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Your starter for TEN: temporary exemptions to property licensing

Monday, April 10, 2017 - By David Smith & Robin Stewart at Anthony Gold Solicitors

David Smith & Robin Stewart at Anthony Gold Solicitors

There are sometimes situations where a landlord, through no fault of their own, finds themselves falling foul of one of the property licensing schemes created by Part 2 or Part 3, Housing Act 2004. That is HMO or selective licensing. Landlords can commit criminal offences and be liable for fines, civil penalties or repayment of rent. The solution to this problem is the Temporary Exemption Notice, or TEN for short.
 
What is a TEN?
The TEN, as its name suggests, provides an exemption from the need to licence a property for a temporary period of up to three months. They are intended to allow landlords who have unexpectedly found that their property needs a licence a short period of exemption from that requirement so that they can put the situation right.
 
Things a TEN is Not
A TEN is not a get out of jail free card or an alternative to licensing. If a landlord needs a licence then they should seek one. Similarly, a TEN is not a means of avoiding a prosecution for failure to licence. One of the criteria for the granting of a TEN is that the landlord is taking steps to ensure that the property will no longer need licensing and so this puts a substantial limit on its use.
 
What Can I Do with a TEN?
As soon as a valid application for a TEN has been made in respect of a property which requires a licence but lacks one, it is treated as no longer being “unlicensed” until the application has been determined. A landlord can immediately serve a valid section 21 notice. If the TEN is granted, then the property continues to be treated as not requiring a licence. The TEN gives landlord a short window to put the property in a position where it no longer needs to be licensed. This might involve serving section 21 notices or selling the property. This also protects the landlord from prosecutions or rent repayment order for the period of time when the exemption is in force.

Can I get a second TEN after three months?
A TEN can only last a maximum of three months with an extension in exceptional cases only for a further three months. A renewal of a TEN is much harder to obtain. It is only available as a further single extension of up to three months of an original TEN and the local authority should only grant it in "exceptional circumstances". The tribunal has been pretty clear that where the word "exceptional" is used it really means exceptional and so the case for renewal of a TEN will have to be very compelling indeed. The landlord would need to show real progress in procuring that the property concerned no longer required a licence and that there was a small temporary hiccup which was slowing things down. It is important to note that the law only permits one extension to a TEN so the maximum length of any TEN is six months, given in two three month blocks. There is no possibility of second or further extensions.

What are the Criteria for Getting a TEN?
A TEN can only be granted where the landlord notifies the local authority of their intention to take particular steps with a view to securing that the house is no longer required to be licensed.

This might be evicting tenants or reducing the number of occupiers. Since a TEN can only last a maximum of three months with an extension in exceptional cases only for a further three months, any set of actions that are going to take longer than three months are not ones where a TEN is likely to be suitable. Any course of action that will take longer than six months will never be suitable for a TEN.
 
Finally, local authorities are much more likely to grant a TEN where a landlord has found themselves involved in a licensing regime inadvertently. As a tenant will likely be evicted as part of the process a TEN is not likely to be looked on favourably if it is being sought by a landlord who ought to have been aware of a licensing scheme but was simply ignorant. If a person coming into control of a property on the death of a previous owner or the property being let to a single family and the tenant breaching the agreement by allowing other persons to stay there.

What is the Application Process?
There is no fixed process for applying for a TEN and local authorities can be quite variable on this. The local authority will generally need to know what the special circumstances are and they will want to see evidence to support this. Such evidence might be a death certificate of the previous owner, or the contract for sale if the property is being sold. There should be no fee for making this application. The local authority will decide whether to grant a TEN and if they refuse they are required to give written reasons for the refusal.

What can I do if the Local Authority Refuse to Grant a TEN?
If a TEN is not granted there is a right of appeal to the First-tier Tribunal Property Chamber. This appeal must be lodged within 28 days of the refusal of the application. The tribunal make their own decision on the merits of the case and can take into account new evidence which was not available to the local authority. The other option is to  make an application for a licence. Even if the local authority are definitely going to refuse the application, making a valid application achieves the same things as a TEN does, for a short time. If the local authority is slow to deal with the application, this might be enough time for the landlord to solve the issue that has arisen.

If you have any questions and would like legal advice, please contact David Smith, Partner in the Housing team at Anthony Gold. His email is David.Smith@anthonygold.co.uk

Please note that the views and opinions expressed in these guest blogs are those of the author and do not necessarily represent the views of London Property Licensing. These blogs are designed to stimulate discussion and debate within the property industry.

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