Property licensing is the Local Authority’s process of improving living standards in rental accommodation and proving that landlords are ‘fit and proper' persons to operate these properties. The type of license a property requires varies depending on a number of different factors, including the number of tenants and the council your property is located in.
When determining whether you need a property license, it is important that you are aware of both the national and local authority regulations. The licensing rules are not consistent across every London borough, with each individual borough creating its own set of licensing rules. This creates a lot of confusion and makes it extremely difficult for agents and landlords to know whether their property requires a licence or not and a professional licensing company should be instructed to guide you through the process. In short, the type of licence required will depend on the property itself, how it is tenanted and the borough that it is located in.
Each council’s licensing requirements are applied to properties on a case-by-case basis, taking into account the size of the property and the number of tenants and type of tenancy. For example, the fire safety regulations are stricter for a 5 tenant bedsit HMO than for a family home. The level of fire safety and health and safety required in a property is supported by case studies that have illustrated the respective risk factor in each type of residential property. The guidance and enforcement come from the HMO Management Regulations 2006 or RRO (The Regulatory Reform (Fire Safety) Order 2005) and the Housing Act 2004 under HHSRS.
You should always hold the correct property licence for your property. If the number of tenants in the property has changed this may change which licence is required. For example, if you have an HMO of 4 tenants under additional licensing and then tenant numbers increase to 5 this means a mandatory licence may now be required and the council must be notified of the change. The same is true if you are decreasing numbers. You may also have to risk assess the property again for fire precautions as a minimum.