Private Rented Property Licensing
Some solicitors will remember the days when the Rent Acts were in full force. It was impossible to let a house without the tenant becoming “protected”, and the rent being controlled. This was largely the result of legislation of various Labour governments. The advent of Margaret Thatcher changed that. The Housing Act of 1980 introduced Protected Shorthold Tenancies. This brought a free market into the letting of houses by private landlords. Henceforth it was possible to let a dwelling for a short term without the rent being controlled, or the tenant being protected. The tenancy agreement did what it said on the tin. The tenant had to pay the rent specified and leave at the end of the term.
Successive governments extended this, and you now have the Assured Shorthold Tenancy. This can be a periodic tenancy with a minimum fixed term The state does have some say in imposing minimum repairing terms on landlords, and compelling them to come up to certain health and safety standards. There is however a large tenancy market in which landlords and tenants can bargain freely. Regulation has been kept to a minimum.
There is however the start of a new sort of regulation. The Housing Act 2004 allowed local authorities to designate certain areas as subject to selective licensing. In those areas the authority is able to insist that a landlord obtains a licence from them before letting his property. A fee has to be paid for the licence, which will be subject to conditions. Two local authorities which have embarked on this are the London Borough of Newham and Waltham Forest Council.
There are penalties for failing to register. Landlords can be fined up to £5000 for every breach, up to a maximum of £20,000. The council may also be able to take control of the property from the landlord by a Management Order. If the property is unlicensed the landlord will not be able to serve a notice on their tenants under S21 of the Housing Act 1988, which will frustrate the removal of tenants.
All this gives the local authority a good deal of control. The licence holder will have to demonstrate that he is a fit and proper person, and demonstrate compliance with certain property standards. These include the Housing Health and Safety Rating System, Gas Safety and Electrical Safety Certificates Smoke Alarms etc.
It is likely that more and more authorities will resort to this. It means that if you are buying a property to let you must ensure that the licence is in place if needed. If you have to apply yourself expect delay whilst you battle with the local authority bureaucracy whilst sitting on an empty property.