Landlords are being warned that Wirral Council is extending
its selective licensing scheme, after a family of landlords was fined more than
£16,000 for failing to comply with the system.
From April 2019, streets in Birkenhead, Hamilton Square and Seacombe
will become subject to selective licensing, which means that all landlords with
properties in these areas must apply for a licence to let their property.
David Kirwan, a Managing Partner at Kirwans law firm, is
warning landlords to ensure that their properties aren’t affected by the
extension, as he is concerned that councils are routinely pursuing the most
serious enforcement option open to them.
He says: “There are a number of ways in which
councils can penalise landlords who fail – for whatever reason – to comply with
the rules of selective licensing. These range from providing advice, guidance
and support, or issuing a simple caution to prosecuting landlords through the
courts, and refusing or revoking licenses.
“A trend is emerging of councils choosing to enforce
the harshest options, as they seek to make an example of landlords who don’t
abide by the rules.”
Kirwan explains that he has acted for clients
investing in property to raise additional income or to provide a pension in
retirement, who he says are “utterly devastated” to find themselves hauled
before the courts for failing to apply for a licence.
Using selective licensing legislation introduced by
part three of the Housing Act 2004 in areas affected by poor quality rental
housing, irresponsible landlords and anti-social behaviour, local authorities
are able to introduce penalties that go well beyond the mandatory Government
landlord licensing rules.
“It is heart-breaking to watch some landlords going
through completely unnecessary criminal proceedings, simply for failing to
apply for a licence,” Kirwan says.
In worst-case scenarios, landlords could be handed a
criminal record, an order to repay 12 months’ rent or be banned from letting
property in the future.
Indeed, the latest court action taken by Wirral
Council saw fines of over £16,000 last year for a family that let a flat in
Egremont for failing to obtain a licence, failing to provide documents and
providing false information.
The prosecution was the 22nd successful
case by Wirral Council against landlords and property managers who have failed
to licence their properties.
Selective licensing schemes apply to a designated area
for a period of five years and landlords have to apply for a licence for each
They are then awarded a licence to operate a property
only after an assessment that must deem them a fit and proper person, as well
as satisfying stipulations around the management and funding of the property,
and health and safety considerations.
The schemes, which opponents claim are a way of boosting council funds, have faced criticism for both the cost of licences, which are usually hundreds of pounds, and for the fact that they may drive the very rogue landlords that they are supposed to weed out further underground.
They have also proved confusing for landlords, who are
often unaware that their properties even lie in a selective licensing area.
For those operating numerous properties across
different areas, the situation can be more bewildering, as each council can
create its own set of rules for each scheme.
Rogue landlords, ironically, may simply choose to
avoid the licensed areas, moving their poor practices to locations where such
schemes are not currently in place.
In June, the Government announced a review of
selective licensing and how well it is working, with the findings due to be
published this spring.
Kirwan says: “While we would all agree that unethical
landlords must be weeded out to ensure protection for society’s most vulnerable
tenants, councils must be careful that they don’t throw the baby out with the
“Rogue landlords operate in an entirely different
manner to the many decent men and women, some of whom are only just entering
the rental sector, who are finding their way in the rental market and may be
unaware that such schemes have even been introduced in their area.”
He continues: “To suddenly find themselves in a
situation where prosecution with outrageous penalty fines is a distinct possibility
is absolutely terrifying.
“It’s also counter-productive, as landlords are now
telling me that, rather than face this sort of frightening action, they will
either sell up, or choose not to invest in property in affected areas in the
first place. This will then reduce the choice of accommodation on offer for
those renting, leading to a lose-lose situation for all.”
Kirwan concludes: “My advice to all landlords would be
to check with their local council as to whether their property requires a
licence, and to seek legal advice immediately if they receive a letter from
their local authority threatening fines or prosecution.”
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