Housing Rights briefing on landlord licensing in Northern Ireland

In the wake of the publication of the Department for Communities’ proposals for the private rented sector, it’s a good time to look back to Housing Rights Policy Briefing recommending the introduction of landlord licensing to Northern Ireland.

Housing Rights believes that the introduction of mandatory and statutory landlord licensing could help to ensure that tenants across Northern Ireland are guaranteed a consistent and satisfactory minimum standard of housing. Landlord licensing is already practiced in numerous areas across Great Britain; introducing licensing in Northern Ireland could build upon the existing Landlord Registration Scheme, and require landlords and agents to meet a basic standard of diligence in creating and maintaining tenancies.

Examples of landlord licensing in the UK

Newham Borough Council, England introduced a tiered licensing scheme for all private landlords in 2013. All landlords or agents must be licenced in order to let properties; failure to get a licence can result in a fine of up to £20,000, and Rent Repayment Orders, whereby landlords must repay up to 1 year’s rent to tenants of unlicensed properties.

In 2015, the UK Government passed stringent new conditions for any PRS-wide licensing scheme continuing beyond 2018. This means that councils like Newham will have to apply to the Government to continue their scheme.

Wales has a landlord licensing and registration scheme called Rent Smart Wales. Landlord and agent licensing and registration went live in Wales on 23rd November 2016. Landlords or their agents must complete training and abide by the ‘Code of Practice for Landlords & Agents’, which contains all their relevant legal obligations. Failure to meet the Code of Practice can result in the licence being revoked, meaning the landlord/agent could not let properties.

Scotland operates a registration scheme; however, given landlords must meet certain conditions to be registered, and can be de-registered for failing to meet these, this is practically a licensing scheme.

In Northern Ireland the Houses of Multiple Occupation (HMO) Act 2016 introduced a requirement for landlord or agents of HMOs to be licenced. Applicants must demonstrate that the property is suitable to be a HMO, there are sound management arrangements, and they are a “fit and proper person.” Councils can revoke licences if landlord fail to meet their obligations, and failure to hold a licence is a criminal offence.

Resources for landlord licensing

Evidence from existing schemes across Great Britain indicates that licensing schemes can be introduced with a small and reasonable fee to the landlord. Fees can range from a minimum of £66 for a 3-year registration in Scotland, to £500 for a 5-year licence in Newham Borough.

It is vital that the fees charged are sufficient to fund the relevant authorities to administer the licensing scheme, disseminate guidance and prosecute landlords who do not fulfil their legal obligations.

Principles to inform landlord licensing in Northern Ireland

Housing Rights believes that in order to ensure any scheme is effective, the following licensing conditions should apply:

1. The application of a ‘fit and proper person’ test, based on compliance with housing law, landlord/tenant law, and other relevant areas;
2. A requirement for suitable management and financial management arrangements;
3. Licences should be conditional on compliance with all existing and future landlord and tenant law.

Further reading

Read our Policy Briefing on landlord licensing.

Read more about the Department’s proposals on the Private Rented Sector.