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Property licensing

In certain parts of the country, landlords are who are renting their property out privately, are being made aware that licensing is being introduced to their area. This could be for a number of reasons and could be for a fixed period, or indefinitely, depending on the type of licence.

It’s important for landlords to understand the different types of licences and the potential costs and fines that could be incurred. We have detailed a brief description below of the 3 licences currently operating in England and although Scotland and Wales do operate a similar schemes, advice should be sought locally.

Mandatory licence for an HMO (House In Multiple Occupation)

This licence is required when the property is let out to 5 or more people, who form 2 or more households and who share kitchens and bathrooms.

Additional HMO licence (House In Multiple Occupation)

There is a huge variation of this licence as it has been introduced by local councils who each have different requirements or who may not require additional licensing at all. We strongly recommend that you contact your local council for advice. These licences are usually required when renting to a minimum of 3 or 4 people, who form 2 or more households and who share kitchens and bathrooms.

Selective licence

Selective licensing was introduced into the private rental sector to address the impact of poor quality private landlords and anti-social tenants. The scheme provides for the regulation of ‘houses’ as defined by section 99 of the Housing Act 2004.

An area may be designated for selective licensing either (i) if the area is (or is likely to be) an area of low housing demand or (ii) the area is experiencing a significant and persistent problem caused by anti-social behaviour and some, or all, of the private sector landlords are failing to take action to combat the problem that it will be appropriate for them to take. A designation can last for 5 years and can be renewed.

What are the costs involved in licensing?

Licences can vary from region to region, so we always recommend that you contact your local council who will advise you of the costs applicable. The application process can be very time consuming and as your chosen agent, we can make the licence application on your behalf for a fee. Please see our fee structure or give one of our team a call to discuss.

What if my property is let out without having a licence?

The penalties imposed on a landlord can be severe and can include:

  • Prosecution by the council leading to a criminal record, a fine of an unlimited amount as well as the need to pay court costs.
  • A civil penalty of up to £30,000 for each offence.
  • Rent Repayment Order resulting in up to 12 months rental income being reclaimed by the council or the tenants themselves.
  • You will be unable to serve a Section 21 notice to terminate the agreement and gain vacant possession.