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Are you prepared for the mandatory licensing scheme changes?

Friday 31 August 2018

A seismic legislative change is due to hit the Private Rental Sector in the very near future. Have you made arrangements to get compliant with the law change? If not, you will soon be at risk of prosecution, severe reputational damage and fines of up to £30k.

Under Part II of the Housing Act 2004, Mandatory Licensing is applicable only to larger HMOs. While an HMO is defined as a property housing at least three people in at least two households with shared facilities, Mandatory Licensing is currently designed to apply only to those HMOs with 5 plus people in at least two households across three storeys.

The changes

Following a two year consultation on the issue, new legislation was approved by parliament in February 2018, concerning the conditions for Mandatory Property Licensing. On 1 October 2018, the storeys condition will fall away meaning any property housing five or more people in two or more households will require a Mandatory Property Licence, regardless of size. This is estimated to drastically increase the stock of housing to which Mandatory Licensing is applicable, from circa 60k to 220k.

While ideas of grace periods spanning anything from six months to five years were mooted to give landlords and agents time to arrange their compliance, this concept was ultimately not enshrined in law. This entails that agents and landlords must submit their applications to the local council prior to 1 October or risk prosecution and a fine of up to £30k per breach.

Given that liability for prosecutions and fines will kick in immediately on 1 October, agents and landlords need to ensure that they are on top of their Property Licensing and have their applications submitted to local councils prior to the fast approaching deadline. While the vast majority of agents and landlords are keen to remain compliant with the law and ensure that they are letting out safe and suitable accommodation to tenants, many are ignoring the looming spectre of licensing in the hopes of not getting caught. While the ever expanding complexity of the licensing framework has always been a major complaint from the industry, the fact of the matter is that the law exists and enforcement is tightening meaning those burying their heads in the sand are likely to soon be painfully yanked out.

Help is at hand

GetRentr’s automated monitoring and checking system covering Mandatory, Additional and Selective licensing schemes across the entire UK can remove the complexity and administrative burden experienced by landlords and agents. Given that during 2018, a new scheme is introduced, on average, every eight days and political pressure to be seen to be tackling ‘rogue agents and landlords’ is seemingly ever increasing, property licensing is rapidly becoming a critical issue for all private landlords.

GetRentr’s platform monitors and aggregates all UK property licensing regulations in real time. Every consultation, amendment, expiry and implementation is automatically tracked and added to GetRentr’s database, creating a live property licensing dataset covering the UK. GetRentr's platform for agents automatically reconciles their portfolios with the UK's property licensing framework, immediately notifying them of anything that impacts any of their properties. GetRentr helps agents to de-risk liability, retain customers, and drive revenue through a targeted licensing application service.