Selective licensing: the whole borough

The High Court has held that a council acted unlawfully when designating the whole of its area as subject to additional and selective licensing under the Housing Act 2004. Jonathan Manning and Justin Bates explain the ruling.

In general terms, the owner of a house in multiple occupation (“HMO”) in England which comprises three or more residential storeys and which contains five or more persons who form two or more households is required by statute to obtain a licence from the local housing authority (2004 Act, Pt 2 and Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006, SI 2006/371). This is known as “mandatory licensing”.

The 2004 Act also permits local housing authorities to designate parts, or the whole, of their local government areas as areas subject to additional and/or selective licensing. In general terms, additional licensing applies to HMOs which are not subject to mandatory licensing (s.56), whereas selective licensing applies to privately rented houses which are not HMOs (i.e. those which are let as separate, or single, dwellings – ss.79, 99). If an authority does make a designation, the effect is to require landlords of properties specified in the designation, and within the area to which it applies, to apply for and obtain a licence, failure to do which is a criminal offence (2004 Act, Pt 2, ss.56-60 (additional) and Pt 3, ss.80-84 (selective)). Licences will incorporate licence conditions relating to the management of the property failure to comply with which is also a criminal offence (ss.67 and 90).

By ss.56(3) (additional licensing) and 80(9) (selective licensing) before any designation may be made the authority must take reasonable steps to consult persons who are likely to be affected by the designation.

In either case, the designation will not be effective unless it is either confirmed by the Secretary of State or it falls within a description of designations in relation to which there is a general approval from the Secretary of State (ss.58; 82).

On 30 March 2010, the Secretary of State issued a general approval to all local housing authorities in England, but the approval it contains is conditional upon the consultation under ss.56(3) and 80(9) having lasted for not less than 10 weeks: Housing Act 2004: Licensing of Houses in Multiple Occupation and Selective Licensing of Other Residential Accommodation (England) General Approval 2010.

In April 2014, Enfield decided to designate their entire borough as areas of additional and selective licensing. Part of the rationale for choosing the whole of their borough was to prevent bad landlords and/or tenants moving to an unlicenced part of the borough. That decision had been proceeded by a period of “listening and engagement” and then an 8-week consultation on the specifics of the proposed designation.

The claimant was a landlord with one property in Enfield. He sought judicial review of the designations, arguing that: (i) Enfield had failed to consult persons likely to be affected as they had not consulted anyone in the neighbouring boroughs; and, (ii) Enfield could not rely on the General Approval as the consultation period had only been 8-weeks long.

Enfield argued that: (i) whilst they had not specifically consulted anyone outside their borough, they were entitled to focus on those within their area as they would be most affected; and, (ii) the formal consultation period should be aggregated with the “listening and engagement” period, such that the total consultation period was more than 10 weeks.

In R (Regas) v LB Enfield [2014] EWHC 4173 (Admin), December 11, 2014 HHJ McKenna, sitting as a High Court Judge, allowed the claim. It was obvious that people outside the borough should be consulted. Part of the rationale for designating the whole borough was to prevent bad landlords and/or tenants simply moving to an unlicensed part. The logical implication of that fear was that they might move to the neighbouring boroughs. It followed that those neighbouring authorities, together with residents and businesses in those areas should have been consulted.

It was also not possible to aggregate the consultation periods as Enfield contended. The “listening and engagement” exercise was too general and lacking in specifics to constitute consultation.

Jonathan Manning and Justin Bates are barristers at Arden Chambers and appeared for the claimant in this case.