On 23 December 2024, The Housing Act 2004: Licensing of Houses in Multiple Occupation and Selective Licensing of Other Residential Accommodation (England) General Approval 2024 (‘the General Approval’) came into force in England.
One consequence of the general approval is that it gave local authorities more autonomy to implement larger selective licensing schemes in England which will likely result in more privately rented property owners requiring a selective licence.
Selective licensing
Selective licensing is a licensing scheme implemented by local authorities which requires all private landlords operating within an area designated by the local authority to obtain a licence for any privately rented accommodation. This is a licensing scheme which differs from ‘mandatory licensing’ and is not limited to properties which meet the definition of a licensable House in Multiple Occupation (HMO). Therefore, any privately rented accommodation falling within a designated area will require a licence.
Often the area will be designated as a selective licensing area if there is low housing demand, poor property conditions or high levels of crime and anti-social behaviour in the area. The purpose behind implementing selective licensing schemes is to improve housing conditions within the designated area, making it more desirable for tenants, by ensuring a consistent high standard of management of privately rented properties.
Once a property is identified as requiring a selective licence to operate, the owner of the rented property will need to make an application to the local authority for a licence and pay the application fee. The individual applying for the licence will need to demonstrate that they are a fit and proper person before a licence will be issued.
When a selective licence is issued, it can be valid for a period of up to five years. The licence will include a series of conditions and management responsibilities which the licence holder is obliged to adhere to and they are all targeted to ensure the property is adequately maintained and safe for tenants.
It is a criminal offence to be in breach of selective licence conditions and/or not hold a selective licence in a designated area and any breaches could lead to a prosecution, with an unlimited fine, or a maximum civil penalty of £30,000, for each breach of the conditions. As part of any investigation you could be invited to attend an interview under caution.
The general approval
Prior to the general approval coming into force, local authorities had been unable to implement new selective licensing schemes which cover over 20% of the local authority’s area or over 20% of privately rented homes, without seeking formal approval from the Secretary of State in the Ministry of Housing, Communities and Local Government. This meant the decision to implement larger selective licensing schemes was subject to government scrutiny before a local authority was able to move forward with implementing a larger selective licensing scheme.
The general approval removes the requirement for larger selective licensing schemes to be considered by central government. Therefore, selective licensing schemes covering up to 100% of all private rented homes can now be decided locally, provided they meet certain statutory requirements. The only additional condition imposed within the general approval is contained at paragraph 5 and outlines that a local authority must consult those persons who are likely to be affected for not less than ten weeks.
The impact of the general approval and removal of the lengthy process of seeking central government approval will inevitably result in larger areas being designated by local authorities as selective licensing areas which will impact landlords financially but also place increased responsibilities upon licence holders to ensure they are adhering to the conditions attached to the licence. As a consequence, licence holders will be at risk of enforcement action being taken against them in the event they fail to have robust management procedures in place to have proper oversight over the property.
At Stephensons, we have a plethora of experience in assisting landlords and property managers in relation to local authority investigations pertaining to alleged breaches of selective licence requirements and other licensing schemes including mandatory and additional licensing. Given the prospect of a criminal conviction and/or significant financial penalties, it is imperative that you immediately seek specialist legal advice should you be subject to an investigation by a local authority to determine if you are able to avoid or limit any enforcement action to be taken against you. Call our specialist team on 0161 696 6250 or via our online enquiry form.
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