A selective licence is a licence that a local authority can introduce in order to tackle problems in particular areas of the country, caused by poor housing conditions, low housing demand, significant and persistent problems caused by anti-social behaviour, high levels of migration, high levels of deprivation and/or high levels of crime.
I am a landlord. Do I need to apply for a selective licence?
Selective licensing in certain boroughs and wards in England place requirements upon landlords to apply for such licences, pursuant to Part 3 of the Housing Act 2004. As recently as 24 September 2023, certain wards in the London Borough of Merton have introduced such a requirement. Houses and flats in selective licensing streets must meet certain licence conditions including minimum standards in housing conditions, the way they are managed, used and occupied. Landlords may not be aware of the particular ward within a borough in which their property is situated, especially if they happen to live in a different ward, borough, city or even country and may therefore be in breach of this new requirement.
Why do I need a selective licence?
Selective licensing can be put in place by local councils to support various strategic aims by improving housing conditions and property management, raising professional rental standards, tackling landlords operating unlawfully and reducing the incidence of tenant exploitation.
There is a separate licensing scheme for Houses in Multiple Occupation (HMO), however selective licences will apply to properties regardless of how few people reside there. If a landlord does not apply for a licence for each of their properties within a selective licensing area, then they will not be able to serve a valid Section 21 notice. As previously highlighted here, Section 21 notices may soon be a thing of the past. However, until any new law is passed, it is important that landlords pay close attention to requirements such as selective licensing before serving a Section 21 notice.
Pursuant to section 98 of the Housing Act 2004, a landlord must be able to show that they have applied for a selective licence if their property is situated in a ward that requires such a licence. If the application is not made before the date on which the Section 21 notice is served, then any claim made on the basis of this notice will not succeed – and will lead to significant delay and cost.
What is the penalty for not having a selective licence?
Without a licence, landlords face the prospect of prosecution and a fine or civil penalty of up to £30,000, a banning order under Regulation 3 of the of the Housing and Planning Act 2016 (Banning Offences) Regulations 2018 Si2018/216 or potentially a rent repayment order for the period in which the property was unlicensed when it should have been licensed.