Selective licensing of privately rented properties
Selective licensing gives us powers to regulate landlords and managing agents of private rented property in areas that suffer from low housing demand and/or high levels of anti-social behaviour.
Our Cabinet approved designations for selective licensing, and the proposals for a new scheme, on 16 September 2020.
An application has now been submitted to the Secretary of State for final approval. We do not have a current time frame for a decision, but if it is approved, we must provide a three-month notice period before any licences are issued and an application process will be published here.
We have been given powers by government (under Part 3 of the Housing Act 2004) to introduce selective licensing schemes for areas of privately rented housing where there is one or more of the following:
- low demand for housing
- a significant and persistent problem caused by anti-social behaviour
- poor property conditions
- high levels of migration
- high levels of deprivation
- high levels of crime
Once a scheme is created, we can't add any new areas to it without consultation and then get approval from either the council or the Secretary of State, depending on the size of the scheme.
The aim of selective licensing is to ensure that private rented properties offer tenants a choice of safe and well managed accommodation and where necessary, raise standards of private rented properties. The benefits to communities can include:
- improved health and wellbeing of tenants - it is recognised that poor housing standards can have a major impact on the health and wellbeing
- improved management practices - landlords who fail to get a licence for a property or who are unwilling to effectively manage their property, can face prosecution, fines or we will take over managing the property
- reduced anti-social behaviour - tenants are made aware of how their behaviour can affect their tenancy and landlords work alongside us to address and reduce anti-social behaviour in their properties
Requirements of landlords
Landlords must apply for a licence for each residential property they rent out in a designated area, and show they have adequate management arrangements in place, follow the licence conditions, and take action to assist with anti-social behaviour in their properties. The licence lasts for five years and if landlords do not obtain a licence or fail to meet any of the licence conditions, they could be fined and/or face prosecution.
Every licence must contain certain mandatory conditions and additional conditions can be applied by local authorities. These are generally:
- mandatory licence conditions (gas safety, electrical appliances and furniture safety, smoke and carbon monoxide detection, tenancy agreements and references)
- conditions around the tenancy management (tenancy deposits, access to property, rent payments and documentation)
- conditions around property management (ensuring the property is safe, secure and maintained, energy performance, and removal of waste)
- conditions around complaints of anti-social behaviour
In addition, the landlord and any other person involved in the management of the property (for example a manager or managing agent) must show they a 'fit and proper person'. This means they are assessed for any:
- offences involving fraud or other dishonesty, or violence or drugs, or any offence listed in Schedule 3 to the Sexual Offenders Act 2003
- any unlawful discrimination on grounds of sex, colour, race, ethnic or national origins, or disability
- any breaches of housing or landlord and tenant law
Licences are expected to be approximately £500 per property which pay for the administration of the scheme and to carry out our licensing functions. The licence fee is payable in two parts, the first on application and the second when the licence is granted. Licences are not transferable between properties.
The law and appeals
It is an offence to let a property within a selective licensing area without a licence. A landlord could face prosecution and an unlimited fine, or a civil fine of up to £30,000 if they fail to obtain a licence or breach of the conditions of the licence.
If we are unable to grant a licence, or have to remove a licence, we may take over the management of the property. A licence can be refused for a property if the landlord does not meet the fit and proper person criteria or cannot demonstrate they have adequate management arrangements in place.
Landlords can appeal through Gov.uk: Solve a residential property dispute within 28 days if they disagree with any of our decisions.
There is normally a range of support available to both landlords and tenants to help make the improvements where necessary. These can include:
- training for landlords on legislation, tenancy management and landlord responsibilities
- training for tenants to help manage a tenancy including budgeting, maintaining a home, waste and recycling and tenant responsibilities
Licensing exemptions include:
- local Housing Authorities or Registered Social Landlords (Housing Associations) tenancies
- holiday lets
- a family member renting the property from the landlord (proof required)
- long lease tenancies (21 years)
- business tenancies
- properties where we has taken action to close the property down
- licensable Houses in Multiple Occupation (HMOs) under part two of the Housing Act 2004
- temporary exemption notices
- empty properties (a licence must be successfully applied for, before a tenant can move into the property)
- if a landlord decides to sell a property or wants to live in it, we can issue a temporary exemption notice for up to three months to ensure the property no longer requires a licence
Former schemes in County Durham
We have had three previous schemes in County Durham in Wembley Easington, Dean Bank Ferryhill and Chilton, and these were evaluated in 2012, 2014 and 2017. The evaluations have been redacted in places to remove personal information:
- Selective licensing
- Selective licensing
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