Sim Sekhon explains the latest rules on landlord licensing

It would be very satisfying to state, categorically, the situation for all landlords with regards to licensing. It would, however, be very tricky to do and probably out of date within a few weeks. At the start of April, the rules change again. What’s more, councils using selective licensing can change their requirements at will. Landlords simply have to stay aware of what is happening both nationally and in their local area.

It is possible, however, to explain more about the situation in general terms and to clarify information about the different types of licences. Hopefully, this will prove beneficial to those landlords, mostly in the buy-to-let business, who haven’t yet got a grip on the current licensing rules or those who don’t even realise they might need a licence. They’ll need to get up to speed because local authorities appear to be on a mission to improve standards in the private rental sector and see selective licensing as part of their armoury.

Mandatory licensing

Although previously only applicable to large HMOs, from April, mandatory licensing will apply to houses in multiple occupation regardless of the number of storeys. There is a 6-month grace period for landlords to comply.

Effectively the definition of an HMO becomes a property occupied by five or more persons in two or more households which share bathroom or cooking facilities.

Included within the changes are new rules on minimum dimensions for rooms used for sleeping, and maximum occupancy in terms of numbers of adults and children for each room.

A special category of licensing – Additional licensing – can be used where a local authority believes mandatory HMO licensing is insufficient to ensure acceptable standards.

Licences vary in cost and duration, but the outlay can be several hundred pounds. Fines for breaches can be up to £20,000.

Selective licensing

The term ‘selective’ reflects the local authorities ability to specify a range of conditions. For example, they may apply selective licensing in one part of their borough, while landlords whose properties lie in another area remain exempt. The only way to be sure is to check the local situation.

Councils operating selective licensing expect landlords to prove themselves ‘fit and proper’ and to adhere to various conditions around management of the property and health and safety. What’s more, the details, costs and penalties can vary widely from one local authority to another.

With considerable political focus on housing and housing standards, more and more councils are imposing selective licensing. About one in five currently operate such schemes, which for most landlords already fully compliant with their legal obligations, represent extra cost and administrative complexity.

Although no one can, surely, object to a requirement for landlords to be fit and proper and to observe all health and safety regulations, there is already legislation to cover this. There remains a question of what selective licensing actually achieves and whether the extra checks councils undertake cost the sums being passed on to landlords.

Later in the spring, MPs will be looking at the effectiveness of selective licensing schemes, a move which suggests that a nationwide scheme is something that cannot be ruled out. I can’t see this happening, but I’m well aware that most councils have stretched budgets. Will some be tempted to choose selective licensing as a means of boosting their coffers rather than addressing the few landlords who offer poor standards?

As usual, it’s a case of keeping your eyes open and trusting the industry’s trade bodies to stick up for the fair and decent buy-to-let landlord.