Selective Licensing... Do I need a Selective Licence?

What is a selective licence?

Many Council Housing Authorities have used their powers under the Housing Act 2004 Part 3 to bring in Selective Licensing Schemes. A scheme can cover specific areas of the Council’s area or in many instances it covers the entire area or borough.

In theory, these Selective Licensing Schemes are introduced to combat low demand in an area (because the area is not desirable) and to combat anti-social behaviour in an area where other methods have failed.

In practice, there is a large body of opinion that Councils have introduced these schemes as a way to raise local taxation revenue from licence application fees. Plus it gives councils the ability to impose civil financial penalties in the £thousands on landlords and owners who either fail to licence their properties or commit criminal offences by failing to adhere to Selective Licence Conditions imposed by the council and which most landlords don’t know how to challenge

do i need a licence for my property
What licence does your property need?

Do I need a selective licence for my property?

If your Buy-to-Let or rental property is within a Selective Licensing Scheme area then 99.9% YES.

Whether it is a flat, house or bungalow, every single rental property in that area must have a Selective Licence with a very few exceptions.

Hint: Do not think you can get away with trying to claim your property is an exception unless it absolutely is. The average civil penalty fine for not having a Selective Licence is between £5,000 and £12,000. By the time the council has added fines by ‘finding’ things that are wrong with your property you can expect the total fine to be at least £10,000 up to £20,000 or more. It really isn’t worth the risk!

The main exceptions are that your property needs a different type of licence such as:

A Mandatory HMO Licence

If it houses 5 or more persons (NB persons, not bedrooms) where they are not all one ‘household.’

In practice this means that if any single person in the house of them is not related to all the others by blood or marriage/sexual union – such as a friend or they are sharers – then the law says it is an HMO that requires a mandatory licence.

An Additional Licence for HMOs

In many council areas, they have introduced Additional Licensing schemes to make HMOs of 3 persons (where they are not all related) require an Additional HMO licence.

(There are also some other very minor exceptions.)

So for 99.9% of Buy-to-Let or rental properties in a Selective Licensing Scheme area, unless it requires an HMO license Your Property REQUIRES A SELECTIVE LICENCE.

NB In Selective Licensing Scheme areas where smaller HMOs of 3 or 4 persons are not covered by and Additional HMO Licensing scheme these properties MUST have a selective licence.

There is sadly no national database of which areas are covered by Selective Licensing Schemes. We can help you to determine this and undertake the application process for you.

What are the requirements for a Selective Licence?

You must pass the council’s tests for:

Property management competence

The suitability of your management structures

You must be a ‘Fit and Proper Person[link]’ to hold a licence

You must inform ‘Relevant Persons’ that you are applying for a Selective Licence, (for example your mortgage provider, freeholder, insurers, managing agents, etc.)

You will be required to state that your property fully complies with all the relevant legislation, regulations and health and safety standards. (There are hundreds of them.)

I’ve just realised my property should already have a Selective Licence, but I didn’t apply for one.

This is very serious. You have committed a Criminal Offence and the Council can take you to court or issue you with a Civil Penalty Fine of up to £30,000.

We strongly advise you NOT to talk to your council - as they are now your Prosecutor and their only interest will be to ‘enforce’ against you by way of criminal prosecution in the courts or very large Civil Financial Penalty fine.

We also strongly advise you to seek professional help from us or other specialists.

What licence does your property need?

How do I apply for a Selective Licence?

While it is possible to undertake the application process yourself, we would advise against this because of the many pitfalls.

If you do choose to apply on your own, it is essential that you familiarise yourself with all of the standards such as the Housing Health and Safety Rating System and your council’s specific selective licensing standards before applying for a licence.

Our Local Authority Selective Licensing Compliance Check can help you determine how compliant your property is in relation to your council’s guidelines and national legislation.

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