Rental properties don’t always need a licence, but the requirement can be introduced by local authorities at any time. And if it is, landlords need to act quickly. The consequences of failing to hold the correct licence or comply with its conditions are serious – youcould see your property hit with a dawn raid and receive penaltiesof tens of thousands of pounds.
Regulations covering privately owned buy-to-let properties can be dizzyingly complicated, not least because local authorities have a lot of discretion when it comes to enforcement. But it’s not just discretion on the application of national legislation: the requirement to have a licence for a single-family dwelling differs from council to council and even within specific locations of one council’s remit.
As well as having a lot of discretion, councils have a lot of powers to enforce the rules they choose to apply. If they suspect a landlord doesn’t have the correct licence for the type of property or isbreaching the terms of the licence they do have, dawn raids, instant penalties and criminal prosecutions are all tactics councils can – and do – use.
To complicate matters further, local housing authorities can introduce the requirement for selective licensing for single-family dwellings at any time. They do have poorly advertised ‘consultations’, but even when the scheme is introduced, councils don’t advertise it widely – landlords are just expected to know.
The upshot is that landlords operating perfectly legally one day could find themselves open to criminal prosecution the next, without even realising the rules have changed.
And the worst part? Ignorance is not a defence. Any breaches of the Housing Act 2004 and all the regulations and legislation it givesrise to are strict liability offences. This means that the second a breach takes place, a criminal offence has been committed and can be prosecuted by the council.
Why does the local authority have so many powers over landlords?
The powers of councils when it comes to prosecuting and fining landlords originate in the changes made to rental regulations by the Housing Act of 2004.
The 2004 Act handed councils the authority to assess hazards in rental properties (using the Housing Health and Safety Rating System, or HHSRS), take enforcement action and recover all associated costs. It also gave them the power to introduce selective licensing for all rental properties within a designated area if it metone or more of a set of wide-ranging conditions.
The Housing and Planning Act 2016 extended the powers of councils even further. Until 2016, landlords who breached any relevant regulations could find themselves hauled in front of a magistrate in a criminal prosecution. But the Housing and Planning Act gave local authorities the power to directly impose financial penalties as an alternative to prosecution – and keep the cash.
As a result, local authorities have a series of discretionary powers and assessment tools that can be applied by enforcement officers as they see fit, with the penalties they hand out running into tens of thousands of pounds and going directly into council coffers.
How do I know which rules apply to my property?
The confusion over whether, or what, licence is required is compounded by the rules for Houses of Multiple Occupation. The Management of HMOs (England) 2006 Act introduced a legal requirement for some HMOs to be licensed by the local authority and gave them the power to prosecute or fine landlords who breached any of the applicable regulations. But again, the rules on what constitutes an HMO are far from easy to understand.
There are three types of licence: selective licensing, which any local authority can introduce for every rental property in a specific area;mandatory HMO licensing, for properties with five or more people (including children) from more than one household; and finally, the one that really catches landlords out, additional HMO licensing. This applies in council-specified areas to properties with as few as three people sharing. The implementation of an additional HMO licensing scheme is at the discretion of the local authority.
This additional licensing requirement can mean a landlord renting a property to a couple could inadvertently be operating an HMO if the couple decides to let a friend move into their spare room. The arrangement doesn’t even need to be long-term – if a council suspects an extra person is living in the property, it’s enough to trigger a dawn raid (which is as scary as it sounds).
What conditions do the licences cover?
In keeping with the established theme, the conditions required by a selective licence, additional licence or mandatory HMO licence are a mix of mandatory conditions specified by government and discretionary conditions made up by the council that can vary from property to property. But it’s essential for landlords to be aware that as soon any property licence is formally issued, it is a criminal offence to breach any of the conditions it contains.
Enforcement officers can serve Civil Financial Penalty notices (or take the landlord to court) based on their interpretation of multiple requirements in any set of applicable regulations.
Conditions covered within the licence are lengthy and diverse. They can range from essential fire safety requirements to the amount of noise made by tenants. Outrageously, councils will frequently try to make the landlord responsible for anti-social behaviour (ASB) ‘in the area around the property’ – which is quite a reach when you consider that the ASB complained of hasn’t been controlled by the police or the council itself, with all their training and resources.
What’s more, conditions required by a licence often cite out-of-date regulations or legislation which can directly contradict a requirement of the current piece of legislation, making it impossible to comply and thus creating an automatic criminal offence.
These are not matters that a landlord is trained to spot, leading most to blindly accept the licence conditions and immediately become criminally liable for them – regardless of how absurd or draconian they are.
Once the council issues a ‘draft licence’, it’s essential to act quickly and get expert advice. There’s a very strict time limit for responses, which is usually just 14 days including the time in the postal system. The clock starts ticking as soon as the licence or notice is issued, regardless of when (or even if) it is received.
And as with all regulations established by the Housing Act of 2004, breaches are strict liability criminal offences – pleading innocence because the licence was never received, or the deadline was too short is not a legal defence.
Where can I get advice about compliance with selective licensing and HMO licensing?
If you receive any notice from the local housing authority, whether it’s a draft licence, notice of a breach, notice of intention to impose a financial penalty, request for an interview (which would be under PACE) it may be tempting to call the council to ask for advice. This is akin to calling the police to ask what you should do if you’re arrested for murder: any information you give them is evidence that can be used against you.
The local authority’s role has changed markedly: It is no longer to support landlords, is to enforce regulations. Councils are the now the housing police.
As soon as it becomes apparent a licence is required, or a breach may have occurred, appoint an expert. Keeping abreast of legal and regulatory compliance is a full-time job requiring specialist training and lots of experience.
With any single breach resulting in a penalty of up to £30,000 and a potential criminal record, this is one area where DIY is always a false economy.
Phil Turtle is a certified Housing Health and Safety Rating System (HHSRS) practitioner, certified fire risk assessor and landlord law expert with Landlords Defence.
Landlords Defence has surveyed hundreds of buy-to-lets and HMOsfor landlords and found prosecutable breaches in 98% of the properties. The company successfully negotiates with local authorities on behalf of landlords every day.
