Licensing and Regulation of Residential Tenancies

General

There is no general requirement to register residential tenancies in England and Wales.  In many cases, an obligation to register will apply. Certain categories of housing must be registered. Local Authorities have powers to require selective licensing in particular areas or in relation to particular properties.

An obligation to obtain a licence may apply in the case of a “house in multiple occupation”.  A stand alone property, occupied by a single household, without sharing any facilities, will not generally be a house in multiple occupation.  If however, it is in a converted block of flats where the building work does not comply with Building Regulation standards and less than two thirds of the self contained flats are owner occupied, it will be deemed to be a house in multiple occupation.

There are a number of categories of properties which require licensing.  The first category comprises properties where more than one family share common basic amenities e.g. kitchen, washing facilities or toilet.  The second category includes self contained flats where such facilities are shared.  A third category applies to buildings converted into flats with separate units and accommodation which do not consist of self contained flats.

A further category is certain buildings with converted flats.  This applies if the conversion works do not comply with modern building regulation standards, and less than two thirds of the flats are owner occupied.  This is designed to prevent a landlord arguing that properties are self contained by carrying out sub-standard building works.

The Local Authority has discretion to declare properties to be “houses in multiple occupation” requiring licensing where there is some doubt as to whether it falls into one of the categories.  This may, for example, apply to a guest house offering short term Bed and Breakfast accommodation.

It is possible for a Local Authority to declare a property to be a house in multiple occupation, thereby requiring licensing.  It is also possible for a Local Authority to require selective licensing.   It may designate a particular area as a license area.

Selective Designation of Areas

The Local Authority has power designate certain areas selectively for special regulation and control. The types of area targeted are usually run down areas where low demand for property means that there are a number of empty houses.  The licensing scheme is designed to turn these areas around by ensuring residential properties are properly maintained and managed.

An area may only be designated if the Council determines that it is an area of low housing demand and that the measures are necessary to contribute to the improvement of the social and economic condition of the area.

The Local Authority has powers to make management orders in respect of properties for periods up to twelve months.  The management orders can only be made where there is no reasonable prospect of the property being licensed in the future, and it is necessary to protect the health, safety and welfare of the occupants of the house.

The Housing Act 2004 greatly enhanced the powers of Local Authorities to monitor the condition of residential properties in their areas.  It gives local Councils wide powers where housing conditions are below an acceptable standard.

Local Authorities are obliged to monitor housing conditions and draw up priority lists in relation to possible hazards and risks of harm.  The type of enforcement powers local authority use will depend on the category of risk.  In the case of serious risk, local authority has a duty and obligation to take remedial action.

Licensing Requirements

Where licensing is required, it must be applied for and certain basic information must be furnished to the Local Authority.  A licence fee is charged by the authority.  The fee is set by the Local Authority.  A licence may be granted if a house is suitable and the proposed management arrangements are satisfactory.  Licences will generally be granted for periods of 5 years.  They may be varied or revoked.

The suitability of the house is assessed by reference to prescribed standards.  There are standards as to toilet and bathroom accommodation, food stores, cooking, laundry facilities and other facilities.  The owner/manager must be a fit person.  This is concerned principally with persons with criminal records.  Management arrangements refer to whether the manager has an appropriate management structure and funding arrangements are suitable.  If the house cannot be licensed, the Local Authority may take over the management on an interim or a long term basis.

Licence conditions can be imposed by the Local Authority.  Mandatory conditions include maintaining annual gas safety certificates, keeping appliances and furniture in a safe condition, and ensuring smoke alarms are installed and work properly.  In addition, the Local Authority can include restrictions on the use of the house, steps to reduce anti-social behaviour and requirements for maintaining facilities and equipment within the house.  The licence holder can be obliged to attend a relevant training course.  Licences last for 5 years and must be reviewed.

Where property should be licensed, but is not, the landlord may be required to repay the rent received during the licensed period up to a maximum of 1 month.  Housing benefit paid may be reclaimed from a landlord/owner.  The right of recovery of the property is also limited.

It is an offence, punishable by a fine of up to £20,000 to fail to register a house in multiple occupation, where licensing is required.  The tenancy is not enforceable while the property is unlicensed.

Local Authority Powers

The Local Authority has powers to serve “improvement notices” on the owner or manager of the property, specifying works which must be undertaken.  The Local Authority may prohibit the use of property for residential purposes pending completion of works.  Failure to comply with the notice is a criminal offence and the Local Authority is entitled to take steps to undertake the works concerned and charge the costs.  In extreme cases, the Local Authority has powers to demolish the property where houses and defects cannot be remedied.

Local Authorities have the power to take over buildings on a long or short term basis where they are required to be licensed, but the owner refuses to act in accordance with the terms of the licence.  Under a management order, the Local Authority has the right to take possession of the house.  It does not become owner of the property.  It can however exercise all the rights of the landlord including evicting tenants, carrying out repairs etc.  The landlord is no longer entitled to exercise management functions in relation to the property.  He may not receive rent or grant new leases. Where a Local Authority incurs expense managing the property the expenditure can be recovered from the owner.

A Local Authority has the power to apply for an “empty dwelling management” order.    There are a number of categories of properties which may be made subject to an empty dwelling order.  A property genuinely on the market for letting is exempted. The order may be granted where the property has been unoccupied for at least 6 months and there is no reasonable prospect of it becoming occupied.

The Local Authority can serve an overcrowding notice where there are too many people sleeping in one room or people are sleeping in rooms not suitable to be occupied as sleeping accommodation.

Safety Obligations

There are obligations imposed on landlords in relation to the safety of gas fittings.  Gas appliances and fittings must be checked before a property is let and at least every 12 months thereafter by an approved gas fitter.  The landlord must be able to produce safety certificates.  The certificates must be produced to the tenant within 28 days of each check or 28 days of the commencement of the tenancy.

There is  an obligation on a landlord to ensure that a room used as a sleeping accommodation does not contain a gas fitting that is not room sealed or does not incorporate safety controls.

An Energy Performance Certificates is required whenever a property is built sold or rented.It must be obtained for potential buyers and tenants before the property is marketed  to sell or rent. It must be furmished to the tenant and prospective tenants.

A landlord must make sure that any electrical appliances that he supplies for the tenant’s use, such as cookers, washing machine etc are safe to use. The Landlord should carry out a regular basic visual safety check of the electrical installation to ensure that these are safe.

The Electrical Safety Council that period inspections/tests by a qualified electrician are carried out at least every 5 years or on a change of tenancy. If the property is a house in multiple occupation of any kind (which will include shared houses) there is a statutory requirement to carry out such inspection/test every 5 years anyway.

A landlord  must install at least one fire alarm on every storey that is used for accommodation, and a carbon monoxide alarm in rooms in which solid fuel is used.

The landlord must test the alarms at the beginning of every tenancy and should ensure that they are checked  monthly. The monthly fire alarm tests can be conducted by either the tenant or the landlord, and  a record of the dates of each check should be checked. if testing falls on the tenant, the landlord should instruct the tenant on what exactly needs checking and keep a regular eye on the situation.

In the case of multi-occupied residential buildings, the landlord may be required to conduct a fire risk assessment. The purpose is to determine the risk of fire, and the potential consequences for the safety of tenants. The risk assessment applies to the common parts of the block.

In a house in multiple occupation, the landlord may be obliged to provide fire extinguishers.

You must also ensure that tenants have access to escape routes at all times, regardless of the type of property, and that they are made aware of these. These cannot be obstructed for any reason.

If a landlord supplies furniture, that furniture must meet be certified to meet the relevant fire safety requirements.

Notices

Landlords must give written notice to the tenant of an address at which notices (including notices in proceedings) may be served on him by the tenant.  This is usually done in the tenancy agreement.  Every written rent demand must specify  the name and address of the landlord.  If that address is not in England and Wales, the demand must specify an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.

Where a property with a tenant in it changes hands, the new landlord must give the tenant written notice of the change and of his name and address (which can be his business address).