Landlord Licensing Scheme

Liverpool City Centre
0151 236 4400

0151 733 9000

Landlord Licensing
– Liverpool's selective licensing scheme.

At the beginning of March, Liverpool City Council confirmed that they would be introducing a city wide licensing scheme for all private landlords within the city effective from April 1st 2015. The objective of the letter sets out what LCC perceive the benefits of the scheme are, our approach as a business then outlining your responsibilities together with timeframes and costs.

We have been in discussion with LCC since last year and have worked in partnership with other major lettings agents to negotiate an improved commercial proposition for those landlords whose properties are managed by agents who, like ourselves, are members of either ARLA or NALS and who subscribe to the Property Ombudsman redress scheme. We have been successful in persuading LCC to become the first authority to adopt a co-regulation scheme working in partnership with regulated agencies.

The scheme is being introduced under the government’s selective licensing laws and signing up for it is compulsory. We took legal advice early in the process on the merits of contesting the introduction and the costs of contesting the introduction were prohibitive. Whilst LCC are an early adopter in introducing this scheme many other authorities have this planned.

The benefits of the scheme
LCC’s document states; “The scheme will ensure that licensed landlords in the city are ‘fit and proper’. Before landlords are granted a license they will be asked to declare convictions for dishonesty, violence, drug related offences or breaches of the housing or landlord and tenant laws. Licensed landlords’ properties must meet fire, electric and gas safety standards and be in a good state of repair. Licensed landlords must be able to deal effectively with any complaints about their tenants”

A copy of the full conditions are available both on our own website and also on the Liverpool City Council website.

For the bulk of the homes that we manage the only exemptions are those with an HMO license (Homes for Multiple Occupation), regulated tenancies that have lasted over 21 years, commercial premises or vacant properties. As soon as any vacant properties become let they will need to be licensed.

License Holder
The 2004 Housing Act requires that the Council can only grant a license to the most appropriate person and they must be in control of their property. There is no more definitive guideline however in a meeting with LCC on 26th February 2015 they stated that the most appropriate person would be the person / company responsible for collecting the rent and approving the repair process. They accepted that in the case of Managing agent this would be a delegated authority with a spend limit in accordance with the contract in place between the landlord and the managing agent. LCC also stressed that in the event of a property falling into disrepair and appropriate remedial action not undertaken by either the agent or the landlord, LCC would prosecute both parties.

They also state that LCC will not grant a license to a property owner who is not in control of their property for rent collection, repair reporting or managing problem tenants through the ASBO process.

It is the responsibility of the license holder to pay the license or to ensure there are sufficient funds in place to do so. The licenses are non-transferrable during their five year duration and such should you switch agents or opt to manage the property yourself you will have to apply for and pay for a new license. If you sell the property and the management remains with the license holder for the duration of the term then there is no penalty charge. However if you sell the property and the new owner wishes to manage the property themselves they would need to apply and pay for a license in their own name.

Obligations of the License Holder / Landlord
As one of our current landlords your property will meet all the basic requirements such as EPC, Gas Safety Certificate, tenants with references, legally binding tenancy agreement that covers nuisance and anti social behavior. The only exception is an electrical safety certificate for each appliance in the property. Whilst this won’t be enforced for April 1st we will be writing to each landlord individually with a cost of providing the necessary certificate, this is specific to this scheme and doesn’t form part of the current regulatory requirement hence we have not implemented it previously. If you instruct your own contractor or require us to have it arranged for you, you must provide us with instructions by 1st April 2015.

The registration process is in two phases. All properties must be registered on-line with Liverpool City Council by April 1st 2015. This is a mammoth task that we are going to undertake for around 1500 properties. The initial registration includes brief property details and details of the license holder. We will register every property with Venmore as the license Holder. Part of the registration process is the commitment to pay the initial £100 of the license fee to LCC in April 2015, therefore if your property is let and managed on or before the 1st April 2015 we will retain £100 from the rent received in March to ensure that we are in funds to make the payment for your property. If you do not have available funds we will contact you to collect payment. The license will last for five years with all fees payable in the first year. At the meeting on the 26th February 2015 LCC couldn’t confirm an exact date for taking the second part of the payment. As soon as we know you will be contacted.

In our meeting today LCC stated that the on-line registration for phase 2 of the process has not yet been finalised or tested and that they hoped to complete that phase before the end of March. There will be no charge for changing the name of the license holder between phase 1 and phase 2.

Opt Out Process
Unless you confirm in writing to ourselves prior to April 1st 2015 we will complete the registration process in April with Venmore as the license holder of your property.

You can contact us by email or via post at the address on the footer of this letter.

One of the concessions that we have agreed is that by being a regulated agent in an approved scheme the cost of the license will be significantly reduced to our clients. Please contact Hayley Davies on 0151 236 4400 for further information.

The reduced fee will only apply to licensed regulated agents where the application is made online.

There will be an administration fee charged by Venmore for carrying out the registration, fee collection and general administration of the scheme, as we don’t have visibility of the website for the second part of the process we can’t determine that fee. As a landlord having your property managed by a regulated agent there will be a significant saving on registering it through Venmore as opposed to directly.

The cost of electrical certification will vary property to property and we are currently negotiating preferential rates with our contractors to ensure the cost is competitive.

Please be assured that we are working hard to ensure that the impact on your time and the financial implications are kept to a minimum.

Update - 14.03.15

Further to the above there has been a change in Government policy outlined by the Housing and Planning Minister, Brandon Lewis, who has announced reforms of Selective Licensing, restricting local decision-making powers meaning that local councils will no longer be empowered to licence landlords across a whole borough or city . The changes are to come into force on 1 April 2015. Liverpool City Council's comment today is that they are looking very carefully at the wording of the reforms before making an announcement, given the short time frame we have to register properties we are continuing to register properties as per our communication last week as their scheme was approved before the dates the reforms were announced. We will keep you updated next week as the situation becomes clearer.

Since 2010, local councils have had the power to licence landlords across an entire borough or jurisdiction in order to combat issues such as anti-social behaviour in so-called 'hotspot areas'. This has led to a sharp increase in the number of schemes being introduced.

However, today's changes mean that councils will require government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market likely to be above 20‰ of either the geographical area covered by the council or the local private rented sector (PRS).

It's not an ideal situation , we are in regular contact with the Council seeking clarification of any changes to their Licensing scheme and will provide any updates as soon as we receive them.

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