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.
Even if councils choose to avoid the courts, civil penalty fines of up to £30,000 can be imposed.
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 property affected.
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 bath water.
“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.”