New Selective Licensing FAQs
About the consultation
The Housing Act 2004 enables the Council to establish discretionary licensing schemes in its area. As part of the legal process to do this the Council is required to consult with all persons who may be affected by a proposed scheme in the designated areas. This includes residents, tenants, landlords, representatives of landlords and letting agents as well as other any other interested persons. The reasons for proposing a Selective Licensing scheme are explained in the consultation document. Find out more about the proposed scheme.
The law says that we can only run a scheme for 5 years. The current scheme ends on 14 October 2020 so we are consulting on a new scheme.
The consultation runs for a total of 3 months (just over 12 weeks), commencing on 2 December 2019 and ending on 6 March 2020.
If, following the public consultation and consideration of the evidence, the Council's Cabinet decides to implement the Selective Licensing scheme, it would require confirmation by the Secretary of State for Housing, Communities and Local Government. The Selective Licensing scheme would start later in 2020 if it is approved.
About Selective Licensing
The Housing Act 2004 gives the Council the power to make private landlords in its area provide good, safe and well managed private rented property, through a licensing scheme - with the aim of improving housing conditions, management standards and tenancy practices to ensure that private rented homes have a positive impact on the area. Landlords will be required to obtain a licence from the Council in order to rent out a property and the licence will have a set of conditions that the licence holder must follow.
If approved, the Selective Licensing scheme will apply to privately rented homes in the following six wards:
- Central St Leonards
- Old Hastings
The proposed Selective Licensing scheme is intended to address the significant numbers of private rented homes that have poor housing conditions and need inspection to remedy the position. At the end of 2016, an estimated 31.4% of privately rented homes in the proposed area failed the 'decent homes standard', compared to the national average of 25%. Also an estimated 13.9% of privately rented homes contain at least one or more Category 1 hazards, which the Council has a duty to address. There are an estimated 1,000 privately rented homes that fail current housing standards and up to a 1,000 homes that fail below the Band E minimum energy efficiency rating for the private rented sector.
Some parts of the area are suffering high levels of deprivation which affects a significant number of homes. Whilst anti-social behaviour has reduced significantly as a result of the current licensing scheme there are concerns that this position may not be maintained without a further licensing scheme.
The wards in which the proposed Selective Licensing schemes will operate, have been identified and evidenced as being affected by these issues and in accordance with the legislation. Selective licensing can provide additional powers to help the Council tackle poorly managed privately rented property. As approximately 45% of homes in the area are in the private rented sector (compared to the national average of 19%), improved management standards in this sector should contribute to an overall improvement in living conditions in the area. This should lead to a better quality of life for the whole community.
All privately rented homes within the six identified wards unless they hold an HMO licence.
There are a number of circumstances which may mean you do not have to licence a property:
- If it has an HMO Licence (flats within a licensable HMO may still need to be licensed)
- Under a Prohibition Order
- A commercial premise
- Agricultural tenancy
- Owned by a Housing Association
- Owned by a public body, for example NHS, Police and Fire Service
- The building is occupied by students and is controlled/managed by a University/College/Specified Person (who conform to an Approved Code of Practice)
- Is regulated under other legislation such as care homes or HMO's that fall within (Mandatory Licensing)
- A holiday let
- Does not have a tenant at the start date of the designation and remains unoccupied. As soon as they are rented out an application for a licence must be made
- Houses covered by a Temporary Exemption Notice under Housing Act 2004 for example where there is a sale agreed to someone who intends to live in the property themselves or the owner is moving back into the property
- House covered by a Management Order under the Housing Act 2004
- Occupied under a long term lease of over 21 years (leaseholders)
- Houses occupied by the owner and a lodger where the accommodation and amenity such as toilet, bathroom kitchen or living room is shared between the occupier and the landlord/licensor/member of the landlord or licensor's family
- Houses occupied by members of the owner's family. A 'member of the family' is where you live as a couple or one of them is a relative of the other:
- A 'relative' means parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, niece or cousin, with 'half-blood' relationships these are treated as whole blood relationships. Stepchildren are treated as son or daughter. Proof of relationships, e.g. birth/marriage certificates may be required.
The exemptions listed here are covered by law and not a decision made by the Council. For full details of exemptions please refer to The Selective Licensing of Houses (Specified Exemptions) (England) Order 2006.
If the selective licensing scheme is approved following the consultation, all private landlords or their managing agents with residential properties in the proposed area must apply for a licence for each of their properties they rent out within 6 months of the scheme starting. Before a licence is granted certain conditions will need to be met and then maintained, along with other conditions, after a licence is granted (see questions below).
If approved, the proposed licensing scheme will operate for five years. Conditions within the private rented sector will be kept under review to determine whether the licensing scheme should run its course or be revoked before the end of the five years should the scheme objectives be fully met.
The proposed scheme should have a number of benefits for tenants, landlords and the wider community:
- Improving poor property conditions and management of privately rented properties
- Reducing levels of sub-standard living conditions
- Making homes much safer and more secure in the private rented sector
- Encouraging tenants to recognise when properties are of a sub-standard or dangerous condition and what options are available to them
- Improvements to health through better living conditions
- Provide additional protection for assured short-hold tenants in unlicensed properties
- Educating landlords and tenants about their responsibilities and the impact of their behaviour(s) on the local communities and neighbourhoods
- Encouraging more professional landlords
- Protecting and encouraging new investment in the area
- Supporting and advising landlords on property conditions and those who might not necessarily be aware of their responsibilities
- Identifying landlords who may be willing to work alongside the Council's housing options service to enable easier access to private rented sector housing
- Creating good landlord reputations by independent endorsement
- Providing local residents with a more desirable place to live in and enjoy
- A more sustainable and cohesive community
- Less anti-social behaviour
- A better local environment
- Reduction in rogue landlord activity through a "fit and proper person" requirement for landlords and agents
- Resources better targeted and less reactive
About licensing arrangements
The proposed licence fee per property is £470 (VAT exempt). This is divided into two parts. Part A: £331 to cover the cost of the application process and issuing the licence. Part B: £139 to cover enforcing the scheme.
The licence fee must be reasonable and proportionate and total income cannot exceed the cost of the proposed licensing scheme. The fees will be reviewed throughout the scheme and the Council may adjust the fees to reflect changes in costs.
The law allows for the council to recover the full costs of the administration and enforcement of the schemes. However, the fee at the time of making the application can only cover the cost of dealing with the application and issuing the licence. The second part of the fee, for enforcing the scheme, only becomes payable when the Council issues a decision to the applicant stating that licensing requirements have been met to issue the licence. The first part of the fee is payable with the application, and the second part of the fee is payable if the licence application is successful.
The licence holder must be the landlord, or the person who is responsible for managing the property and to whom the tenants pay rent, if different from the landlord.
Licences are specific to the individual dwelling and will specify a named licence holder. A new application will need to be submitted if there is a change in ownership or licence holder.
There are certain conditions which the Council is required to include on each licence and other conditions are at their discretion and dependent on the circumstances of the individual properties. For a comprehensive list of suggested conditions please click here Full list of conditions. The Council may also include the requirement for properties to achieve the minimum Band E energy efficiency rating, which is a legal requirement for all privately rented homes with effect from 1 April 2020.
Selective Licensing requires landlords or their agents to demonstrate they are "fit and proper" and have no criminal convictions which may affect their management of the property. They must also have satisfactory management and financial arrangements, as well as having adequate procedures in place for dealing with problem tenants. Management arrangements will include things such as, making sure the property is safe to live in and issuing the tenant with a written tenancy agreement. As indicated at Q16 above licence holders will also have to adhere to a number of conditions as part of their licence.
If after the scheme has started you don't apply for a licence and continue to rent your property then you will be committing a criminal offence. After 6 months we will be checking to see if everyone has complied. If convicted you could be subject to an unlimited fine with additional penalties should you not take steps to license and the Council can apply for a Rent Repayment Order to claim back any Local Housing Allowance paid to the tenant for up to 12 months.
After the scheme comes into force, you cannot legally evict your tenant (Section 21 Notice), until the property is licensed.
If a licence is issued and the conditions are subsequently breached, this could lead to a fine of up to £5,000 for each breach. Breaching the licence conditions could also lead to the revocation (withdrawal) of the licence and unless a suitable alternative licence holder could be found, the Council may take over the management of the property by issuing an Interim Management Order (IMO).
In most circumstances properties will be inspected after a licence has been issued. When the property is inspected depends on the level of risk associated with the property. A higher risk property will be inspected sooner than a lower risk one. The level of risk depends on previous history, condition, management, etc.
Your current licence will still be valid. If the scheme goes ahead you will not need to renew until your current licence expires.
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