Selective Licensing Exemptions!

Selective Licensing

Understanding Selective Licensing Exemptions under the Housing Act 2004 Part 3

Landlords across England often face questions about selective licensing a scheme introduced under Part 3 of the Housing Act 2004 to improve housing standards and tackle anti-social behaviour. While licensing is mandatory in designated areas, not all properties require a licence. Knowing the exemptions can save landlords time, money, and stress.

What is Selective Licensing?

Selective licensing allows local authorities to require landlords of privately rented properties in certain areas to obtain a licence. It’s designed to ensure properties meet safety and management standards.

Who is Exempt?

Several categories of properties and tenancies are exempt from selective licensing:

1. Social Housing

• Properties let by:

  • Non-profit registered providers of social housing.

  • Profit-making registered providers (for social housing only).

  • Bodies registered as social landlords under the Housing Act 1996.

    
    

2. Specified Exemptions

• Properties subject to:

  • Prohibition Orders.

  • Certain business or agricultural tenancies.

  • Tenancies managed by public bodies (local authority, police, NHS).

    
    

3. Other Common Exemptions

• Long leases (over 21 years) occupied by the leaseholder.

• Family arrangements (tenancy granted to a family member).

• Student accommodation under an approved Code of Practice.

• Buildings regulated under other legislation (e.g., care homes, bail hostels).

  
  

Family Arrangements (Tenancy Granted to a Family Member)

One of the common exemptions under Part 3 of the Housing Act 2004 is where a tenancy or licence is granted to a family member. This exemption recognizes that family arrangements are typically informal and do not require the same level of regulatory oversight as commercial lettings.

Who Qualifies as a Family Member?

The term “family member” is broadly defined and usually includes:

• Spouse or civil partner.

• Parent, grandparent, child, grandchild.

• Sibling.

• Step-relatives and in-laws (e.g., stepchild, son-in-law, mother-in-law).

Key Conditions

• The tenancy must be genuine and not a sham to avoid licensing.

• The property must be occupied by the family member as their main residence.

• No commercial arrangement intended to circumvent licensing rules.

  
  

Why This Matters

If you let your property to a family member under these conditions, you do not need a selective licence. However:

• Keep basic documentation (e.g., tenancy agreement or written confirmation of relationship) in case the local authority requests evidence.

• If the arrangement changes (e.g., family member moves out and property is let to a non-family tenant), licensing requirements may apply.

  
  

Temporary Exemption Notices (TEN): What Landlords Need to Know

A Temporary Exemption Notice (TEN) is a short-term solution for landlords who are in the process of making their property exempt from selective licensing. It’s designed to give you breathing space while you complete actions such as selling or transferring ownership.

When Can You Apply for a TEN?

You can apply for a TEN if:

• You are selling the property and have a signed agreement or proof of sale.

• The property is being transferred to a family member or another exempt category.

• You are taking steps that will remove the property from the licensing requirement (e.g., converting it into owner-occupied housing).

  
  

⏳ Duration

• Initial Period: 3 months.

• Extension: One additional 3-month period may be granted in exceptional circumstances.

• After this, if the property is still not exempt, you must apply for a licence.

  
  

📄 Evidence Required

Local authorities will expect:

• Proof of sale (contract or solicitor’s letter).

• Probate documents if the property is part of an estate.

• Any other documentation showing steps toward exemption.

  
  

⚠️ Important Points

• A TEN does not exempt you indefinitely—it’s a temporary measure.

• Failure to apply for a licence after the TEN expires can lead to penalties.

• Apply as soon as possible once you know you’re taking steps toward exemption.

  
  

Why It Matters

Failure to comply with licensing requirements can lead to:

• Civil penalties.

• Rent Repayment Orders.

• Criminal prosecution in serious cases.

  
  

Quick Tips for Landlords

• Check exemptions first before applying for a licence.

• Apply for TEN promptly if you’re selling or transferring the property.

• Keep documentation ready for proof of exemption or TEN application.

• Stay updated on local council licensing schemes.

Are you considering selling due to selective licensing?

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