This guidance is applicable for England; similar schemes operate in Scotland and Wales but local guidance should be sought on these.
There are three types of property licensing, a brief overview of each type is detailed below:
Mandatory licence for a house in multiple occupation (HMO)
This type of licence is required for properties let to five or more people of two or more households (i.e. no family connection between two individuals), where occupants share facilities such as a kitchen and bathroom.
There are also other more complex forms for this type of licence.
This type of licencing applies across England with no regional variation.
Additional HMO licence
Some councils have chosen to implement a scheme for smaller HMO’s to require a licence. These are properties of three and/or four people (dependent on the council), where there are two or more households and the occupants share facilities.
Some councils have requested that all properties across a borough that fit this description are licensed, others only licence properties in certain areas or with a certain physical characteristic, for example being located above commercial premises.
There is huge variation in this type of licence across England, so the local council websites should be consulted.
This type of licence is required depending on the location of a property. The number of occupants, households and property features have no impact on the licence requirement.
This type of licensing is usually applicable in towns and cities and is introduced following consultation to ensure any or all of the following points are addressed:
- Anti-social behaviour is dealt with effectively.
- Tenants’ health, safety and welfare are safeguarded.
- Landlords are ‘fit and proper persons’ or employ agents who are.
- Adequate property and tenancy management arrangements are in place.
- Accommodation is suitable for the number of occupiers.
- All landlords and managing agents operate at the same minimum level of professional standards.
As with additional licensing there is huge regional variation so local council websites should be consulted.
How much does it cost?
Costs for licences have a large amount of regional variation so local council websites should be consulted for guidance on the cost of the licence.
As a landlord you should also be aware that some of the licenses place additional works and safety requirements on landlords. Examples of some of the further works include electrical fixed wire testing, portable appliance testing, installation of mains powered smoke alarm, adequate fire protection and a professional floorplan.
Countrywide offer a service to make a licence application on your behalf, please do contact your local branch for details on the service and the costs.
What if a property is let without a licence?
If a property is let without the required licence application being complete, there are very strict penalties that can be imposed. These include, but are not limited to:
- Prosecution by the council leading to a criminal record, a fine of an unlimited amount as well as paying court costs.
- The council can issue a civil penalty of up to £30,000 for each offence.
- Rent Repayment Order - up to 12 months rental income can be reclaimed by the council or the tenants.
- You will also be unable to serve a Section 21 notice to terminate the tenancy and gain possession of the property.
We therefore advise all clients that a licence should be in place or an application submitted, prior to a let or upon introduction of a new local licencing scheme. Landlords can receive ongoing advice and support on changes to this legislation by taking out our regulation checking service, detailed in our terms of business.