Licence Application Process

Understanding the property licensing application process

When you submit a mandatory HMO, additional or selective licence application to your local council, it can sometimes feel a bit of an anti-climax. After all, apart from receiving an acknowledgement, you may hear nothing more for several months.

In due course, when your application reaches the top of the pile, the council will start to process your licence application. Exactly how this is done can vary considerably. Whilst some councils will arrange to inspect your property, others will process your application based on a desktop examination of the paperwork.

Once the council is ready to approve or refuse your licence application, they must follow the prescribed process in Schedule 5 of the Housing Act 2004. We have prepared this simple guide to explain what happens next.

Notice of intention to approve your licence application

If the council intend to approve your licence application, they will issue a notice setting out the reasons for their decision. At the same time, they will send you a copy of the draft licence containing the proposed terms and conditions.

The council must send this notice to the applicant and all other interested parties and must allow a period of at least 14 days for any representations to be submitted.

When the draft licence is received, there is a tendency for landlords and agents to think job done, file the paperwork and wait for the final licence to arrive. In our experience, that is entirely the wrong thing to do and if you read on, we will explain why.

The draft property licence

When you receive the draft licence, it is vital to check through the paperwork to ensure all the details are correct and that you understand and accept all the proposed terms and conditions.

Why is this important? Well, once a licence has been approved, you cannot change the licence holder without applying for a new licence and paying another fee. Plus, if the licence holder fails to comply with a licence condition, they they commit an offence and can be prosecuted or issued with a civil penalty of up to £30,000. Saying you didn’t read the conditions is no excuse!

What are the key things to check on the draft licence? Our advice is to check the complete document from start to finish or you could miss something important. For example:

  • Is the proposed licence holder correct? Should it be an individual, limited company or another legal entity?
  • Does it show the correct property address?
  • What is the proposed length of the licence? It can be up to five years.
  • Do you agree with any proposed occupancy limit for the property and/or individual bedrooms within it?
  • If occupancy is being reduced due to undersized rooms on a mandatory HMO or additional licence, has the council allowed a reasonable timescale to achieve compliance?
  • Are all the licence conditions fair, reasonable and clearly defined so you know what is required?
  • Are they any property-specific conditions requiring works to be carried out? If so, is the schedule of work reasonable and has the council allowed sufficient time for you to complete the work? 

As you can see, there is a lot to think about and you will only have a short period of time to respond, so you need to act quickly.

Notice of intention to refuse your licence application

Whilst it doesn’t happen often, the council could decide to refuse your licence application. If that happens, they will issue a notice setting out the reasons for their decision.

The council must send this notice to the applicant and all interested parties and must allow a period of at least 14 days for any representations to be submitted.

Receiving such a letter from the council can be a heart stopping moment for the landlord and it necessitates urgent action. It could be that the proposed licence holder and/or manager is not fit and proper, that the management arrangements are inadequate or that the property is deemed unsuitable for HMO use. The notice must explain the reasons, so you need to study it carefully.

Preparing a licence representation

There are two main reasons for submitting a licence representation:

  • the council is proposing to refuse the licence application and you want them to reverse their decision; or
  • the council is proposing to approve the licence application, but you want to negotiate changes to the occupancy limit and/or terms and conditions on the licence.

Either way, it is important to prepare a detailed representation that explains your reasons and contains constructive suggestions about how the licence should be amended. In doing so, it can be useful to include examples of relevant Tribunal decisions and give comparative examples of what is permitted in other areas.

In our experience, the two most contentious issues are fire precautions and the occupancy limit, particularly in HMOs. We also come across some badly drafted conditions. For example, requiring prescribed information on tenancy deposits to be provided to the tenant at the time the deposit is taken, rather than within 30 days of receiving the deposit.

Some councils ask you to upload your representation to an online system whereas others accept representations by email or post. Either way, make sure you follow any instructions, submit the representation by the deadline and get confirmation of receipt.

What happens next

The council must consider your representation before deciding whether to approve or refuse the licence application. If the council propose to reverse their decision, or to modify the licence, they will normally issue an amended draft licence and repeat the consultation process again.

Alternatively, if the council decide not to alter their decision, they will approve or refuse the licence application and must send a copy of the licence to all interested parties within 7 days of making their decision.
 
Appealing to the First-tier Tribunal

Once a licence has been approved or refused, the landlord can appeal to the First-tier Tribunal within 28 days if they disagree with the council’s decision. In our opinion, this should be seen as an option of last resort. It is far better to negotiate and reach agreement with the council, if you can.

We are developing separate guidance to explain the First-tier Tribunal appeals process and we will add a link when it is ready, so watch this space!

Conclusion

Over the last few years, we have had considerable success in resolving licensing issues through the representation process, whilst at the same time helping clients to maintain a positive working relationship with their local council.

Submitting a licence representation is far quicker and cheaper than pursuing an appeal. You may choose to manage the process yourself or you could seek expert advice.

If you need help in preparing a licence representation, please drop us a line to discuss the situation (here).

You can also read client reviews on Trustpilot here.  

Examples of successful licence representations

2019
South East London: selective licence. Following receipt of a draft licence, we helped our client negotiate for three licence conditions to be deleted and a fourth condition to be amended (case ref: 158)

West London: mandatory HMO licence. Following receipt of a draft licence, we helped our client negotiate for the maximum occupancy to be increased from five to ten people by negotiating the provision of additional kitchen facilities (case ref: 152)

South East London: additional licence. Following receipt of a draft licence, we helped our client negotiate a five year licence and an 18 month period to resolve an occupied but undersized bedroom (ref: 138)

North West England: mandatory HMO licence. Following receipt of a draft licence proposing to exclude two bedrooms from use as they were considered too small, we helped out client negotiate for all six bedrooms to be occupied

2018
South East London: additional licence. Following receipt of a notice of intention to refuse the licence as the kitchen was deemed too small for three sharers, we helped our client negotiate for the decision to be reversed and the licence was approved (case ref: 81)

North East London: additional licence. Following receipt of a draft licence, we helped our client negotiate changes to various licence conditions that were not appropriate to the nature and occupancy of the property (case ref: 48)

2017
North West London: additional licence. Following receipt of a draft licence that restricted occupation to nil occupants, we helped our client negotiate a scheme of works which resulted in occupancy being increased to five people (case ref: 7)

For all the latest news and events, you can sign up for our free London Property Licensing newsletter here.

Advertise your business here
Water for Kids charity advert
Sign up to our London Property Licensing newsletter