Additional Licensing Consultation - Frequently asked questions

Below are a series of questions and answers in regards to the Additional Licensing consultation which was held for 12 weeks between August 3 to October 23, 2020.

What did the Council consult on?

The Council are consulted on a proposed borough wide proposed Additional Licensing scheme for Houses in Multiple Occupation (HMO).

Why don't you just go ahead and introduce Additional Licensing without consultation?

It is a statutory requirement that the Council consult with all residents, landlords, business and other stakeholders to introduce Additional Licensing.

Why did you consult?

Part 2, Section 80 (9) of the Housing Act 2004 allows for Additional Licensing of HMOs for example in a particular area or whole Borough for those not covered by Mandatory Licensing.

The local housing authority must:

• take reasonable steps to consult persons who are likely to be affected by the designation; and
• consider any representations made in accordance with the consultation

How long did the consultation last?

The Council are consulting for 12 weeks from the August 3 to October 23, 2020.

How can I have my say?

The consultation on the scheme has now closed.

What happens after the consultation?

A consultation report will be produced to record the views/opinions of those consulted. At this time the Council will then decide whether:

• not proceed with the licensing scheme at this time
• change the proposed licensing scheme and implement it
• approve the borough wide licensing scheme and implement it

What is Additional Licensing?

The Housing Act 2004 provides a power for Local Authorities to licence HMOs which are not covered by Mandatory Licencing. Part 2 of the Housing Act provides for Additional Licensing of HMOs for example, in an area or the whole borough.

The Act permits Additional Licensing of HMOs that are not licensed under the Mandatory Scheme but where the Council has used its power to subject HMOs across the Borough to Additional Licensing.

Why are you considering the introduction of Additional Licensing?

The private rented sector is an important part of providing a diverse housing offer in the Borough:

• The Rogue Landlord Project has identified a significant number of HMOs in Loughborough that are not licensed under the Mandatory Scheme with Category 1 and 2 Hazards
• Additional Licencing will extend and continue the process of upgrading of HMO rental stock in line with the Mandatory Scheme
• All HMOs will be subject to the same evaluation and improvement regime as the national scheme
• Residents will be afforded the same protection as people in licensed HMOs
• Without Additional Licensing there is significant and growing disparity in the HMO market

Where are you considering the introduction of Additional Licensing?

The Council are proposing the introduction of a borough wide Additional Licensing scheme. 

What are the benefits of Additional Licensing?

Additional Licensing will:

• extend and continue the process of upgrading of HMO rental stock in line with the Mandatory Scheme
• all HMOs will be subject to the same evaluation and improvement regime as the national scheme
• afford residents the same protection as residents in licensed HMOs
• reduce the significant and growing disparity in HMO market

What evidence is there that Additional Licensing is needed?

Detailed evidence for the scheme can be found in the Additional Licensing Justification Report - August 2020 (PDF Document, 0.97 Mb)

What properties would be affected by Additional Licensing?

The scheme will cover all HMOs of any size building, occupied by three or four unrelated persons and all Section 257 Houses in Multiple Occupation (buildings converted into self-contained flats) where the building is wholly occupied by tenants.

I thought you already licensed Houses in Multiple Occupation (HMOs)?

Under Part 2 of the Housing Act 2004, the Council has a statutory duty to licence privately rented HMOs occupied by 5 or more persons in 2 or more households, sharing an amenity regardless of the number of storeys to be licensed.  This is known as Mandatory Licensing.

Is this a property or landlord licence scheme?

This is a property licence scheme, and every property a landlord owns within the proposed boundary would need its own licence.

How long will the licence last?

The licence period lasts for five years and will include Mandatory and Discretionary conditions aimed at ensuring licensed properties are safe, meet basic standards and are managed in a satisfactory way.

Is the licence transferable?

A property licence is not transferable to another property, person or organisation.

Would an empty property need a licence?

A licence is only required if the property is privately rented and occupied.

What is the application process?

The Council is working towards an online application and payments system.

In some circumstances further information may be required before a licence can be processed, eg informed consent forms for people that are named in licence applications, joint freeholders.

What would happen if a landlord failed to apply for a licence?

It is a legal requirement for landlords to apply for a licence, and a criminal offence if a landlord fails to do so. This could then involve a financial penalty, which if prosecuted through the Courts could be an unlimited fine.

Who should be the licence holder?

The Council can only grant a licence to someone who is in control of the property. It is the owner's responsibility to ensure that an application for a licence is made for their property; however, they may not necessarily be the licence holder.

Landlords who manage their properties directly should apply for a licence. Where a managing agent is used, the managing agent could apply for the licence and the landlord will need to provide information about the property and give their consent.

Where a manager is employed, financial arrangements must be in place to ensure that any works deemed necessary for the proper management and maintenance of the property can be carried out.

When a limited company is the licence holder, then the company secretary or other authorised signatory should be the licence holder. You must be a resident in the UK to be a licence holder.

What happens if I don't get a licence?

If you don't apply for a licence and continue to rent your property, then you will be committing a criminal offence.

What happens if the licence conditions are breached?

If a licence is issued and the conditions are subsequently breached, this could lead to the Council taking Court action or issuing a civil penalty of up to £30,000.

Breaching the licence conditions could lead to the revocation of the licence unless a suitable alternative licence holder could be found.

Will my property be inspected?

The Council will inspect every property once during the five year licence period.

A higher risk property will be inspected sooner than a lower risk one. The level of risk depends on previous history, condition, management, etc.

How much will a licence cost?

The licence fee will be £700 (subject to change) and will be for the duration of the designation of the Additional Licensing scheme, which will be five years from the commencement of the approval of the licence. 

Can I pay in instalments?

There is no option to pay by instalments. The licence fee is paid in two parts:

• £395 when you apply for your licence
• £305 once the licence has been approved

Isn't this just a way of raising revenue for the Council?

Any income generated from licensing fees can only cover the running costs of the scheme. The Council are not allowed to make any surplus on the scheme to be used for any other purpose.

I'm a landlord of a property that could be subject to Additional Licensing. What do I need to do?

If you are a landlord of an HMO, irrespective of the number of stories that are occupied by three or four unrelated persons and all Section 257 HMOs (buildings converted into self-contained flats) where the building is wholly occupied by tenant property within the  Borough then you will need to apply for a licence.

The proposed licence fee will be £700 (subject to change). The licence and fee will be for the duration of the designation of the Additional Licensing scheme, which will be five years from the commencement of the approval of your licence.

I'm a tenant of a property that could be subject to Additional Licensing. How will it affect me?

As stated earlier, Mandatory Licensing of HMOs requires landlords to provide items such as gas safety certificates, the safe provision of electrical appliances and furniture and to keep the fire detection and alarm system in working order.

This should provide a greater degree of safety and reassurance to the tenant.

Tenants will have reassurance that checks have been done to ensure both the property and any shared facilities are suitable and that the property is suitable to be occupied by the number of people living there.

Will I be able to see which properties are licensed?

The Council will keep a list of properties that are licensed, and this will be publicly available on their website.

What conditions will apply to Additional Licensing?

There will be a range of conditions attached to each licence which will relate to the management of the property. There are some mandatory conditions, which we are required by law to place on the licence.

These include conditions regarding gas safety, electrical safety, smoke alarms etc.

The Council have the discretion to attach a range of local conditions. These will include conditions regarding energy performance, security, property management and dealing with anti-social behaviour amongst others.

Full details of these conditions can be found in the draft HMO Licensing Policy document: Draft HMO Licensing policy - August 2020 (PDF Document, 0.34 Mb)

The Council is now consulting on the conditions to the proposed additional licensing scheme and more information can be found on the Licence Conditions for Additional Licensing Consultation web page.

How will you manage to license all these properties?

The Council are proposing to employ more officers to implement the scheme.

I'm not a tenant but I do live in the area so how would it affect me? 

Additional Licensing will ensure that HMOs not subject to Mandatory licensing in the privately rented properties in your area are being managed efficiently and will enable the Council to take enforcement action against a wider range of properties where there may be problems.

This should result in benefits to all residents, businesses and visitors to the local area.

Will you penalise those that don't licence?

There will be a targeted approach to enforcement and the Council will use a variety of methods to find those that haven't licensed. We will respond to complaints received about unlicensed property.

Where necessary we will seek to prosecute those that continue to refuse to license their property.

How will you know which ones are unlicensed?

Tenants will be able to inform the Council if they believe their property is unlicensed. The Council will use a variety of methods, working with other partners to seek out unlicensed properties.

There will be a public register of licensed property, so it will be easy for residents to find out if the property they are concerned about is licensed or not.

If you decide to introduce Additional Licensing, when will it commence?

The consultation on the proposed scheme ran until the October 23, 2020 and a report was taken to Cabinet in December 2020.

On the December 10, 2020 Cabinet approved the proposed draft Licence Conditions and for a consultation exercise to be undertaken on these conditions.

The proposed date for the implementation of the scheme is April 1, 2021 and people affected will be given appropriate notice, so you won't need to apply until then.