in the Housing Act 2004 and they have consulted with everyone affected by the designation for a minimum of 10 weeks. Under new rules that came into force on 1 April 2015, any selective licensing scheme that covers more than 20% of the area or 20% of private rented homes can only be introduced with specific Government approval.

What are the statutory exemptions?

You do not need a selective licence if:

  • The property is an HMO that already requires a licence under a mandatory HMO or additional licensing scheme;
  • The tenancy or licence has been granted by a registered social landlord under Part I of the Housing Act 1996;
  • The property is subject to an Interim or Final Management Order under Part 4 of the Housing Act 2004 (i.e. the council have taken over the management of the property)
  • The property is covered by a temporary exemption notice.
  • The property is occupied under an exempt tenancy or licence, as defined in the Selective Licensing of Houses (Specified Exemptions) (England) Order 2006.

Whilst not a complete list, examples of some of the exempt tenancies or licences include:

  • Any property subject to a housing prohibition order;
  • Certain tenancies associated with business premises, Licensing Act 2003 premises, agricultural land or agricultural holdings;
  • Buildings managed by a local housing authority, police or fire & rescue authority or a health service body;
  • Buildings already regulated under certain other statutory provisions (Schedule 1 to SI 2006 Number 373)
  • Certain student halls of residence;
  • Holiday homes; and
  • Buildings where an occupant shares any accommodation with the landlord or a member of the landlord’s family. 

Hopefully this has given you a useful overview of selective licensing. Remember, this is not legal advice and you may want to refer to our disclaimer below.

If you are still unsure what it all means, you may want to contact your local council, seek independent legal advice, or contact us for further information, advice and support.

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