Demonstrating the cost of Landlord Licences?

Demonstrating the cost of Landlord Licences?

9:46 AM, 7th February 2022, About 2 years ago 24

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My understanding is that the cost of the Licences that Councils are issuing, (HMO’s, Selective Licenses etc) are supposed to be based on the cost of operating them.

I have not seen any Council offer any cost breakdowns.

Does anyone know if they are required to do so?

Are Councils also required to show who has and has not paid their Licences?

Many thanks


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David Judd

11:43 AM, 7th February 2022, About 2 years ago

Ive not heard that the cost is based on the cost of operating them. All councils have a HMO register, go online to your council and look

Luke P

12:03 PM, 7th February 2022, About 2 years ago

Reply to the comment left by David Judd at 07/02/2022 - 11:43I think it's the income is not to be spent on enforcement, or maybe it's it can *only* be spent on enforcement. Either way, there are some loose (and not adhered to as far as I can see) 'rules' of some kind around the fees. Sorry that's of not much help.

Ian Narbeth

14:54 PM, 7th February 2022, About 2 years ago

From Camden Council's website:
HMO licensing fees for new applications and renewals, discounts and refunds (Effective date 8 December 2020)
Section 63 of the Housing Act 2004 permits the Council to charge a licence fee to cover all costs incurred in carrying out its functions under Part 2 of the Act. In developing its fee structure the Council has had regard to Article 13(2) of the EU Services Directive (2006/123/EC). The Directive requires that the licence fee paid by the applicant must be reasonable and proportionate to the cost of the authorisation (licensing) procedure and shall not exceed the cost of the authorisation (licensing) procedure. The Directive makes it clear that licence fees can only be used to recover costs and cannot be used to make a profit.

Reluctant Landlord

17:23 PM, 7th February 2022, About 2 years ago

Reply to the comment left by Ian Narbeth at 07/02/2022 - following on form that the Council must be able to show how an amount was set and determined as a direct result of that exact process?
Are they also duty bound to ensure this process detail/ info is in then public domain?
As a result of charging the licence fee to carry out 'its functions under Part 2..' is a refund available to the payer if the Council does not actually carry out the exact functions at the licenced property for which the fee is paid during the period the fee is applicable?
I fear licencing is going to be the nightmare of 2022 among other things...

Ian Narbeth

17:28 PM, 7th February 2022, About 2 years ago

DSR, I am not a specialist in public law or local authorities but I expect they can set a price that means in aggregate they cover the costs. The fact that processing a licence for one landlord may be less time-consuming and costly than for another will not be relevant. It would be an administrative nightmare to charge a "taxi fare" for each application depending on how many hours of work it took to process.

An FOI request to the Council might be a useful way of finding out if they are just covering costs.

Mike W

18:19 PM, 7th February 2022, About 2 years ago

Hi Stewart,
Ian is completely correct. I am in Scotland and a few years ago I, and another landlord made a series of FOI requests which ultimately led us into making a formal complaint because the council was not following the rules. Indeed we discovered that in the budget they were proposing to double the charges in order to generate funds for general expenditure. We went through the full 3 stage complaints procedure, the last stage of which was from the council ceo. The council were adamant that they could charge what they liked. We took the case to the local council ombudsman who sided with the council. Incidentally we had also made FOIs to every council in Scotland and only 2 held this position - mine and Glasgow. So I then complained to the Government local council auditor who was doing an audit on the council at the time. The auditor agreed with us but let the council 'balance out the account' over a 3 year period. In my opinion this was done because to make the adjustment immediately would have required the nightmare (for the council) to have to repay the overcharging of fees for the previous 2 years.
There is also the issue of whether licence payers should pay for enforcement. I contend that the licence payer should only pay for the cost of licencing and not pay for any enforcement cost. We currently have a two element fee: the first part is for initial inspection and the second part is for annual monitoring cost for next 2 years. If you don't get a licence then the element for the next few years is refunded.

So no profit from undertaking licencing.
Hope that helps.

Martin Thomas

9:51 AM, 8th February 2022, About 2 years ago

Reply to the comment left by Ian Narbeth at 07/02/2022 - 14:54
Hello Ian. In your view, does the requirement for the Council to only spend the licence fees it raises on licensing work apply to mandatory as well as additional or selective licensing? I was aware that if there is an additional licensing scheme that applied but was not sure about the other categories.


16:33 PM, 8th February 2022, About 2 years ago

I suspect that many Councils interpret the rules to mean covering the cost of the whole department, not just the specific licensing operation. Selective Licensing, for example is generally light touch in administrative terms and often doesn't involve any inspection, but I suspect they use the fees from it for other departmental work.

Ian Narbeth

17:06 PM, 8th February 2022, About 2 years ago

Reply to the comment left by David at 08/02/2022 - 16:33
Hi David
That is not how it is supposed to work. This Court of Appeal case is instructive:

Mick Roberts

8:52 AM, 10th February 2022, About 2 years ago

They make it up as they go along.
Here in Nottingham, a Selective Licence Rip off homeless inducing Benefit tenant penalising tax is £890. Neighbouring Ashfield is/was £250.

Anyway, more importantly Oooh Baby, look at Nottingham's Conditions.

And tell me if you'd ever take a Benefit tenant again after reading them. Licensing is making me wealthy with none of my Benefit tenants being able to move any more cause of these conditions-No other Landlord will take them. So I have no voids any more to do big refurbs & a constant income forever which I don't want.

And I'm only charging 60-80% of market rent on a lot of houses, so don't slate me down for making money when I'm already looking after me tenants with cheaper rents.

Selective Licensing should not be really hurting tenants & making Landlords wealthy. That is Selective Licensing consequences.

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