London Borough continued to process landlord licence applications after both licensing schemes had ended

Tuesday, August 20th, 2024 - London Property Licensing exclusive

An investigation by London Property Licensing can reveal a local authority continued processing additional and selective landlord licence applications months after their licensing schemes ended.

Under Parts 2 and 3 of the Housing Act 2004, local authorities can implement additional and selective licensing schemes for certain private rented homes. These licensing arrangements have existed since 2006, and individual licensing schemes can last for up to five years. 

In the London Borough of Hackney, a borough wide additional licensing scheme and a selective licensing scheme covering three wards of Brownswood, Cazenova and Stoke Newington came into force on 1 October 2018. Both schemes continued for five years and ended on 30 September 2023.

Hackney Council’s additional and selective licensing schemes were beset with IT issues. A cyber attacked in October 2020 led to hackers gaining access to and encrypting 440,000 files which affected at least 280,000 residents and other individuals including staff (read here). This led to significant delays in processing licence applications.  

Wrong scheme end date advertised

In early October 2023, London Property Licensing contacted Hackney Council to inform them the licensing scheme end date published on the council website was incorrect as it stated 30 October 2023.

The council responded to acknowledge the error and confirmed the additional and selective licensing schemes had ended on 30 September 2023.  

In a surprising move, Hackney Council advised that all licence applications submitted before the end date of the additional and selective licensing schemes would still be processed (read here).

Processing of licence applications continued

In January 2024, London Property Licensing again contacted Hackney Council to request an update after discovering licence applications were still being processed several months after the licensing schemes ended. 

A short reply from a senior officer confirmed they were continuing to grant new additional and selective licences for applications received before the schemes ended.

Several London Property Licensing clients have been issued with draft and final licences after both licensing schemes ended. This includes new licences granted in January, February and March 2024, some over five months after the licensing schemes ended. At time of publication, a notice was still displayed on the Hackney Council’s website to say licence applications were still being processed.

The legal position

The scheme designations made by Hackney Council ended on 30 September 2023. The Housing Act 2004 makes clear that scheme designations cease to have effect on that date and a licence can only be granted or refused if the property is required to be licensed. 

In our experience, local authorities process all applications before their licensing scheme ends, cancel outstanding applications and refund the fee, or place the application on hold if they are about to implement a new scheme. 

In the case of Hackney Council, there has been no public consultation on plans to implement replacement additional and selective licensing schemes.   

Scale of the problem unknown 

In the absence of any update, a Freedom of Information request was submitted to Hackney Council in April 2024 asking how many licence applications remained outstanding when both licensing schemes ended and how many licences had been approved since that date.

Apart from an automated acknowledgement, no reply was received within 20 days. All subsequent reminders went unanswered.

In early June, the matter was escalated to the Information Commissioner’s Office who wrote to Hackney Council and asked them to respond.

With still no reply, on 16 July 2024 the Information Commissioner’s Office issued a decision notice stating that Hackney Council had breached section 10 of the Freedom of Information Act by failing to respond.   

The ICO have given Hackney Council 30 working days from 16 July to respond to the FOI request, lodge an appeal with the First-tier Tribunal or risk the ICO referring this matter to the High Court where it can be dealt with as contempt of court. To date (20 August 2024), the FOI response remains outstanding.

Richard Tacagni, MD, London Property Licensing commented:

“For Hackney Council to continue processing additional and selective licence applications months after their schemes ended is highly unusual. In fact, I would go as far to say I have never seen a local authority interpret and apply the legislation in this way. 

“When licences are granted in 2024 and expire in 2029 for a scheme that ended in 2023, something has gone seriously wrong. The whole situation is causing considerable confusion to landlords and agents who are unsure what’s happening.

“Questions also remain about whether licensing fees can be retained by the council if the processing and approval of the licence did not start until after the schemes ended.”

London Property Licensing invited Hackney Council to comment but no response had been received by the time of publication.

Our free guide containing more information about property licensing and HMO planning restrictions in the London Borough of Hackney is available here.

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