Selective Licence required or not?

A Selective Licence is not the same as the licence being referred to in the legislation ie a licence to occupy residential property.

The difference between a tenancy and a licence is largely about the term ‘exclusive possession’ but not necessarily so.

Have a read of this https://www.netlawman.co.uk/ia/lease-or-licence#terminology:-tenancy-or-a-lease

Have a look at this.
https://www.legislation.gov.uk/ukpga/2004/34/part/3

You have not stated WHICH legislation you are referring to, however, it appears to be Section 3A of the Housing Act 2004.

Your question mentions that the occupiers have a “direct licence tenancy agreement with the council”, but I’m a bit unclear as to what exactly you mean by this. – Are you leasing your property to the Council? Or, are you letting your property to the tenants and the rent is being paid via Housing Benefit (e.g. paid via the council’s HB team)?

If you are leasing your property to the council, then my understanding is that you do not need a selective licence.

If you are letting to the tenants, but their rent is being paid via Housing Benefit from the council, then I believe that you would need a selective licence if you are in a selective licensing area.

The tenant has direct licence with the council. The tenant pays the council direly whatever rent they are charged.

I let the property to company that has won a tender with the council to provide them property (via private landlords) for the council to use as temp accommodation (for families in hotels awaiting a move to perm accommodation). I get paid by the company directly a fixed amount regardless if there are tenants or not. The company says they get paid by the council a fixed fee.

I am trying to work out if under Section 3A of the Housing Act 2004 if the council is a provider that is categorised as a, b, or c.

If they are then it seems I am exempt from needing to get a selective licence.

I think you are exempt as the Council is granting the tenancy/licence and they qualify as a social housing provider. You should get paid legal advice if in any doubt.