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Posted on June 1st 2015 by admin-movingin

Cameron’s landlord licensing scheme: Important update

Just over a week after David Cameron’s announcement of a national mandatory licensing scheme for private landlords, there has now been clarification.

It will apply to Houses in Multiple Occupation or “shared housing” only. However, there is to be a new definition of HMO.

The update came from the Department for Communities and Local Government after a request for further information from the National Landlords Association.

The new licensing regime will extend the existing statutory licensing regime for HMOs – currently this applies to properties of three or more storeys high, lived in by five individuals making up two or more households.

The Government will consult on the amendment of the definition of a mandatory licensable HMO.

For example, it could propose lowering the three storeys down to one, to include “beds in sheds”, and it might propose removing the “more than one household” test or reducing the number of sharers. It could mean that landlords who believe they have fairly ordinary rental properties find they have licensable HMOs. A new HMO definition could also run the risk of  some rental properties at times being licensable HMOs and at other times not – depending on who was living there.

There is no guidance yet on the proposed timetable for the consultation.

While landlords and agents will widely welcome the clarification, after concern that mandatory licensing would apply to landlords of all types of rental property, there is nevertheless concern.

Many properties and landlords are not currently covered by additional licensing schemes, since a number of local authorities do not operate these. If a large tranche of properties now have to be mandatorily licensed, this raises enforcement issues given how under-resourced most councils already are.

Of further concern is the ‘small print’ to the Queen’s Speech, which has now been published.

This makes it clear that the Government “will build on the national roll-out of the landlord scheme established in the Immigration Act 2014 and make it easier to evict illegal migrants”.

Again, there is no timetable for the national roll-out of the Right to Rent scheme currently being tested in the west midlands. Nor is there yet any official assessment of how this pilot has gone.

However, it would appear that landlords and agents will have to bring themselves quickly up to speed on the duty to check the immigration status of prospective tenants.

It is also not clear how the Government plans to make it easier to evict illegal migrants, with lawyers warning this could be a legal minefield.