Since the Housing Act 2004, local authorities have had powers to regulate standards in the private rented sector by introducing property licensing schemes.
There are currently three types of licensing scheme in the UK:
- Mandatory licensing applies to all Houses in Multiple Occupancy
(HMO’s) having 5 or more occupants living as 2 or more households.
- Additional licensing schemes can be introduced by councils at their discretion. They apply to smaller HMO’s.
- Selective licensing schemes can be introduced by councils at their discretion. All private rented properties within a selective licensing area require a license, unless otherwise exempt, no matter the make up of the household.
The penalties for operating an unlicensed property are significant. Councils can issue penalties up to £30,000 and tenants can claim back up to 12 month’s rent.