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Agents could potentially be prosecuted instead of landlords for unlicensed homes

Letting agents who fail to obtain licences for rented properties that fall under selective licensing rules could be prosecuted either alongside or instead of landlords for failing to license properties on their books, according to David Kirwan, from Kirwans law firm. 

The solicitor warns that a conviction could result in crippling fines and even a criminal record for agents. 

He said: “Councils such as Liverpool have made it clear that they will go after managing agents that they deem to be flouting the rules and will not hesitate to prosecute where they feel it is appropriate.”

In September 2018, a managing agent was fined almost £4,000 and handed a criminal record under selective licensing laws after pleading guilty to renting out 12 properties without a licence from Liverpool City Council.

At that point, the council was reported to have served 1,700 legal notices since the city’s landlord licensing scheme had begun in April 2015 and was at the time considering almost 1,300 cases for prosecution.

In addition, a Freedom of Information (FOI) request by the National Landlords Association made earlier this year revealed that Liverpool City Council was the frontrunner when it came to prosecuting letting agents, with a total of 13 prosecuted in the four-year period between 2014/15 to 2017/18.

By comparison, just over half - 53% - of the 20 councils questioned had not prosecuted any letting agents, while a further 32% had prosecuted three or less.

Liverpool is not the only council to have pursued letting agents under selective licensing rules; in May this year, a landlord and their managing agent were ordered by Canterbury magistrates to pay a fine of £1,000, in addition to costs of £120 and a victim surcharge of £100 for renting out flats without a selective licence from Thanet District Council.

Kirwan continued: “Section 88 of the Housing Act 2004 states that the proposed licence holder is ‘out of all the persons reasonably available to be licence holder in respect of the house, the most appropriate person to be licence holder’. It also states that the proposed manager of the house is either ‘(i) the person having control of the house, or (ii) a person who is an agent or employee of the person having control of the house’.

“Clearly the legislation anticipates that someone who is managing property, the subject of licensing, can also apply for and be granted a licence instead of the owner.

“In my opinion, many of the managing agency agreements which are operated by estate agents etc all over the country come within this bracket.

“It is, of course, a matter for the owner of the property who can - and often does – obtain the registration in his own name, particularly in cases where there is only a small portfolio of properties.

“Alternatively, if the property is being managed in every sense of the word by a letting agent, there is nothing to prevent thse owner delegating this function to the managing agent who then applies for the licence. This surely is what an owner/landlord is looking for when he pays his commission to the managing agent?”

Kirwan said that, according to Section 95 of the Housing Act, a person commits an offence ‘if he is a person having control of or managing a house which is required to be licensed under this part but is so not licensed’.

But despite the potential for prosecution, Kirwan said that the defence of ‘reasonable excuse’ can be extended to a managing agent as well as an owner landlord if the former is registered under the Act.

He added: “Managing agents need to be on their guard and ensure that all properties on their books are covered by the relevant licences to safeguard themselves against legal action, while landlords should check the agreements and terms of business set out in the contracts with their agents.

“However, if the agent has agreed to apply on behalf of the owner of registration then it does not matter if that is not specifically referred to in the agreement.

“It would be better, though, to have such a provision that in the terms of the ‘management’ of the property, the application for and compliance of all the terms and conditions of any subsequent registration licence is included as an agent’s responsibility.”

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    Of course letting agents must keep to the laws and regulations, and 100% insist that their clients do too. If their landlord-clients do not, they must drop these landlords-clients. Otherwise they are condoning these 'crimes'. This should also apply with agents effectively condoning landlords' demanding excessively high deposits, refusal to have EPCs, not getting annual gas safety certificates, entering their rented properties without consent of tenants, etc. etc. etc. Simple sentence: "We can no longer act as your letting agent with this tenancy."

  • icon

    The line I always liked was:- I am unable to offer you the service you want, require or deserve.

    Worked every time for me.

  • icon

    Very good anymore for the Bandwagon is it not full yet, why not bring back Execution.
    Enjoy the Recession.

  • Paul Barrett

    Perhaps this situation will 'encourage' LA to ensure that their LL clients have all the requisite licencing etc up to date.
    If they don't they could find such LL clients costing them an awful lot of fines etc.
    No LA could risk that so they would have to dump LL who won't bother becoming compliant.
    Sort of this is 3 months notice to terminate our contract with you unless you the LL can validate to us that you are fully compliant especially with any local licensing schemes.

    Obviously a big risk as LL might go ahead with the contract termination.
    But for LA would they really wish to have the financial risk of retaining such LL clients?
    I doubt it and suggest that LA will dump those sorts of LL

    But quite frankly why not every LL or property be licensed.
    £100 per property every 5 years.
    Without a National Licence number assigned to that rental property then it can't be let.
    If it is £30000 fine for the owner straight away.
    Problem solved apart from the mass homelessness that would result from LL failing to licence their properties.
    After all it is a lot easier to detect a property being rented which doesn't have a licence compared to checking drivers if they have a valid licence.
    Property DOESN'T tend to move around much!!!
    Very difficult to illegally let property on the major web portals if a licence number is required and the LL DOESN'T have one.
    Even rogue LL need to market their properties though I guess a lot of it is facilitated by word of mouth.
    But the threat of big fines if detected would surely persuade even the rogue LL to get licenced.
    But never going to happen so the rogues will continue competing unfairly with decent and compliant LL.
    There will of course be far fewer of those as they are forced to exit the PRS due to S24 etc; etc.

  • icon

    The whole idea is nonsense and reflects the current trend of making everyone responsible. Except for the person who is.

    LL's must ensure tenants are entitled to be in Britain, else they can be prosecuted. I would suggest that illegal immigration is the sole responsibility of the home office and the illegal immigrant. Yet, here we are.

    LL's must ensure that tenant's are aware of their rights. I would suggest that I am the only person who is responsible for knowing my rights and that the same goes for everyone else. Tenants included. Yet, here we are.

    LA's must ensure LL's are complying with all relevant legislation. I would suggest that, just like any other business person, LL's are responsible for the companies/properties they own and the manner in which they are run. Yet here we are.

    How about we all take responsibility for our own actions and leave it to the police and the courts to sort out those who fail to comply?

    Now wouldn't that be a shocker?



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