What is Selective Licensing?

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Selective licencing is a licencing process that requires all private landlords to licence any privately rented property in a designated area. This process was introduced in Part 3, Section 80 of the Housing Act of 2004, and remains active today.

Currently, local governments have the authority to implement selective licencing of privately
leased properties in order to address issues in their governed areas, or sections of them,
caused by low housing demand and/or considerable anti-social behaviour.

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Selective Licensing criteria

Prior to the implementation of a licencing system, local residents, landlords, and tenants (as well as anybody else who may be affected by the selective licencing designation) must have been consulted. Landlords who rent out properties in a selective licencing region must obtain a licence from the local authorities for each of their properties.

Selective licencing is granted if an area meets one or more of the following criteria:

  • There is a low demand for housing (or is likely to become such an area)
  • There are substantial and ongoing issues created by anti-social behaviour
  • The property is deteriorating
  • The area has high migration rates
  • The area is subject to a high level of deprivation
  • The area has high crime levels

The designation period is five years and incentivises landlords to ensure the licenced premises become safe, satisfy basic standards, and are managed to a satisfactory level, as determined by the council. To obtain a licence, the landlord or managing agent pays a fee set by the local council.

Additionally, the licencing may also have the following effects:

  • Increase the demand for houses
  • Make people want to live in the region for a longer
  • Reduce the amount of time properties remain vacant, boosting landlords'; rental income
  • Increase property value as the area improves
  • Reduce criminal activity and antisocial behaviour
  • Improve the management level of rented properties
  • Improve the area’s sustainability

Can a Selective Licence be revoked?

Licenses may be withdrawn if any of the following conditions are met:

  • There has been a major or persistent violation of a licencing requirement
  • The licence holder is no longer a fit and proper person
  • The property develops structural issues

What is the result of non-compliance?

If the landlord fails to licence a propertyt, or the property violates the regulations of the licensing, the landlord could face a variety of penalties. While these penalties may differ amongst local councils, they usually include:

  • Fines upon conviction
  • A civil penalty of up to £30,000 instead of prosecution
  • Giving the landlord a Rent Repayment Order (RRO) for the time the property was rented out and unlicensed
  • Issuing the landlord a banning order
  • Preventing the landlord to serve a Section 21 Notice during the unlicensed period

Understand how to become compliant with selective licensing

As a landlord in a selective licensing area, you must understand your responsibilities, or risk
facing serious consequences. To prepare for your property for inspection related to the licensing process, or to seek expert advice on any difficulties or worries you may have related to selective licensing, get in touch with AST Assistance. Having helped many landlords to understand their duties and comply with selective licensing regulations, we can
take the stress away from you.

Get in touch with our friendly and knowledgeable team by calling 01706 619 954, emailing
info@ast-assistance.com, or filling out our contact form here.

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