On 1 October 2016, Tower Hamlets Council became the latest authority to bring in a licensing scheme for privately rented properties. From this date, landlords renting properties in the area must have a licence (at a cost of £520.00 for a 5-year period) in which to rent their properties out.
To be clear, it does not matter if the property was let prior to 1 October 2016 - if that let exists on this date, the landlord must obtain a licence to be compliant.
It follows similar schemes put in place in other areas, such as Waltham Forest and Newham.
Are you a landlord/managing agent, you must check (and continue to check regularly) with the relevant local authority whether there is a licensing scheme in place.
Tempted to ignore the scheme and avoid the fee? Don't do it. Under s.96 Housing Act 2004 it is a criminal offence for a landlord/managing agent to rent or manage a property that requires a licence but does not have one. The penalty is a criminal record and an unlimited fine.
As if that isn't dire enough, no valid s.21 notice can be served on a tenant whilst the property remains unlicensed. In certain circumstances, the local authority and the tenant can apply to the First-tier Tribunal for a rent repayment order, meaning the landlord may have to pay rent back for periods where the property should have had a licence, but did not.
It is yet a further trap for the unwary landlord, with potentially extremely serious consequences. Landlords and agents must audit their property portfolios regularly and should seek specialist advice if in any doubt over their position.
The council decided on 2 February 2016 to introduce a selective licensing scheme for private landlords renting properties to tenants within the following areas: Spitalfields and Banglatown Weavers Whitechapel This will mean that private landlords will need to obtain a licence from the council before a property can be rented out in these areas. The scheme will be introduced on 1 October 2016.