What is “Property Licensing”?
The Housing Act 2004 introduced “property licensing” from 2006 to ensure private rented homes are well managed. A named “licence holder” is required for each property. There are three schemes:
- Mandatory House in Multiple Occupation (HMO) Licensing
- Additional House in Multiple Occupation (HMO) Licensing
- Selective Licensing
Mandatory House in Multiple Occupation (HMO) Licensing
An “HMO” is a property where three or more unrelated people live together. They are often called “shared houses”. See our HMOs webpage for further information, including the full definition of an HMO and the different types of HMOs.
Across England, HMOs with five or more tenants require a mandatory HMO licence (except section 257 HMOs).
Additional HMO licensing
The Housing Act 2004 also allows the Council to require other HMOs in their area to have an “Additional licence” to address problems associated with poor management of HMOs. In Oxford, the Council has operated “additional licensing” since 2011.
From 10th June 2021, a new Additional Licensing designation will be in force – this applies to 3 or 4 person HMOs and section 257 HMOs (buildings converted into self-contained flats which do not meet building regulations).
This means that all HMOs in Oxford city will require an HMO licence. Complete your application form today!
Failing to licence an HMO is an offence under the Housing Act 2004.
The Housing Act 2004 also allows the Council to require any private rented homes within a specified area to have a licence (unless it falls under mandatory or additional licensing). The reason for selective licensing is to address problems like poor property conditions. The Council has approved designations for Selective Licensing, to cover the whole city. Due to the number of properties the designation covers, this scheme must be confirmed by the Secretary of State for Housing, Communities and Local Government before a Selective Licensing scheme can start.
Landlords do not need to apply for a selective licence at the moment. If Selective Licensing is confirmed by the Secretary of State, the Council must publicise the scheme for 3 months prior to the start of the scheme .It is estimated it will begin in spring / summer 2022 (or even later).
Why bring in Additional or Selective Licensing schemes?
These schemes will improve the management and condition of rented homes. Oxford has a very high proportion of rented homes and many are unsafe. Licensing protects tenants and ensures all landlords meet their legal responsibilities.
The Additional Licensing scheme is not new – it replaces the previous schemes that operated from 2011 to January 2021.
The Selective Licensing scheme would be a new scheme for the city.
How many homes will these schemes cover?
There are an estimated 30,508 privately rented homes in Oxford of which 4,400 are estimated to be HMOs (only 14.4% of private rented homes). Selective licensing would cover the remaining 26,108 family homes.
Will the schemes cover the whole city?
Additional licensing covers the entire city as it has done since 2011.
Selective licensing is proposed to cover the entire City. However, as the council must demonstrate certain criteria are met, Holywell Ward may be excluded. Holywell Ward is in the city centre and contains university accommodation.
How much will licences cost?
The fee for a new HMO licence (either Mandatory or Additional) will be £557 for a one year licence (higher fee applies for landlords operating for more than 12 weeks without a licence). On renewal, the fee is dependent on the length of licence and compliant and accredited landlords can get a longer licence. We have a fees and charges webpage with more detail.
The fee for a selective licence will be £480 for a five year licence – however discounts will be available for those landlords who are accredited and for those who apply within 3 months of the start of the scheme.
Will the property be inspected?
All HMOs are inspected before the issue of a new licence. We re-inspect during the one year term to check the landlord has completed any required work and no new work is required due to poor management.
- If not compliant, we will re-inspect the property to ensure compliance with the conditions of the licence.
- If compliant, we will then re-inspect within five years, unless the landlord is accredited in which case we may audit the records instead given we expect these properties to be managed to a higher standard.
We may re-inspect HMOs at any point, regardless of the time since the last inspection, when we believe necessary for example, on receipt of a complaint from tenants.
Properties in the selective licence scheme will not be inspected before the issue of a licence. An inspection will be prioritised by the property history, the landlord/manager’s history of compliance and the information provided in the application. Where a property is managed by an accredited letting agent or landlord, then only a sample of properties will be inspected.
What information needs to be provided with an application?
HMO licence applications can be made online. We prefer to receive applications online however if you do not have internet access, please call 01865 252307 to request a paper application. Please note it may take longer to process a paper application.
Landlords do not need to apply for a selective licence at the moment.
The following details must be provided when an application is made:
- Address of property to be licensed;
- Applicant name and contact details (email required for online application);
- Licence holder name and contact details (email required for online application);
- Manager name and contact details;
- Any other owners’ name and contact details (including freeholders and leaseholders, email is preferable);
- Any long-term tenant or persons agreeing to be bound by the conditions name and contact details;
- Details regarding certain contraventions or convictions relevant to Fit and Proper Person status;
- Details of the property e.g. age of construction;
- Details of any other HMO or house that are licensed either in this area or another area.
You can also provide details of any landlord/agent accreditation you may hold including the scheme name and copies of any certification. This will help in deciding the length of licence or any available application fee discounts.
The following information will be requested as part of the application (if this is not provided at application, it must be provided as a condition of the licence):
- Current gas safety certificate
- Current electrical inspection certificate
- Current Energy Performance Certificate (if applicable)
- Information about smoke alarms / detectors and current test certificates / declarations
- For HMOs, fire risk assessment and emergency lighting certificate (if applicable)
How will the schemes be enforced?
The Council will allocate resources to find landlords who have not licensed their properties. The Council has a good track record of enforcing against those landlords who have not complied with the previous HMO licensing schemes. Landlords should not expect to receive a warning before enforcement action is started for licensing offences.
What are the penalties for not licensing?
Failing to licence an HMO is a criminal offence under the Housing Act 2004. The same offence applies if selective licensing is in force. There are a number of penalties:
- Landlords renting out a property without a licence could face prosecution with an unlimited fine from the Court or the Council can issue a fixed penalty up to £30,000.
- The Council can determine the landlord is not “fit and proper” to hold a licence given the failure to licence. This decision can be made even if we do not issue a fine or prosecute. Being classed as “not fit and proper” would result in the licence being refused and the property being required to license under the name of an alternative licence holder, or for the Council to take control of the property.
- If a landlord fails to make an application for a licence, the Council can take control of the property – this is known as a Management Order.
- The occupiers can also apply for a rent repayment order to recover rent paid whilst the property was unlicensed.
- The landlord cannot serve a section 21 notice (notice of eviction) while the property remains “unlicensed”.
- If a landlord receives a Court conviction, the Council can apply for a banning order to prevent the landlord from letting property across England for up to five years.
- If a landlord / agent receives more than two fixed penalties in one year, the Council can apply to name the person on the Rogue Landlord database (currently only accessible to other local authorities).
Background on Selective licensing
The Council undertook a consultation exercise (between 10 September and 31 December 2020) on introducing selective licensing. A report was produced by Opinion Research Services who undertook the consultation on our behalf:
- Executive summary
- Consultation on Selective and Additional HMO Licensing in the Private Rented Sector in Oxford
The Council carefully considered the feedback received during the consultation.
At the Cabinet meeting on 10th March 2021, the Council made the decision to go forward with designations for Selective Licensing and to make a submission to government to confirm the implementation of a Selective Licensing scheme. If confirmed, a scheme would be likely to start in 2022. Details of the Cabinet Report are below:
- Proposal to make designations for Selective Licensing and submit for approval to Secretary of Stage
- Selective Licensing Report
- Appendix 1 Consultation Report Executive Summary
- Appendix 2 Consultation methods comparison
- Appendix 3 Council response to the consultation
- Appendix 4 Selective Licensing Conditions Proposal
- Appendix 5A Draft Designation whole city excluding Holywell ward
- Appendix 5B Draft Designation Holywell ward only
- Appendix 6 Selective Licensing Eligibility criteria
- Appendix 7 Selective Licensing Fee structure
- Appendix 8 Selective Licensing Risk register
- Appendix 9 Selective Licensing Equality Impact Assessment
Landlords do not need to apply for a selective licence at the moment.
Where can I find out more information?
Further information about Selective Licensing will be published on our website as it becomes available. Landlords do not need to apply now for a Selective Licensing.
To sign up to receive our newsletter regarding private rented homes please email the HMO Team with the subject “subscribe to newsletter” and giving your name and email.
More information regarding the Property Licensing Consultation undertaken in late 2020.