Property Licensing: An Overview
The three types of licensing scheme and why they matter.
The three licensing schemes
There are three types of property licensing scheme in England: mandatory HMO licensing, additional licensing and selective licensing. Each has different triggers and requirements.
- Mandatory HMO licensing: applies to all HMOs with 5+ occupants from 2+ households
- Additional licensing: applies to HMOs in designated areas (set by local authority)
- Selective licensing: applies to all privately rented properties in designated areas
Check your local authority's website for current licensing schemes in your area. Schemes change regularly — a property that did not require a licence last year may require one now.
Consequences of unlicensed operation
Operating a property that requires a licence without one is a criminal offence. The consequences are serious: unlimited fines, rent repayment orders (up to 12 months' rent), inability to serve valid Section 8 notices, and banning orders.
Operating an unlicensed HMO is a criminal offence with an unlimited fine. The local authority can also apply for a rent repayment order requiring you to repay up to 12 months' rent.