Selective Licensing Appeal – 6.11.2025

Although it is not exactly new, Selective Licensing is an issue which has recently, and somewhat unexpectedly, been a topic of discussion in Westminster and on news outlets. The media attention followed reports that the Chancellor had failed to selectively licence a property when it was let to a private tenant. It is an area of law which is not often under the spotlight, but it can have financial, regulatory, and potentially criminal, ramifications for landlords, even those like the Chancellor, who do not intend to break the law and hand over compliance responsibilities to an agent.

In November 2025 we represented a landlord in an appeal at Leicester Crown Court. The landlord had been convicted of 29 offences of failing to licence properties, and in April 2025 they were fined £29,000, plus surcharges and costs totalling £27,000.

The appeal team, of Ian Anderson, Nigel Edwards KC (Crown Chambers / Lamb Building) and Emma Reilly, obtained “not guilty” verdicts for 25 of the 29 charges, and a reduction in the fine to £0. Following the appeal, the landlord was only responsible for costs from the original trial and a £26 surcharge. The remaining four charges were wrapped up in an agreed “basis of plea” which confirmed there was little to no culpability on the part of our client. We expect that following the appeal, our client to be able to renew her selective licenses without issue.

The below example demonstrates that landlords can fight back and assert themselves when they have done their best to comply with Selective Licensing. We will explain a little more about the scheme and our case, below.

What are Selective Licensing Schemes?

Selective Licensing schemes apply in designated areas and require landlords to obtain a licence to let any property in that area. Neighbourhoods selected for the scheme ought to be those which are characterised by low housing demand, poor quality housing stock and higher than average levels of deprivation and crime. The theory behind the approach is that by ensuring landlords meet a “fit and proper” test, and by ensuring their properties are of a reasonable standard, tenants in selected areas are afforded more protection and living standards improve. There are two fees required to register each property and (if approved) the landlord must also comply with the conditions of the licence, or face having it revoked. The average cost of a selective licence is £900, and it is a criminal offence not to have a licence in place for any designated property.

Selective Licensing is not without its critics. In our case, the property was a brand-new development of 40 luxury flats, let mostly to young professionals. Our client owned the building itself, and 35 of the 40 flats (5 having been sold to private owners). The fact that a brand-new luxury apartment complex required a licence raises a point about this scheme not being sufficiently targeted to fulfil its objectives. Further, the requirement for the landlord to pay one fee per apartment (rather than a flat fee for the building) highlights the significant financial outlay for landlords in complying with the scheme. The workload for the landlord in completing and submitting individual applications for 35 apartments within a very short deadline was also significant. In our client’s case, the financial cost for the application fees alone, was £22,500 and that does not consider the time spent, and costs incurred in registering each individual property and obtaining the supporting certificates.

The decision to prosecute

In our case, the landlord had completed 11 of the 35 applications before the deadline to register. However, due to cash flow issues, she was provided with a “bypass code” to allow payment to be deferred for the remaining 29.

Whilst discussions were ongoing regarding the deferred payments, our client was charged with 29 offences of failing to licence the flats and summonsed to the Magistrates Court in October 2024.

During the period prior the original trial, 25 of the 29 flats were granted selective licenses based on “representations” submitted to Charnwood Council by the landlord. Four properties slipped through the net at that stage and were licensed at a later date. The property owner claimed to have submitted representations for all 29 flats and blamed the council’s IT system. The local authority claimed not to have received the four “missing” applications and blamed the landlord.

The original trial

We did not deal with the original trial, but it did not go well for the landlord. She was convicted of all 29 offences (one for each property) and sentenced to a fine of £29,000, plus costs and court surcharges totalling £27,000. This was in addition to paying the selective licensing fees of over £22,500.

The appeal

On appeal we raised a number of issues. Firstly, there was the landlord’s reasonable belief that the bypass code enabled her to formally “submit” the applications for 29 flats without immediately paying the fee. The Housing Act 2004 states that where an application is “submitted”, but not determined, a prosecution should not commence. The local authority’s case was that payment was part of the application process and therefore the offences were made out.

Secondly, the landlord had supplied all of the other documents (gas safety certificates, EPCs and so on) to allow the council to confirm the condition of all of the flats and the landlord’s “fit and proper” status.

Thirdly, the local authority had agreed that payment could be deferred to allow the applications to be processed, and it was clear our client’s intention at all times was to licence all 29 properties.

Fourthly, the landlord had a reasonable excuse for failing to complete applications for the four remaining flats due to IT issues with local authority IT system.

We also raised the failure of the council to follow its own guidelines on when a prosecution would be appropriate according to its Enforcement Policy. Our view was that the decision to prosecute was not proportionate, transparent or targeted and the council had not followed its graduated approach to enforcement, moving immediately to a prosecution without providing sufficient guidance or advice or carrying out a proper investigation.

On the day of the appeal hearing the local authority agreed to reverse the verdict for 25 flats, and to accept a “basis of plea” for the four remaining properties that the failure to license those properties was an oversight, for which neither the landlord nor the council could determine the cause.

Determining the appeal in Court, the Judge agreed to cancel the fine and surcharges, and to enter formal not guilty verdicts for the 25 offences. For the remaining 4 flats, the landlord was conditionally discharged, with no financial penalty. This felt like a fair and equitable outcome.

The basis of plea

A basis of plea is a powerful tool in regulatory or criminal proceedings. It allows the defendant to set out the extent to which they accept the prosecution’s case and clarify the circumstances.

In this case we accepted that the four flats were not licensed. We confirmed that our client had not intended to not license the flats, and that she believed she had completed the four applications and expected they would be processed. We accepted that the applications were not processed, and that this may have been our error, an issue with the local authority IT system, or human error on the council’s behalf.

By negotiating a basis for the plea, we ensured that the culpability level for our client was very low. This should mean, based on what we know about how the housing tribunal deals with appeals, that our client ought to have no issue renewing her selective licenses when they expire.

Conditional discharge

A conditional discharge involves no immediate punishment (financial or otherwise) provided the defendant does not commit any further offences for a defined period, in this case, 12 months.

Thoughts

The selective licensing scheme is attractive to local authorities. In the world of austerity that they are forced to inhabit, the incentives of better housing stock and a steady stream of income from licensing applications are a tantalising proposition. We would expect schemes to continue to be introduced, and enforced, and that investigations and prosecutions will naturally follow.

We wish to extend our thanks to Nigel Edwards KC for his skilled advocacy in negotiating a successful outcome.

If you require any advice on selective licensing, we’re here to help, get in touch with Ian Anderson or Emma Reilly.