Property licensing is the Local Authority’s process of improving living standards and fire safety in rental accommodation.
When determining whether you need a property licence, it is important that you are aware of both the national and local authority regulations. The licensing rules are not consistent across every London borough, with each individual borough creating its own set of licensing rules. This creates a lot of confusion and make it extremely difficult for agents and landlords to know whether their property requires a licence or not and a professional licensing company should be instructed to guide you through the process. In short, the type of licence required will depend on the property itself, how it is tenanted and the borough that it is located in.
The most recognised type of licence is an HMO licence, however this has a much confused reputation. The stereotype for an HMO consists of overcrowded accommodation with terrible living conditions and sparse facilities. Although local authorities are aiming at tackling this issue through licensing, the definition of an HMO is any property that is let to 3 or more tenants, forming 2 or more households and sharing facilities. Thus in London there are licensing schemes that apply to smaller HMOs of 3+ sharers and seek to ensure a standard quality of life in all let properties as well as larger HMOs.
Each council’s licensing requirements are applied to properties on a case-by-case basis, taking into account the size of the property and the number of tenants and type of tenancy. For example the fire safety regulations are stricter for a 5 tenant bedsit HMO than for a family home. The level of fire safety and health and safety required in a property is supported by case studies which have illustrated the respective risk factor in each type of residential property. The guidance and enforcement comes from the HMO Management Regulations 2006 or RRO (The Regulatory Reform (Fire Safety) Order 2005) and the Housing Act 2004 under HHSRS.