Selective licensing and its impact on Section 21 notices

2 July, 2015

In some areas local authorities are beginning to designate their district or part of their district to be subject to licensing requirements. This appears to be more prevalent in London Boroughs.

Where such selective licensing applies, normally all houses within the private rented sector for that area must be licensed, except where they are required to be licensed as Houses in Multiple Occupation. This restriction can be imposed if the area is or is likely to become an area of low demand for housing, and the designation is likely to lead to improvements in the economic and social conditions of the area.

There are serious implications for landlords who control a property required to be licensed under a selective licensing scheme, not least because it is a criminal offence to manage or control a property that is not licenced, if it is required to be so.

Selective licensing requirements can also restrict the termination of assured shorthold tenancies.  Under Section 21 of the Housing Act 1988, a landlord may serve a notice (a Section 21 notice) on an assured shorthold tenant giving two months’ minimum notice that the landlord intends to apply for possession. Provided that the statutory requirements are met, a court must make a possession order. No element of tenant default is required.  A landlord may not, however, give a Section 21 notice to a tenant of a property that is required to be licensed under a selective licensing scheme, but that is not so licensed.

Whether a selective licensing scheme applies is therefore an important consideration for landlords or those advising landlords when seeking possession of a property let to an assured shorthold tenant.

 

Reviewed in 2015