Landlord licensing: What is it and how could it affect you?

 

Liverpool is the only city in the country to run a compulsory Landlord Licensing scheme, but other areas are subject to selective licensing, too.

Since 2006, local authorities have had the power to enforce a selective licensing scheme in their area, typically if there is a problem with low housing demand or where antisocial behaviour is an ongoing and serious issue – but thousands of law-abiding landlords are unaware that they exist, according to experts.

There is no comprehensive, country-wide list of areas that are affected by the selective licensing, so landlords must check with their individual council to see if they are affected.

What are the rules?

Where an area is covered by the scheme, landlords must submit an application to obtain a licence, with fees payable of around £400 – depending on the area – and the local authority may request proof of safety certificates, existing smoke and carbon monoxide detectors, and tenancy agreements.

Some of the areas operating a selective licensing scheme include certain parts of Blackburn, Blackpool, Gateshead, Middlesbrough, Peterborough, Salford, Stoke-on-Trent and Wolverhampton, as well as parts of London including Croydon and Brent.

Landlords who break the rules can face hefty fines. “The punishments can be very high,” said Richard Tacagni, founder and managing director of London Property Licensing. “Landlords can be forced to pay 12 months’ rent back to a tenant, or could be told that they are unable to rent out a property in future.”

There are exceptions, such as holiday lets, business premises, student accommodation owned by the university, and properties where the tenant is a relative of the owner.

And houses of multiple occupancy (HMOs) fall under their own bracket of licensing, although owners of small HMOs should still check with the council.

What about Liverpool?

In Liverpool, all private landlords must apply for a licence for each property they rent out. The first level of application involves taking a “fit and proper person check” online – at a cost of £50 – followed by a submission for each property requiring a licence – £400 for the first property, followed by £350 for each additional property.

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The licences last until 31 March 2020, unless there has been evidence of poor property management in the past, in which case they might be issued for a shorter length of time. According to Liverpool City Council, the scheme will “weed out bad landlords“.

“If someone cannot meet the ‘fit and proper’ landlord criteria the scheme sets out, they will be refused a licence,” it says on its website. “Bad landlords who do not invest in their properties or manage them properly will move out of the market, making Liverpool an attractive prospect for good landlords.”

Since the scheme was introduced in 2015, 38,000 licences have been granted, but 6,500 unlicensed properties across the city have been reported.

Speaking after a recent court case which involved the prosecution of a landlord who’d failed to stick to the licensing rules, Cllr Frank Hont, cabinet member for housing, said: “It is important that private rented properties comply to minimum standards in relation to safety and property management.

“There are many good landlords who have come on board with licensing and by pursuing those who don’t, the council seeks to ensure a level playing field. This is part of our ongoing drive to raise standards in the private rented sector.”

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Landlord licensing: What is it and how could it affect you?

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