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Selective licensing and conditions

Checklist 2 146x219Jonathan Manning analyses an important Court of Appeal ruling on selective licensing and the power of local authorities to impose conditions.

In Brown v Hyndburn BC [2018] EWCA Civ 242 (Underhill and King LJJ, and Hildyard J the Court of Appeal has given guidance as to the extent of local authority powers in relation to the licence conditions that may be included within licences of houses in areas of selective licensing (Pt 3, Housing Act, 2004).

The Court held that the power to regulate the “management, occupation or use” of a house does not entitle an authority to impose conditions requiring the introduction of new facilities or equipment.

Selective Licensing

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Part 3, Housing Act 2004 permits local authorities to designate their areas, or parts of them, as areas of selective licensing if they are satisfied that certain criteria are met. They include that the area of the proposed designation is either an area of low housing demand or one which is experiencing a significant and persistent problem with anti-social behaviour that is not being addressed effectively by at least some private landlords.

In an area of selective licensing, private houses let as separate dwellings must be licensed. By s.90(1), the authority may include in a licence “…such conditions as [they] consider appropriate for regulating the management, use or occupation of the house concerned”. Section 90(2) permits, in particular, conditions relating to the use or occupation of particular parts of the house, or requiring steps to be taken to deal with anti-social behaviour.

By s.90(3), a licence may “also” include conditions requiring facilities and equipment to be made available in the house to meet standards prescribed by the appropriate national authority. No such standards have yet been prescribed. Conditions specified in Sch.4, 2004 Act must also be included (s.90(4)).

Section 90(5)(a) provides that, as regards the relationship between the authority’s power to impose licence conditions and their Pt 1, 2004 Act functions (Housing Health and Safety Rating System), the authority must proceed on the basis that, in general, they should seek to identify, remove or reduce “hazards” in the house by means of Pt 1 functions and not by means of licence conditions.

Facts

The appellant was a private landlord who owned and managed properties in parts of the respondent authority’s area designated for selective licensing. He applied for and was granted licences for his properties which included licence conditions that were common to all of the authority’s licences.

The conditions the subject of the appeal were as follows.

“6.       If gas is supplied to the property a suitable carbon monoxide detector must be provided, maintained in good working order and tenants made aware as to its operation”

“8.       The licence holder must ensure, throughout the period of the licence that the premises are covered by a Valid Electrical Installation Condition Report (EICR), where the report states the installation is unsatisfactory this must be remedied within 38 days and the licensing team notified upon completion of such works. If a report recommends a re-test during the term of the license, an up to date report must be provided to the landlord licensing team within 7 days of the re-test date.”

The appellant’s properties already complied with these conditions, but given the wide implications for landlords of licence conditions requiring new facilities or equipment, he appealed against them to the First-tier Tribunal.

The Ft-T allowed his appeal. It deleted Condition 8 altogether and modified Condition 6 to read:

“[i]f a carbon monoxide detector is provided in the property, the licence holder must produce to the tenant (and the council on request) written confirmation as to which party, landlord or tenant, is responsible for maintaining the detector in good working order, including testing and replacing any batteries, and tenants made aware as to its operation”.

The authority appealed to the Upper Tribunal, which allowed their appeal, and reinstated both conditions in their original form. The appellant appealed to the Court of Appeal.

Court of Appeal

Allowing the appeal, and analysing Pts 1, 2 and 3 of the 2004 Act, the court held that Parliament had drawn a distinction between licence conditions relating to the management, occupation and use of a property and those relating to its condition and contents. Thus, in relation to HMO licensing (Pt 2), s.67(1) conferred power to impose licence conditions regulating both, whereas, by contrast, s.90 conferred power only to regulate the former.

It must be assumed that the difference was intentional; a comparison of the other provisions of ss.67 and 90 supported that assumption. Moreover, while s.90(3) and (4) permitted conditions relating to new facilities and equipment where the national authority had prescribed standards to be met (which was not the case) or where conditions were mandatory under Sch.4, those were additional powers not aspects of the general power conferred by s.90(1).

Section 90(5) appeared to be premised on the authority having power under s.90 to remove or reduce category 1 or category 2 hazards, but that premise must relate to the additional powers under s.90(3), (4), and did not connote that s.90(1) conferred such power. Section 90(5) itself confers no power at all. It addresses the relationship between Pt 1 and Pt 3 powers but is not itself the source of any power or “residual discretion” as contended by the authority.

It was also relevant to the construction of s.90 that the statutory purpose of designation was to ameliorate problems of low housing demand and/or anti-social behaviour, to which these conditions were not directed. The judge below had been wrong to hold that purpose to be immaterial. It went too far, and was contrary to the principles of public law, to say that the statutory purpose of licensing does not cut down the ambit of the power to impose conditions.

Jonathan Manning of Arden Chambers appeared for the appellant landlord. He can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..

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