Selective Licensing

Nottingham City Council and Gedling Borough Council have now introduced Selective Licensing. Nottingham City’s scheme covers 90% of the private rental property in the city boundary whilst Gedling Borough have introduced Selective Licensing for their Netherfield Ward. A licence is a LEGAL REQUIREMENT for EVERY property a Landlord owns within each local authority’s catchment area.

You can check whether your property is covered by Nottingham City’s scheme here

Gedling Borough’s Selective Licence designation can be found here

Nottingham City Council’s licence is £890 per property, reducing to £670 for accredited Landlords. Gedling Borough Council’s licence scheme costs £640 reducing to £490 for accredited Landlords. A licence will last up to for 5 years and the licence fee will need to be paid at the outset of the licence period. The licence fee is paid in two parts; the first payment is paid on submission of the licence application and a balancing payment is payable once a draft licence has been granted.

There are license conditions that the council expect license holders to take responsibility for. Here at David James, we can handle these license conditions on your behalf through our comprehensive property management service. If you currently manage your own property and are concerned about the obligations Selective Licensing place upon you, or if your current managing agent is not living up to expectations, then contact us to discuss matters further.

David James would be happy to manage your Selective Licence application. We can collate and submit an application for £60.00 including VAT (£50.00 plus VAT).

To help you understand Selective Licensing a little further, we have put together the sections below which should answer many of your questions:

Selective Licensing FAQ’s

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.

Both local authorities 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 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 £80 + VAT. This covers a Landlord for up to five properties (and up to 24 properties on renewal) 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 licence and therefore single property Landlords will need to pay £175 + VAT (£210 including VAT) for both the sign-up fee and renewal. This would only save you £10 on the licence fee with Nottingham City Council and cost you £60 more with Gedling Borough Council.

We applaud DASH for their attempts to improve the condition of properties in the private rental sector. However, Landlords need to be aware that their properties may require extensive and costly remedial works to ensure they meet the ‘Nottingham Standard’ and therefore purely signing up for DASH accreditation for savings on a licence fee could be more than offset by the costs involved in bringing a rental property up to DASH’s higher standards for habitation.

In addition to paying the five-year licence fee per property, a Landlord will have to complete a detailed online application form for each property they own within the catchment area. Both local authorities have stipulated that each property application must be supplemented by:

Evidence of sufficient landlord insurance for the property
Landlord insurance which states the property is designated as a buy-to-let and that there is sufficient public liability cover.

Proof of right to reside (to live) in the UK for the proposed licence holder
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. If training has not been undertaken it will be a condition of the license that training is undertaken within 12 months of the license being granted.

A satisfactory Gas Safety certificate (If there are gas appliances in the property)

An Electrical Inspection Condition Report (EICR)

An Energy Performance Certificate (EPC) for the property

In addition to the cost of the licence itself, Landlords should consider the following items and their associated costs:

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)
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, expired EPCs are now becoming common. An EPC costs £62.50 + VAT (£75.00 including VAT).

Electrical Inspection Condition Report (EICR)
Our trained electricians can carry out an EICR for £150.00 plus VAT (£180 inc. VAT). EICRs last for five years.

There are clearly lots of questions, 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 the same fee for Landlords despite how many properties they have. Should a landlord have a number of self-contained properties within the same development (such as a number of apartments in a block) they may be able to apply for a block licence which could work out cheaper.

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 non-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 if they are also intending to rent it out.

Is the licence fee tax deductible?
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.

The process submitting a license application is time-consuming as is ensuring all properties are compliant and collating all the necessary information for an application.

Should a Landlord wish, we can collate and submit the application on their behalf for £50 plus VAT (£60 inc. VAT) per licence. If we do not manage your property and you require us to submit an application on your behalf, we can carry out this service for you. Please contact our team who will be happy to provide a list of all documents and certification we require in order to submit an application on your behalf.