High Court backs licensing scheme for private landlords

Landlords face tough licensing rules

Updated: 

Housing Stock

A decision to subject private landlords in one of London's largest boroughs to measures aimed at dealing with anti-social behaviour problems and criminal activity has been upheld by the High Court.

A judge rejected accusations that local developers and landlords were not properly consulted before Croydon Council decided to designate the entire borough for a "selective licensing scheme" for landlords.

Sir Stephen Silber declared: "I am quite satisfied that the council complied with its duty to take reasonable steps to consult with local people to be affected by the designation, including developers and landlords."

The judge rejected an application for judicial review brought by Croydon Property Forum, a not for profit company made up of landlords.

The power to introduce licensing schemes for private landlords was given by Parliament to local authorities under provisions of the 2004 Housing Act.

The Croydon scheme is due to start on October 1 and will see landlords charged a £750 fee per property for every five-year period.

The council took action because there had been "a significant and persistent problem with crime and anti-social behaviour in the borough", said the judge.

The council was concerned the problem was linked to "the management of private rented housing as some, or all, private landlords were failing to take appropriate actions to help combat the problem".

The licensing scheme was being introduced against the background of a great need for more housing in Croydon.

The council estimated that an additional 27,000 homes, including those available for private letting were needed by 2031. Private sector developers were intended to be an important partner in the process.

The judge said some local landlords "believe such designation will reduce the value of their properties" as it stigmatised an area and would lead to higher costs in the form of licensing fees and increased borrowing costs.

But the judge ruled the consultation process was lawful and the council had properly exercised "a comparatively wide discretion" as to how it was conducted.

Any private landlord caught renting out a property without a licence from October could face thousands of pounds in fines, while anyone breaking licence conditions can be prosecuted and fined up to £5,000.

The High Court ruling was welcomed by Councillor Alison Butler, Croydon Council's deputy leader and cabinet member for homes, regeneration and planning.

She said: "This scheme is important because raising housing standards and tackling anti-social behaviour is crucial to making Croydon a better place to live.

"We'll continue to prepare for the licence's launch on October 1, and urge any landlords who haven't yet taken advantage of our early bird discount fee to join the thousands who have."

Ms Butler said most landlords applying from October will pay a one-off £750, but warned that those failing to meet their licence conditions may have to pay £750 each year. All applicants must prove they are fit and proper.

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