Understand Property Licensing
For our inaugural episode of the Property Letting Playbook, we had the pleasure of Des Taylor at Landlord Licensing and Defence.
What We Talked About
For our inaugural episode of the Property Letting Playbook, we had the pleasure of Des Taylor, the Casework Director at Landlord Licensing and Defence. In the episode, we talk about why it is important that a landlord understands licencing, the requirements of the local authority or council and how he and his team can help landlords with their property licencing requirements.
Des and the LL&D team are extremely knowledgeable in this field and encourage all landlords to get in touch when letting out a new property. They will help you stay compliant and avoid fines and even jail time! You can get in touch with the Landlord Licencing & Defence team by heading to the link below
What You Will Learn
- When to look for help with licensing
- The importance of understanding your local authority
- Tips and tricks to help you stay compliant and what to look out for
- The importance of understanding property licensing
Watch The Episode 1 - Landlord Licensing & Defence
Transcript - Episode 1 Landlord Licensing & Defence
Andy: Okay, so welcome to the podcast. We've got those Taylor with us today, from the landlord licensing and defence. Nice to be with you. Thanks for joining us today.
Des: Thank you very much.
Andy: I'm Andy, I'm the head of marketing at Oasis living and we've got, Sam Ghosh who's the founder. We're just gonna chat to you today about what it is you do, why it's relevant and you know, any interesting. anecdotes that you might want to bring up.
So you just want to introduce yourself and tell us, tell us about what you do.
Des: Right. I'm the casework director to landlord licensing and defence. And my job involves working with landlords and letting agents, um, not only when they get into trouble and need defending, but when it comes to understanding the housing act and the law of letting property. That's not landlord and tenant law where, um, uh, sort of things like tenancy agreements, evictions, that sort of thing.
But we know lots about that. It's more about making sure the house is compliant under the housing act for, um, you might've heard of homes, fitness for human habitation. Um, and that's under that tab. That's essentially part one of the housing act 2004, which is the housing health and safety rating system. And then of course, they're all things that if you want to let, to share with us, what does that mean?
And when does the law kick in, and then there's also the situations that you have where, um, you might need to license the property because it's in an area that the councils decide. We want these to be licensed.
Andy: Okay. So when would someone come to you typically. you listed a few things there, when would someone need to get in contact with you in the process of that, of letting or licensing a property?
Des: So sadly, most people come to us when it's too late, they've received the letter from the council. Um, but they've either got an improvement notice because they visited the property. They want to post some financial penalties, civil penalties, um, or the tenants have asked for rent payments or whatever. The property wasn't licensed.
When should the landlord come to us? Well, that is another matter. A landlord should come to us, um, at the beginning of the process, when they, when they need to understand what licensing is, because I must say local authorities don't explain it particularly well.
Sam: them. Is it because of specific things that came out or things faults you see in our current, uh, microstructure in the real estate market, it would be good to have a bit of a background?
Des: There's many, many reasons why we started this business. But the main reason is there was a demand because I was continually being asked by people for help people asking me because they were getting into trouble and that background.
and how I knew what to do, um, is down to me. I must say, I'd love to say I'm clever.
I'm the most well-trained I'm the best person in the world. Um, what it really relies on is, um, my sister and my sister has been a corporate of property lawyer until she left this one, like a couple of years back. And she worked for a firm of solicitors in London. Um, her clients were all well to do, um, people that's probably best way to put it and they were dealing with all sorts of issues, um, regarding property.
And so she'd been dealing with those; for corporations, individuals of directors, and I used to help them unless she was an excellent secretary. Excellent at typing. I used to help her with corporate presentations to these organizations. And I began to take an interest in that as I was a landlord. And of course she was my solicitor.
And the more I helped her with the side of the business that she didn't do cause I was working corporate sales. Um, the more I began to learn about things and people came to me. I in turn, went to my sister and when I started this business, um, I started the business mainly my sister became ill and we knew that she wouldn't be able to continue to work.
And there weren't many people who could do this work as well. So that's when we realized over those years, we needed to understand it because most solicitors don't, most people who have in this business are ex council and they have the counsel's prostitution, mental attitude while the defense attitude.
So thank you to my sister. This business was formed.
Andy: wow, cool,
Okay. So do you act as in like in place of a lawyer or would they, would you recommend that someone has a lawyer as well, and you're just sort of filling in the gaps, like you say, not a lot, um, solicitors, will understand or, would you act as, as a representative, for whoever you're working with.
Des: Yeah, I would say it's very much, um, like you don't need a lawyer for the area of law we deal with, um, because, uh, they can have a representative like we are. And what we do is operational application of the law, not the law itself. Now that made somebody probably go, well, what does he mean? Operational application.
Think of a student who leaves university. Let's say in something like civil engineering. So you've done a civil engineering degree. You come out of university, but you've never been on a building site. You're really of no use to anyone? Well, that's probably what most lawyers in most towns are like to landlords when they get the types of offenses for the council in this area.
Whereas someone who's been on sandwich course been in placement with a construction firm. I think my older brother who's also in construction and, um, in his university years he built a sea wall at a seaside town with lots of young people. You can imagine that was hard work. Um, he worked on projects. He worked on projects and railways and boats and things like that.
So when it came to leaving university and getting a job, everybody wanted him because he had experience. And what we've found was because of our practical experience as landlords having built HMO portflios having built portfolios by to lets, we understood something that theorist the lawyer did not. Is what the landlord was going through and how to deal with it and how to solve it.
Andy: So you understand that from yeah. From both sides practically. So you've got the knowledge of the law and the process to be able to get the knowledge from the other side as being a landlord, yourself with a good portfolio. And, yeah. Okay. I understand that, but that's really good. Cool. Um, yeah, I mean, so what, what would be, if you had to sort of go through anything in specific of just getting a bit, a little bit more detailed now?
Things go wrong the most. So what, violations happen? What, problems can learn those run into regularly when they have to deal with the council or deal with, um, any property law in the space that you're in, like, what is what's common?
Des: So the number one thing that we see as a problem. is, individual landlords do not, um, do not follow the process of getting a tenancy right, in the first place. So that would include, they don't follow the prescribed information, so they don't get the right to rent the document. They don't do the immigration checks.
They don't secure the deposit and the most common, or they don't issue the gas safeties. certificate before issuing the tenancy, those things happen all the time. Those things they are run of the mill. Most lawyers could deal with that, but we get a lot of calls about things like that. We deal with those. for people, but it's normally dealing with them when somebody is trying to, to leave the you're trying to serve notice and they haven't done that part properly.
Those are the most common, um, are they what we deal with? The most of know, what we deal the most of our, where tenants are applying for a rent repayment order, where the landlord should have licensed the property as a house in multiple occupation or in a selective licensing area, which is general buy to let and they haven't licensed the property. The reason we get so many is the council comes to check the property, to see how it's occupied. And when they come to see how it's occupied, they find that it's not licensed and they tell the tenants. You should go get a rent repayment order and they encourage them and some councils actually help them.
So that's probably, by far more, more cases, we get than anything else? I think we've done 44 defences this year already, as you can imagine. So much more than one a week. And most of them, we settle without going to tribunal. The second area, where we get the most amount of issues is where landlord has received the notice from the council about not having a license and they're going to issue them a civil penalty.
And up until about a year ago, those were between five and twelve thousand. Currently all the ones that we've got from not having a license with within, with between and 30,000. So we've got two at the moment, £30,000 first time offense, um, because they believe they are, um, very experienced landlords and agents and they've decided they can tackle them at the top with the highest fine the can.
Andy: Okay. Um, okay. Yeah. So just, just to walk me through, because I, you know, I'm still learning a lot about HMO licensing but for someone that's getting new to the property ladder like myself, for instance how do I know? Do I need to go to the council to, to find out if my property needs to be like licensed or is, does it depend on what, how I decide to let it.?
Uh, or the area, I mean, like, just from, from very like in the beginning level, can you walk me through that?
Des: Yeah. So, um, like, you decided to drive, you know, you need to get a license, drive a car, get provisional license, et cetera. If you want to measure to properly. Very very simple properties controlled by each local authority. And that being be the place where the council tax is paid to. That's how you define where your local authorities.
So first of all, look that up on the government website for the address look where your council tax is paid to and be apt to be sure it's valid. So there's a street in Leytonstone in east London and until 1974, it was under. Um, London nerves since 1974, it's been unbelievable, still landlords in that? mode, still an auction or who their local authority is.
You think they don't cause a band council tax to them, but when they make a license application, you make it to the wall authority and you don't get any response for three years, it's not valid application. So, um, so the first part was to make sure you get, the second part is look on their website about licensing, just put into Google.
Westminster city council, the licensing, and see what it says about additional licensing, mandatory licensing and selected licensing. Now additional licensing is not in addition to an HMO license. It's generally. When you have a property that is needs a license, because it has less than five people sharing of which two are not related.
So check it out. Definitely in London and all buyers, there are 348 different local authorities issuing licenses. So find out whether you need licensing. And the other thing that's really important is if you're going to let to shares is there is not to do that except under something called the general permitted development or.
And if the local authority has been moved that way under something called article four of directions, that you may not be able to do a house to sharers because they don't permit the making of new HMO properties. That's different to licensing that's planning. So you've got to check the planning licensing and then you've got to check all the relevant things for the official information.
I must admit, if you look on Google, you're going to find a lot of information. But do not rely on Facebook or Facebook groups or people's opinions, the opinions you've got to rely on other government who gives you facts, which you can rely upon the local authorities website, for which I would advise you take screen prints of anything you're going to rely upon later on. And, um, also look at the tenant websites like shelter and citizens advice bureau as a landlord, you want to see what your competition or the other side is doing and what.
Um, so let me check out, cause they're certainly telling the tenant of what you should be doing. So why don't you just learn from them hard.
Sam: That's very comprehensive. That's great. Thank you.
Um, so I mean, obviously you're giving us advice here, which is perfect. And, uh, but, but, but of course you're here to, you know, because if, if a landlords can find the thing that they want or that they're struggling with with a Council and they, they don't know what to do that they need to come to you guys.
Um, so, um, it's good that there is a place, this makes it easy for them because you know what you just explained to me that. It's already, but I've only touched the surface and there's already it's quite a complicated thing. And I, I guess there's a few landlords out there that may think that they can jump into, you know, and it's quite easy to set up.
Maybe they, maybe they buying their second property or, and they think that it's easy to set up, but there's obviously a lot to go through and a lot to consider before, you know, to, to avoid getting in trouble with your, with your local authority or anything. Yeah.
Des: Yeah. That's very true. And many of the cases we see are where landlords are, um, in trouble because they've let the house they used to live in. They don't understand the law they moved on and what was second house thought we'll make some money, and rent the house we used to live in there, another one that's very, very common is when the landlord has decided to take the property and its management back from a management agent.
Because they think the management agent is costing them too much money, or they'd like to make more money themselves. And most cases are, they don't understand management regulations for HMO's.
And the other is that they don't understand what the managing agent is actually doing. And so they're getting into trouble when the council comes around because the tenants are now not reporting things. They're moaning. Then reading citizens advice bureau and shelter websites saying, get money from your landlord, for not doing repairs. So they think, oh, hold on maybe I'll get some money from a landlord. I won't report that. Then I'll call the council and then maybe they'll be clever enough to support me and believe you me the councils aren't stupid. But some of them really don't try hard enough to defend the landlord.
Andy: And I've seen, um, on, on a lot, you mentioned Facebook groups, um, obviously involved in quite a lot of them and chat to quite a few landlords on there. Yeah. And I problem, I see a rise up quite a lot is to do with this confusion sometimes around, especially with HMO's and, and other, uh, buy-to-lets about safety and fire, fire risk. I saw some comments recently on a, on a group, uh, where the fire doors were regulatory throughout the property or not. And do you have any advice for that?
Des: Fire risk assessment is the only way. Get a final assessment because the person on Facebook, um, one hasn't been to the property. Two, they haven't evaluated it. They're basing it upon partial information. It's like asking a doctor to define what's wrong with you and say you've got COVID-19 cause I went achoo. Doesn't mean I've got COVID 19 it means I might have had a bit of dust in my nose, but that's the sort of advice that people are giving. Seriously finest assessment, um, is for all the money that it costs to be right and up to date, the regulations are changing all the time. They've changed during this year. I think the lead times.
And if you're renting out sleeping accommodation to anybody on a permanent, temporary, or any type of basis, get a fire risk assessment. Why wouldn't you? It's enough to say you understand what type of alarm and what you should have done because fire the fire brigade now is really prosecuting landlords and doing a lot more of it.
And there's a landlord in Derbyshire. I think it was, um, he has a two year suspended sentence, nine months suspended for two years sentence because the fire doors were not closing properly in a HMO and the alarms were not being serviced as they should be.
So seriously, please don't think, you know, if you're not a fireman who knows the law, you're not a Fire Risk Assessor who knows the law and get a fire risk assessment done, because I hate to say this when someone dies, that document will be your defense.
Andy: Exactly. And I think, yeah, so the, the big messages is, is not to cut corners and, uh, and really do your due diligence. And it's good that they, you know, landlords have somewhere that they can go. Cause you've just talked to, you know, 20 minutes extensively about this you're, you're incredibly knowledgeable on the subject and or the subjects.
Um, And it's good that, you know, they have the options of, they can do the research themselves, but if they don't want to do that and they do want to start a new property business and start building that portfolio, they have someone to go to offer, you know, to hand over that, that kind of part of the work and get the advice they need, um, quickly and efficiently, um, to make a success out of that property.
Well, as an agent, an agent does manage properties much better than most landlords. Because it's about the frequency and the repetition. They're doing it over and over every single day. And you know, my son loves the film Komatsu kid, and it is wax on wax off paint the wall, paint the wall up and down, paint the paint, the paint, the fence fences left and right.
You know, you eventually know when something comes, how to move and what to do. Um, and that comes to agents who get trained, like follow the, the association of residential Letting agent courses and like get the professional level so that anybody in negotiations should today be at least a level three, the management should be at level four and the regulation of property agents coming in, but it was supposed to come in already, but, um, various things to delay that when that comes in, all of this will become controls and landlords will have to fight very, very hard.
To, to compete with good agents out there. And I'm not saying there aren't bad agents, like they're aren't bad landlords, please they're are. Please. Everybody's got the story, but remember that's the curve. There's always going to be people at each end of the curve that are the exceptions, we're talking in general.
Um, the bigger agents have less to lose than the smaller agents. The agent where the owners of that agency are actively involved. There is no getting through. Um, I'm a director of company to big corporation type stuff. They treat the corporation, the directors is the same. So if you're going to be putting your business with somebody who's highly experienced, um, find somebody that's maybe got 8, 9, 10 branches as a max.
But they can still handle that actively involved with the day-to-day operations and training of the staff. Whereas he can have really big guys with that branch in every single high street and they got systems and processes, but they're outsourcing everything. You're not sure it's being done. They can't get in the door.
They don't, they don't make a second appointment to come back. It's all about profit margins and numbers for them. rather than reputation locally and staying in business and attracting more customers and more landlords. Um, my advice, if my advice, if your landlords stop skimping on the agent, and if you want to play 6% plus VAT for an agent, you're likely to have bad tenants, you're likely to have fines.
Yeah. Those are not the numbers. People should be paying for proper full management
Andy: Yeah. And that's, you know, that leads, leads nicely into what we do and cause we're, we're trying to make a service or we have a service that is, um, that is more efficient for landlords and allows them to, um, you know, go through all this. And we're not, we're not a huge, multifaceted corporation like Foxtons where, where you are going to get ignored.
So, you know, we, we do exist in that, in that small, small enough to care. Um, category of online agent. So, um, yeah, just to, just to plug us a little bit as well, and I'm sure Sam may have more to say on that or.
Sam: Yeah, but yeah, but before that, I also wanted to talk about, as a personal question for me about the insurance aspect I mean, apart from, I think the fire safety assessment it's it's, it's a kind of insurance where you get all of these done. Are there specific insurance that landlords should always have?
I mean, I know a couple, uh, but you know, if, you know, if you can shed some more light on that would also be good as well.
Des: Every landlord should have insurance. Every landlord. And there are a number of insurances you can buy. Some are better than others for the best, despite the specialist, landlords insurance, broker because they deal with investors. As much as you see Direct Line landlords insurance, et cetera, they don't fit their business around you. You fit your business into their cover.
So find a book and it'll get you underwritten your requirements, especially if you have more than one property, um, you must have Public Liability Insurance. Number one, because people are gonna be coming onto your premises and you're not living there.
And you need Public Liability Insurance to protect yourself. Secondly, even the Professional Indemnity Insurance, because there's not a landlord with you are going to be making decisions as a professional. Same as the letting agent does, you're going to be making decisions for which you need to be held accountable.
And if you're held accountable, you get that long; same as the doctor can get it wrong. They have Professional Indemnity Insurance to cover the cost of fixing in that situation. Now the landlord last year, um, bought a property with tenants in it. The tenants, um, were not inspected by the agency that took over, a bad agency. Um, couldn't get access. Didn't go back. Um, there was an explosion of the flats.
But they had insurance. The fines alone are over half a million pounds. Yeah. the fines alone. That's without the fire brigade prosecution, that's coming, maybe the suspended jail sentence for both the agent And, the landlord and the previous landlord who just sold it to them. Because of things not being right you are going to make mistakes, you are going to get things wrong. Yeah. I don't know anybody who's driven a car not move, moved it three feet it, who hasn't had a clip of a wheel on a curb. At some stage touch than other car when parking scraped along something, when they, when they were a little bit tired, um, pulling out of a car park, most of them are under five miles an hour.
You have insurance for those things, something you'll fix this. You don't need to pay when the insurance they're minor, but for landlords, every landlord has a massive risk today. And eventually the insurance company will start underwriting. Well, when you make mistakes, when you get fines for rent repayment orders, but at the moment, they just see you as a criminal and those things are going to come along and they don't cover those unless you go into a courtroom.
And so, yeah, you've got to have insurance. You've got to be looking for insurance to cover all of those. You must have Employers Liability Insurance. You've got window cleaner coming to your property to clean the windows drawn on behalf of you or because the tenants are in the house. You need to have Employers Liability Issues.
They may not be your direct employee. They may be a contractor, but where that certainly does is make sure that you're covered, but any damage they cause or any injury they do
Sam: And, uh, in terms of getting the insurance, your advice was to go for specific,
Des: Specific brokers.
instead of going to the hiscox.co.uk, et cetera, much of the general mass market and you just plug something of the shelf.
Des: Yeah, they may, they may well undermine you with his Gox, but they would've told his cops exactly what the business is about, but they may underwrite you with Tokyo Marine depending on what you're doing. So, um, as a, in, in the business of letting agents, Tokyo Marine is pretty good at what does.
know, but then there's that's insurance then in Bristol is also very good, um, for some letting agents.
So you should go to a broker there are two brokers in this country, that I recommend, one is Insurance Desk in Aylesbury.
Um, and the other one is Falcon Insurance in Birmingham. Um, they're the only two companies. That I fully recommend understand what business you're in, whether you are letting agents and landlords are a MESNE landlord. That's spelled M E S N E. When I say me landlord, that's generally in the business of rent to rent, and that could be meant to meant for houses in multiple occupation it could be rent to rent for holiday lets. It could be rent to rent for serviced accomodation. They understand it and make sure you're insured in the event of anything
Sam: That's good. It's very useful information for me as, as, as valid for our users.
Andy: Yeah. Um, okay. Um, I mean, I think that's, that's, uh, that's pretty much all we've got time for. Um, but I just wanted to spend a bit, uh, just at the end, like if people want to get in touch with you, where do they, where do they need to go as best to contact you? And we'll make sure that we've got it in the description below and et cetera
Des: On the back there it's landlordsdefence.co.uk. And then you can select, if you want to book a quick check call or consultancy and stroke book, but there's lots of information there about when they want to license, how you need the license. Do I need a license, all about fines, all about the fines that get done for landlords and lots of, lots of information on the blog there.
If you you're uncertain. Um, but the telephone number there as you see is, 0 2 8 0 8 8 0 7 8 8. And come through to us, we will take your call. We will go through whatever your issue is. Um, be prepared to spend a few minutes on the phone, because like I said, if you want information and you're only going to give two pieces of information, when we need that 30 piece of information to make decisions, then Facebook is great for you. cause nobody you're not gonna take, any advice. But if you want real help, then come to us with the full information. It's completely confidential. We're not the council. We're not anybody who's going to catch you. from us and for letting agents like the waste as well.
Andy: Thanks very much. We'll see you next time