What we know so far (March 2018)

Nottingham City Council have announced the introduction of Selective Licensing which will cover 90% of homes in the private rental sector within the city boundary.

Selective Licensing Logo
The proposed implementation date is the 1st August 2018.

A license will be a LEGAL REQUIREMENT for EACH property a Landlord owns within the Nottingham City catchment area. You can check whether your property is covered by the proposed license scheme through the Nottingham City Council website by using the following link: geoserver.nottinghamcity.gov.uk/myproperty

We are still waiting for the Executive Board of the Council to decide the cost of a license (a decision is due during April 2018) however, in their press release of the 14th February they stated that “it is likely to be less than £2 per week, per property for accredited landlords and no more than £3 a week for non-accredited landlords.

Whist we await final confirmation on the license cost, it is worth noting the Nottingham City Council website is currently proposing a license fee of £780 per property, reducing to £520 for accredited Landlords.

A license will last for 5 years and the license fee will need to be paid in a lump sum at the outset.

Who do the council define as an accredited landlord?

You will not need to hold accreditation to be able to apply for a license, however Landlords who obtain accreditation will receive a discount on their license fee. Unfortunately, using a reputable managing agent like David James to look after your property is not viewed as accreditation in the eyes of the local authority or warrants a discount on the licensing fee.

Nottingham City Council have for some time been running a voluntary accreditation scheme through organisations DASH and UNIPOL. The DASH scheme covers the private rental sector with UNIPOL covering student properties. Any Landlord can apply to sign up with DASH for accreditation, however they must abide by a set of regulations known as the ‘Nottingham Standard.’ These regulations cover far more than basic legal requirements and even the additional requirements stated within the Selective Licensing legislation. The ‘Nottingham Standard’ regulations extend (but aren’t limited to) areas such as a minimum number of power points in certain rooms within the household, mains operated fire and heat detectors and minimum rooms sizes for occupation.

The cost of DASH accreditation is £95 + VAT and lasts for three years, with a renewal fee of £45 + VAT. This covers a Landlord for up to five properties which is a cost saving for multiple property Landlords as they will not need to pay an accreditation fee for each property. However, please note that DASH accreditation is necessary for the duration of your local authority license and therefore single property Landlords will need to pay £140 + VAT (£168 including VAT) for both the sign-up fee and renewal to save £260 on their license fee over the five-year period.

Whilst we applaud DASH for their attempts to improve the condition of properties in the private rental sector, Landlords need to be aware that their properties may require extensive and costly remedial works to ensure they meet the ‘Nottingham Standard’, and therefore any perceived savings on licensing by signing up to DASH accreditation could be consumed in bringing their rental properties up to DASH’s higher standards of habitation.

What do I need to be able to obtain a license?

In addition to paying the five-year license fee, a Landlord will have to complete a detailed online application form for each property they own within the catchment area. Nottingham City Council have stipulated that each property application must be supplemented by:

  • Plans of each floor of the property

    These should show the layout of each floor, the details of amenities, include measurements and be clearly labelled.

  • Evidence of sufficient landlord insurance for the property

    Sufficient landlord insurance should include cover for tenants to be put into temporary accommodation if the property is deemed uninhabitable and public liability cover.

  • Basic Disclosure certificate (a criminal record check) for proposed licence holder and proposed manager

    You are required to provide a ‘basic’ disclosure certificate for the proposed licence holder and proposed manager. The Council can only accept ‘basic’ disclosure certificates. The Council cannot and will not accept any other form of disclosure certificate such as ‘standard’ or ‘enhanced’.

  • Proof of right to reside (to live) in the UK for the proposed licence holder and proposed manager

    Proof of right to live in the UK for the proposed licence holder and the proposed manager where these are people; If the proposed licence holder or manager is a company then this will not need to be provided.

  • Evidence of relevant training (if undertaken) by proposed licence holder

    If you have undertaken relevant landlord training in the last 3 years please provide evidence of this.

  • A valid, in date, satisfactory Electrical Installation Condition Report or an Electrical Installation Certificate
  • A valid, in date, satisfactory Gas Safety certificate (If there are gas appliances in the property)
  • Emergency Escape Lighting test certificate (If this is present in the property)
  • Fire alarm test certificate where there is a fire alarm control panel
  • Energy Performance Certificate (EPC) for the property
  • Written Fire Safety Risk Assessment (If applicable)
  • Most recent portable appliance test (PAT) certificate(If portable appliances are provided by the landlords)
  • Building regulations completion certificate and planning consents (If applicable)

Please note that the information above is taken directly from page 8 of the Selective Licensing FAQs on the Nottingham City Council website

How much is this likely to cost?

The list of certificates and documents required may look quite daunting, however your property should already hold some of the certificates requested, as they are already legal requirements. We have put together a list below of what costs could be involved:

  • Plans of each floor of the property

    Your property won’t have a compliant floorplan. We can arrange for someone to visit your property and put together a plan containing measurements as well as detailing escape routes and amenities for £25.00 + VAT (£30.00 including VAT).

  • Evidence of landlord insurance for the property

    You should already hold adequate Landlord buildings insurance, which contains provision for the re-housing of your tenants in the event of the property being deemed uninhabitable. Should you find this is not the case we can put you in touch with our recommended insurers who can offer a NIL excess policy and up to 90-day un-occupancy cover at a competitive price.

  • Basic Disclosure certificate (a criminal record check) for proposed licence holder

    A basic disclosure certificate has to be obtained personally as you will need to set up a Government Gateway ID to access the service. You can access the disclosure and barring service by using the following link: https://www.gov.uk/request-copy-criminal-record A basic disclosure check costs £25.00 and usually takes 14 days to be processed.

  • Proof of right to reside (to live) in the UK for the proposed licence holder

    A copy of identification documents such as a passport should be sufficient for this purpose.

  • Evidence of relevant training (if undertaken) by proposed licence holder

    This isn’t necessary as we are managing the property on your behalf.

  • A valid, in date, satisfactory Electrical Installation Condition Report

    You may already have an electrical installation condition report and these last for five years. Should you not hold one please be aware that an inspection covers fixed electrical installations within the property. The cost of a report is £150.00 + VAT (£180.00 including VAT) and we can arrange this on your behalf.

  • A valid, in date, satisfactory Gas Safety certificate

    If your property is rented and has a gas supply you will already hold a gas safety certificate, which is renewed annually as per legal requirements. A gas safety certificate is £60.00 + VAT (£72.00 including VAT)and covers the cost of one gas appliance within the property. Any additional appliances are charged at an additional rate of £10.00 + VAT (£12.00 including VAT)

  • Energy Performance Certificate (EPC) for the property

    Every property that has been let by an agent should hold a valid EPC. However it is worth noting that an EPC has a 10-year lifespan and given that they came into force in October 2008, EPCs will begin to expire from later this year. We will of course let you know as and when your EPC becomes close to the end of it’s lifespan. An EPC costs £50.00 + VAT (£60.00 including VAT). We are also currently seeking clarification from the local authority as to whether the EPC needs to be valid for the entirety of the license period.

  • Most recent portable appliance test (PAT) certificate

    If a Landlord has supplied appliances, they will need to be annually PAT tested by a competent person. Costs on PAT testing vary dependant on the number of appliances being tested. We can put a bespoke quote together for your property. We are also currently seeking clarification from the council on whether there will be an obligation on the Landlord’s part to PAT test appliances where they have been ‘gifted’ to the tenancy.

What else do I need to know at this stage?

There are clearly lots of questions that still need to be answered, however below are some pertinent questions and answers taken from the local authority’s FAQ’s document:

  • Do I need to tell others, like my mortgage provider, about my licence application?

    Licences are legally enforceable and may require changes to the house. People with a legal interest in the property have a statutory right to know how the licence may affect them. This would include mortgage companies, other owners, managers, leaseholders, freeholders etc.

  • Will there be a discount for multiple applications from the same landlord?

    No, it is proposed that there will the same fee for landlords despite how many properties they have.

  • Is the fee refundable if the property is sold within 5 years?

    The Council will only give a refund if a duplicate application has been made or an application has been made for an exempted property by mistake.

  • I am selling a Licensed house, what do I need to do?

    Licences are not transferable. When you sell a licensed house you must inform the Council that you have done so because the new owner will need to apply for a Licence.

  • Is the licence fee tax deductible?

    The Council understands that the fee is tax deductible as an expense in running the business, however it is recommended that landlords receive independent financial and legal advice on this. Managing agents and / or professional bodies may also be able to advise on this matter.

  • What happens if I do not comply with the licence conditions?

    You run the risk of prosecution and a possible unlimited fine. The Council can now issue financial penalties of up to £30,000 for certain offences under the Housing Act 2004. This would be instead of prosecution. It may also affect your 'fit and proper' status and your licences will most likely be revoked.

How can David James help?

We want to ensure the process of compiling information in relation to a license application and obtaining any outstanding information or certificates is as straight-forward as possible. We are currently making enquiries with the local authority to obtain a copy of the online license application so we can assess what is involved in the process. Our aim is to be able to offer an end-to-end service in relation to the collation of information and submission of the license application on behalf of our Landlords to enable you to leave the matter in our hands.

We will continue to update our website as more information is released in relation to the license process and we would encourage Landlords to meet with us to discuss the process and it’s implications further. Should this be of interest, please contact our Director, James Roys to arrange a meeting.

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