What is Selective Licensing & How it Affects Landlords in Brent

The new selective licensing scheme launched in the London Borough of Brent on April 1, 2024, represents a significant expansion of landlord regulations aimed at improving living standards for private renters.

This borough-wide initiative mandates that almost all landlords of private rented properties across eighteen different wards of Brent, excluding only the Wembley Park ward, need to obtain a license, ensuring compliance with enhanced standards for property management and safety. Spearheaded by Councillor Promise Knight, the scheme focuses on increasing the quality of private rental accommodations, providing clear guidelines for landlords, and ensuring safety and security for tenants, addressing the urgent needs of the housing sector in London.

What is Selective Licensing?

Selective licensing is a regulatory initiative designed to ensure that rental properties in certain designated areas meet specific standards to improve living conditions.

First introduced as part of the 2004 Housing Act, the Selective Licensing Scheme (SLS) is a form of property licensing for privately rented properties.

Local councils implement this scheme, which applies to properties within areas identified by the council as needing regulation due to issues such as poor housing conditions or high levels of antisocial behaviour.

How does Selective Licensing Work?

Local authorities enforce selective licensing in specific areas where certain conditions are prevalent. These conditions include:

• Declining or anticipated low demand for housing
• Persistent and significant issues related to anti-social behaviour
• Poorly maintained properties
• High rates of migration
• Pronounced levels of deprivation
• Elevated crime rates

This process ensures that all rental accommodations meet specific safety and management standards.

What Are the Requirements to Obtain the License?

When a local authority designates an area for selective licensing, all landlords within that zone must secure a license for each property they rent out, provided the property does not qualify for any exemptions.

To obtain a selective license, landlords must meet mandatory conditions, which commonly include:

• A valid gas safety certificate must be presented annually if the property has a gas supply.
• Ensuring that electrical appliances and furniture provided under the tenancy are safe.
• Maintaining smoke alarms in proper working order.
• Providing tenants with a written statement of the terms of their occupation.
• Obtaining references from prospective tenants.

The process of obtaining a selective license involves a thorough check, including property inspections and a fit and proper person test for the landlord(as per Housing Act 2004, Section 64). This ensures that the landlord can manage the property responsibly.

Landlords must apply through their local council, and the license fees can vary significantly between areas, reflecting each area’s specific needs and conditions.

Failure to comply with the selective licensing requirements can lead to significant fines, legal action, and possibly being banned from renting out properties. The scheme aims to enhance the quality of housing and community welfare by holding landlords to these high standards.

What are the licensing fees?

Local councils, in our case Brent, determine the licensing fees for properties.

In Brent, the standard new application fee for selective licensing starts at £640, and renewals at £600.

Other fees apply:

• Change of existing licence holder – A new application must be made, with initial fee
• Application to license after it was taken away – initial application fee
• Application received following the expiry of a Temporary Exemptions Notice (TEN) made by the council – initial application fee
• If applicant withdraws the application – initial application fee, with no refund
• Change of license type (for example if a single dwelling is re-let as an HMO) – new application fee

Licenses for selective schemes can be issued for up to five years, although some may be granted for shorter durations depending on the local authority’s specific regulations.

Responsibilities and Penalties for Non-Compliance

Both landlords and letting agents play pivotal roles in ensuring compliance with selective licensing regulations. The primary responsibility for obtaining a license and covering the associated fees lies with the landlord.

However, letting agents are also legally obligated to ensure that their properties are correctly licensed, regardless of the terms stated in their business agreements. This is because they often meet the statutory definition of a “person having control” or “person managing” under the Housing Act 2004.

In cases where there is a change of landlord or agent, the license is non-transferable, necessitating the new landlord or agent to apply afresh and incur the associated costs.

Penalties for Non-Compliance:

• Breach of License Conditions: Each offence can attract a fine upon conviction. (as per Housing Act 2004, Section 95)
• Operating Without a License: This can result in an unlimited fine or a Fixed Penalty Notice of up to £30,000 if the property is in a designated licensing area. (as per Housing Act 2004, Section 249A)
• Banning Order: the landlord could be subject to a banning order. (as per Housing and Planning Act 2016, Section 15)

Letting agents are crucial in guiding landlords through the licensing process and ensuring awareness of these requirements, thus avoiding severe penalties that could include hefty fines or legal action.

Scope of the New Scheme in Brent

The new selective licensing scheme significantly expands the scope of property regulation. Under this scheme, each property rented to a single household, or two unrelated individuals must be licensed unless specifically exempt under the statutory guidelines.

This expansion is particularly notable as it builds on previous selective licensing in the borough and integrates more comprehensive measures to address property management and safety issues. It reflects a strategic move to ensure all landlords comply and contribute positively to the community’s welfare.

As a landlord, you must fully understand and comply with the licensing requirements to avoid penalties and contribute to the broader goals of housing quality and community safety in Brent.

The Impact
The long-term impact of selective licensing on the community in Brent is multifaceted. Studies indicate that such licensing can contribute to overall improvements in neighbourhood safety and housing conditions.

However, the mechanisms through which selective licensing achieves these impacts can be complex, often involving coordinated efforts across different local government agencies and sectors.

For more information or assistance with your properties in Brent, contact Regal Lettings Agents at 020 8459 2530 today, or visit our branch at 383 High Road, London, NW10 2JR.