With the recent excitement over the election, residential landlords outside the North West may well have missed the news that Liverpool City Council became the first to introduce a compulsory city- wide licensing scheme for residential landlords.
From 1st April this year all Liverpool landlords (with a few minor exceptions) were required to obtain a licence from the local authority to enable them to let residential property.
The new rules require private landlords in Liverpool to obtain a licence at a cost of £400 for the first property and £350 for each subsequent property. Each licence is valid for five years after which it will require renewal.
Liverpool City Council will be looking to establish whether the landlord is a ‘fit and proper person’. The process includes an investigation into whether the applicant has a history of convictions for dishonesty, violence, drugs or contravention of housing law. Applicants will be required to meet certain safety standards, keep the property in a state of good repair and deal with complaints about antisocial behaviour.
The scheme has its origins in the Housing Act 2004, which gave local councils the power to licence property in selective areas, typically where problems existed with housing quality and antisocial behaviour. These schemes already exist across the country. However, Liverpool has gone one step further and introduced a blanket city- wide scheme.
The scheme is compulsory and the consequences for failing to register are significant. A failure to obtain a licence when required could result in fine up to £5,000 and ultimately see the local authority take over the property concerned. A further concern for landlords is uncertainty as to whether a Section 21 notice will be valid in a situation where a licence has not been obtained.
The motivation for the introduction of a blanket scheme is open to debate. Clearly it is difficult to argue in principle with a scheme designed to catch out rogue landlords; though whether this scheme is likely to have any impact upon this group is doubtful. A more cynical view would be that the scheme will simply generate revenue for cash-strapped local authorities, with the inevitable consequence that licensing fees will be passed on to tenants in the form of higher rents.
Regardless of the motives, it seems inevitable that other local authorities will be monitoring developments in Liverpool carefully and giving consideration to introducing their own blanket scheme in the future.
All landlords are advised to check with their local authority to establish whether they are in a licensing scheme area and make the necessary application if required.
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