Selective private rented property licensing is coming

Selective licensing of privately rented housing under part 3 of the Housing Act 2004 seems to be on the move. Has it reached an area near you? Do you know who needs a private rented property licence (PRPL) and what the consequences are
if they do not have one?

If you are advising private residential landlords or tenants, it is important to know all these things and more.

Designated areas

Until recently the scheme has had relatively little take-up.
Its impact was reviewed by the government last year. The review suggests its effectiveness is mixed. However, an increasing number of local authorities are designating all or part of their area as subject to the system.

Before an area is designated, there must be a ten-week consultation period and approval by the secretary of state or the National Assembly.

There are general consents in place. During 2014/15, the London Borough of Waltham Forest, Liverpool, Southwark, Hackney, Croydon, Brent, and Newham have been among those that have moved forward with designating their area.

The scheme was introduced to deal with poor landlords and anti-social tenants in low housing' areas. Current government proposals include adding further pre-conditions so that designated areas must be suffering from low standards of housing, high levels of deprivation, or an influx of immigration.

There are a number of important things for the practitioner to know.

In a designated area, every house let under a single tenancy or licence or multiple tenancies of multiple dwellings within it must be licensed.

'Fit and proper person'

To be licensed, a property will have to satisfy certain standards relating to its state of repair and safety. In addition, there must be a licence holder who is a fit and proper person and the most appropriate person to be licence holder. Further, the individual with day-to-day management control of the house must also be a fit and proper person.

What does it mean to be a 'fit and proper person'? That is a matter for the local authority but they must have regard to any evidence of dishonesty, violence, drugs, sexual offences, or a history of unlawful discrimination.

In addition, and more significantly, the local authority must have regard to any evidence that the person has 'contravened any provision of the law relating to housing or landlord or tenant law'. That would seem to give scope for a huge range of failures by a landlord to be brought into play, whether they relate to commercial premises, long leases, breaches of covenant, or statutory schemes.

Criminal offence

Why does all of this matter? A landlord who does not have a PRPL is unable to serve a valid section 21 notice and cannot therefore recover possession of their property through the accelerated procedure or otherwise rely on a section 21 notice.

For practitioners it now becomes vital that, in preparing for the service of a section 21 notice or possession proceedings based on one, a check is made to establish if the property is in a designated area and, if so, evidence of a valid PRPL is obtained for the proceedings.

Further, it is a criminal offence to have control of or manage a house that does not have a PRPL when it should unless an application has been made or there is a reasonable excuse. The obligation on local authorities to give notification of designations is very limited. They must put up a notice in the area and notify all of those who participated in the consultation that preceded the designation. It is also a criminal offence not to comply with the conditions on a PRPL. The maximum fines for the various offences range from £5,000 to £20,000.

Where one of the offences has been committed, an application can be made by the occupant to the RPT for repayment of rent paid. A local authority may also apply for repayment if housing benefit has been paid.

So a landlord who lets in a designated area without a PRPL is in considerable difficulty. They are at risk of being prosecuted and efforts to regularise the position by applying after the event may create even more problems with their tenants or the local authority, to which the possible offences committed will quickly become apparent. SJ

Brie Stevens-Hoare QC is a barrister practising from Hardwicke 

@hardwickelaw