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Selective licensing

This content applies to England

Selective licensing schemes for privately rented housing.

Local housing authorities have the power to introduce selective licensing schemes in relation to privately rented housing that is not a house in multiple occupation (HMO) in a particular area. Selective licensing is available only where the authority believes that it would reduce or eliminate specific housing problems.

For information about the licensing regime for HMOs see the section on HMO licensing.

Designation and consultation

An authority may designate either the whole or a part of its district as subject to selective licensing of residential accommodation.[1] Properties let by local authorities and private registered providers of social housing (PRPSHs) are exempt from the licensing requirements.

Before making a decision to introduce selective licensing the local authority must:

  • consult with those who are likely to be affected, including those who live, work or operate businesses in adjoining local authority areas where they will be affected[2]
  • consider whether there are other effective methods of achieving the intended objective.[3]

The authority has a wide discretion as to how the consultation process of persons likely to be affected by the designation is carried out; the nature and extent of its duty to consult is to take 'reasonable steps to consult', rather than 'all steps' or 'all reasonable steps' to consult every person likely to be affected, as long as the consultation is widely publicised using a variety of channels of communication.[4]

Department for Communities and Local Government (DCLG) non-statutory guidance explains the criteria for making a selective licensing scheme.

Approval by the Secretary of State

A decision to designate an area subject to selective licensing must be approved by the Secretary of State, unless they fall under general approval.[5]

Local authorities are allowed to designate an area for selective licensing without the Secretary of State's approval, provided there is a minimum 10-week consultation period.[6] A general listening and engagement exercise does not constitute consultation for this purpose. The 10-week period will not commence until the local authority produces a draft proposal identifying what is to be designated and its consequences.[7]

With effect from 1 April 2015, general approval is given for selective licensing scheme which would:[8]

  • cover less than 20 per cent of the authority's area, or
  • affect fewer than 20 per cent of privately rented homes in the authority's area.

Schemes which do not meet both of these conditions will require consent from the Secretary of State.

Selective licensing can come into force no earlier than three months after the designation has been approved or it falls under the general approval.[9]

Requirements before scheme can be introduced

With effect from 27 March 2015, in order for a local authority to introduce a selective licensing scheme it is requirement that the area has a high proportion of property in the private rented sector let under assured tenancies (including assured shorthold tenancies) and licenses. The private rented sector does not include properties let by PRPSHs.[10]

DCLG guidance advises that a high proportion means more than 19 per cent. This figure is based on the English Housing Survey 2013/14 and local authorities are advised to consult the latest available English Housing Survey.[11]

In addition, it also a requirement that one of the following conditions must be met. The local authority's area:

  • is an area of low housing demand[12]
  • has a significant and persistent problem of antisocial behaviour[13]
  • has a significant number of privately-rented properties in a poor condition[14]
  • is experiencing an influx of migration. Migration refers to movement within the country or from overseas[15]
  • has high levels of deprivation[16]
  • suffers from a high level of crime.[17]

Each condition is considered in some detail in the DCLG guidance.[18]

Conditions of granting a licence

Before granting a licence, the authority must be satisfied that:[19]

  • the proposed license holder is a fit and proper person and is the most appropriate person to hold the licence
  • the proposed manager of the property (if different from the licence holder) is a fit and proper person
  • the proposed management arrangements are otherwise satisfactory.

The tests for being a fit and proper person and of satisfactory management arrangements, although in a different section of the Housing Act 2004,[20] are the same as for the licensing regime for HMOs - for more information see Applications.

Even when all the conditions above are satisfied, the granting of a licence and its precise terms and durations is discretionary.

Breach of planning control

An authority is entitled to take into consideration the planning status of a dwelling when deciding whether or not to grant a licence and when considering the terms of that licence - in a case where a landlord had applied for a licence for a property that he had converted to residential use without planning permission, the authority was entitled to refuse the licence, or to grant it for a limited period of time so to allow the landlord to resolve the planning issue and then reapply.[21]

Conditions of licence

Licenses are non-transferable. A new licence must be applied for if the licence holder ceases to be involved in the management of the property.

Mandatory conditions

The following are mandatory conditions that must be attached to every licence:[22]

  • the production of a gas safety certificate (if there is a gas supply to the house)
  • keeping any electrical appliances and furniture in a safe condition
  • the installation of smoke alarms in proper working order
  • a requirement that the licence holder supplies the occupiers of the house with a written statement of the terms of occupancy
  • a requirement that the licence holder obtains references from persons wishing to occupy the house
  • such other conditions as may be imposed by regulations, eg the provision of Energy Performance Certificates.

Discretionary conditions

The local authority can impose further conditions regulating the management, use or occupation of the dwelling, including:[23]

  • restrictions or prohibition on the use or occupation of particular parts of the house
  • a requirement for the landlord to take reasonable steps to prevent antisocial behaviour by occupiers or visitors.

The Court of Appeal has held that 'management' of the dwelling in this context refers only to 'operational matters' such as who is responsible for its upkeep and does not refer to whether 'facilities and equipment' are provided. A local authority could not, for example, require provision of carbon monoxide detectors in the conditions of a selective licence. However, where facilities such as carbon monoxide detectors were present it can require, as part of its ability to specify conditions around the management of the dwelling, the licence holder to specify whether the landlord or tenant is responsible for their functioning.[24]

Licence duration

Licences can be granted on properties for a maximum of five years.[25] A local authority can have a policy that says it will consider matters relevant to the question of whether a landlord is a fit and proper person in deciding the duration of the licence to be granted to any individual landlord. However, the extent to which such matters are relevant will depend on the facts of the individual case.[26]

Revoking of licence

Licences may be revoked:[27]

  • where there has been a serious breach or repeated breaches of a condition of the licence
  • the license holder is no longer a fit and proper person
  • the property becomes structurally defective.

Sanctions

Where a property should be but has not been licensed, or a license has been obtained but its conditions are breached, a range of sanctions may be available:

A tenancy granted by a landlord who has committed an offence relating to the licensing of a property will be a lawful tenancy.[33] The tenant’s obligation to pay the rent is binding, and to terminate the tenancy a landlord must follow the lawful procedure for ending the type of tenancy granted. For information about whether a confiscation order under the Proceeds of Crime Act 2002 can be made if the landlord is convicted of an offence see Offences and enforcement.

Appeals

In all cases where there is a right of appeal, the appeal is to the First-tier Tribunal (Property Chamber).[34] All appeals must be made within 28 days of the notice of the decision.[35]

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] s.80 Housing Act 2004; R (on the application of Southern Landlords Association) v Thanet DC [2012] EWHC 3187 (Admin).

[2] s.80(9) Housing Act 2004; R (on the application of Regas) v Enfield LBC [2014] EWHC 4173 (Admin); p.13 Approval steps for additional and selective licensing designations in England, DCLG, February 2010.

[3] s.81(4) Housing Act 2004; R (on the application of Rotherham Action Group Ltd) v Rotherham MBC [2015] EWHC 1216 (Admin).

[4] R (on the application of Croydon Property Forum Ltd) v Croydon LBC [2015] EWHC 2403 (Admin).

[5] s.82 Housing Act 2004.

[6] see paras 3-5 Housing Act 2004: Licensing of houses in multiple occupation and selective licensing of other residential accommodation (England) General Approval 2015.

[7] R (on the application of Regas) v Enfield LBC [2014] EWHC 4173 (Admin).

[8] para 6 Housing Act 2004: Licensing of houses in multiple occupation and selective licensing of other residential accommodation (England) General Approval 2015.

[9] s.82(8) Housing Act 2004.

[10] art 3 Selective Licensing of Houses (Additional Conditions) (England) Order 2015 SI 2015/977.

[11] para 5 Selective licensing in the private rented sector: A guide for local authorities, DCLG, March 2015.

[12] s.80(3) Housing Act 2004.

[13] s.80(6) Housing Act 2004.

[14] art 4 Selective Licensing of Houses (Additional Conditions) (England) Order 2015 SI 2015/977.

[15] art 5 Selective Licensing of Houses (Additional Conditions) (England) Order 2015 SI 2015/977.

[16] art 6 Selective Licensing of Houses (Additional Conditions) (England) Order 2015 SI 2015/977.

[17] art 7 Selective Licensing of Houses (Additional Conditions) (England) Order 2015 SI 2015/977.

[18] paras 12–37 Selective licensing in the private rented sector: A guide for local authorities, DCLG, March 2015.

[19] s.88(3) Housing Act 2004.

[20] s.89 Housing Act 2004.

[21] Waltham Forest LBC v Khan [2017] UKUT 153 (LC).

[22] Sch.4 Housing Act 2004.

[23] s.90 Housing Act 2004.

[24] Brown v Hyndburn BC [2018] EWCA Civ 242.

[25] s.91(4) Housing Act 2004.

[26] Waltham Forest LBC v Reid [2017] UKUT 396 (LC); Waltham Forest LBC v Khan [2017] UKUT 153 (LC)

[27] s.93 Housing Act 2004.

[28] s.95 Housing Act 2004.

[29] ss.95, 95(6A) and 249A Housing Act 2004, as amended by s.126 and Sch.9 Housing and Planning Act 2016.

[30] ss.96 and 97 Housing Act 2004, as amended by s.50 Housing and Planning Act 2016 with effect from 6 April 2017 under Housing and Planning Act 2016 (Commencement No. 5, Transitional Provisions and Savings) Regulations 2017 SI 2017/281.

[31] reg 3 and Sch Housing and Planning Act 2016 (Banning Order Offences) Regulations 2018 SI 2018/216.

[32] s.98 Housing Act 2004.

[33] s.96(3) Housing Act 2004.

[34] Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 SI 2013/1169; First-tier Tribunal and Upper Tribunal (Chambers) (Amendment) Order 2013 SI 2013/1187; Tribunal Procedure (Amendment No. 3) Rules 2013 SI 2013/1188.

[35] Part 3 Sch.5 Housing Act 2004.

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