Property Licensing - Just an Additional Expense?

From time to time, we come across landlords who are renting or looking to rent their properties but have failed to acquire the appropriate licence. The most common rationale we hear is that they were unaware of such requirements. Whilst this may be the case, this will sadly not prevent a local authority from prosecuting a landlord for this mistake. Furthermore, the landlord will not be able to rent their property in particular instances should the appropriate licence not be in place.

Mandatory Houses in Multiple Occupancy (HMO) licensing came into force initially in 2006. Prominently to crackdown on rogue landlords providing properties that had health or anti-social behaviour risks. Subsequently local council boroughs have rolled out Mandatory HMO licences nationwide for any property with 5 or more individuals that are not related. There is also Selective and Additional Licensing to be aware of which may also impact how a property can be rented.

It is ultimately a landlord’s responsibility to understand whether a licence is required and to ensure that the property is fully compliant for letting.

We recommend the following tips to assist landlords:

• Check your local council’s website to see what licensing schemes are in place and if any are upcoming for consultation or implementation. Please note that each council may have different licensing requirements.

• Ensure that the property has the correct certification before applying for a licence. For example, this can include gas certificate, EPC, PAT, EICR, Emergency Lighting, Fire Detection and Alarm Certificate and Risk Assessments. For HMOs please see our earlier blog post here.

• A prerequisite of the licence is to provide your mortgage lender’s details as well as any interested parties. For instance co-owners of the property or holding company.

• Ensure that the property is in good repair and adhere to putting in fire extinguisher, blankets in as standard.

• Check whether you need a Selective, Additional or Mandatory licence. In many boroughs, you may not need any licence at all.

• Be prepared to attend a landlords accreditation course as by way of a condition of the licence being issued. Many councils also provide licence fee discounts for accredited landlords.

• It is an offence to rent out any property to tenants without a licence. If a property is not licenced, a landlord could be fined up to £30,000 and could lead to a prosecution.

Overall, a property licence could be the necessary permission to rent a property. Therefore, it should be seen as ‘the cost of business’.

If you would like advice on licensing, please do not hesitate to contact us.