Fit and proper person policy for property licensing

Summary 

This policy sets out how the council assesses whether a person is suitable to hold a property licence or manage a licensed property under the Housing Act 2004.

Purpose

  • The policy applies to all applications for either a house in multiple occupation (HMO) or a selective licence under Parts 2 and 3 of the Housing Act 2004.
  • The council must be satisfied that both the licence holder and property manager are "fit and proper persons".
  • If they are not considered fit and proper, the licence application will be refused unless alternative satisfactory management arrangements can be made.
  • The aim is to ensure that those responsible for managing licensed properties have competence, suitable management structures, and funding arrangements in place to protect residents' welfare and safety and to meet the conditions of any licence issued. 

Who the policy applies to

  • Licence holders.
  • Property managers.
  • Other persons significantly involved in property management.
  • Licence holders and managers must ensure their staff and their associates connected with property management are suitable.
  • Staff with limited involvement are generally excluded.

Banning orders

  • Anyone subject to a banning order under section 16 of the Housing and Planning Act 2016 will fail to meet the fit and proper person test.

Associated persons

  • The council can consider the conduct of people associated with, or formerly associated with, the proposed licence holder or property manager for a property licence on a work, personal, or other basis. 
  • This prevents unsuitable individuals who would not meet the fit and proper person test using others as a "front" to hold licences or manage licensed properties. This is to ensure that a person's ability to satisfactorily manage a property is not influenced by an associate who would not be considered fit and proper.
  • Evidence of misconduct by an associate such as convictions, offences or breaches will only be relevant where it impacts the proposed licence holder’s or property manager’s ability to effectively manage the property or meet the conditions of any licence issued.

Factors considered in assessing fitness

The council must consider whether a person has:

  • Committed offences involving: 
    • Fraud or dishonesty.
    • Violence.
    • Drugs.
    • Any offence listed in Schedule 3 of the Sexual Offences Act 2003.
  • Practised unlawful discrimination on grounds of sex, colour, race, ethnic origin, nationality, disability, in, or in connection with, the carrying on of any business.
  • The council may also consider relevant findings of unlawful discrimination under the Equality Act 2010, in or in connection with, the carrying on of any business.
  • Contravened any housing law or landlord and tenant legislation.
  • Acted otherwise than in accordance with a code of practice approved under section 233 of the Housing Act 2004 (HMOs only).

The council may also consider:

  • Poor property management practices or poor conduct in relation to tenancy management.
  • Previous licence refusals or revocations.
  • Previous management orders.
  • Other relevant circumstances specific to the case.

A person living overseas, or companies registered overseas, outside UK legal jurisdiction will not normally be considered fit and proper to be a licence holder or manager.

Requests for further information

The council may request additional information, including a Basic Disclosure (criminal record check), where concerns exist, for example:

  • History of complaints.
  • False or misleading information provided.
  • Lack of management experience.
  • Suspicion of relevant offences.
  • Housing vulnerable occupants.

How decisions are made

Each case is considered on its own merits.

The council will consider:

  • Relevance of the wrongdoing to property management including the type of property.
  • Seriousness of the conduct and the impact on residents and the wider community, including any vulnerable occupiers.
  • How long ago the wrongdoing occurred.
  • Any mitigating circumstances.
  • Any other relevant factors.

Conduct likely to lead to a finding of not fit and proper

Including:

  • Unlawful evictions and harassment including the threat or use of harassment, intimidation, or force, or where damage caused to the victim’s belongings.
  • Fraud, theft, burglary, deception, and modern slavery offences.
  • Violent offences, including murder, manslaughter (including corporate manslaughter and gross negligence manslaughter), arson, assault and robbery, possession of offensive weapon or firearm.
  • Current conviction under Schedule 3 of the Sexual Offences Act 2003.

Conduct for consideration of not fit and proper

Examples include:

  • Breaches of housing and landlord legislation.
  • Failure to comply with enforcement action resulting in an enforcement notice, a financial penalty and/or prosecution.
  • Drug-related offences.
  • Unlawful discrimination.
  • Patterns of repeated misconduct.

The council will assess the seriousness, frequency, the harm caused and evidence of improved behaviour.

Review and revocation

  • A licence can be revoked if the licence holder or manager is no longer considered fit and proper under section 70 (for HMO’s) and section 93 (for selective licensing) of the Housing Act 2004.
  • A licence must be revoked if a banning order is imposed.
  • The tests for determining whether a person is no longer fit and proper are the same as those that that apply when first considering their fitness and propriety for an application for a licence.

Duration of a negative finding

  • A finding that someone is not fit and proper will normally remain effective for 5 years.
  • Future applicants must provide evidence showing why the person proposed to be a licence holder or property manager should now be considered fit and proper.

Satisfactory management arrangements

The council must also be satisfied that management arrangements are suitable, including:

  • The competency of those involved in the management of a property. The level of competence will depend on the complexity of the management challenges posed in managing the HMO or single occupancy house. This will involve a review of the property manager’s experience and track record of managing residential property.
  • Appropriate management structures are in place to enable the manager to comply with any licence conditions, deal with the day-to-day operational management issues and longer-term management issues at the licensable property.
  • There are sufficient financial resources or there is access to sufficient funding to enable the obligations under the licence to be met and for wider property and management functions to be carried out. 
  • There are systems in place for emergency, routine, and cyclical repairs to the building (including the services and curtilage), property improvements, and tenancy management.
  • Arrangements for dealing with anti-social behaviour and neighbourhood issues.
  • Engagement with the council, police, and other agencies.
  • Inclusion of licence conditions to require good management arrangements to be achieved, including attending appropriate training courses. 
  • Membership of recognised landlord organisations or the Leeds Rental Standard may be taken as evidence of competence, particularly as they can be called upon for advice and assistance, where necessary.

Data sharing

  • Information obtained during fit and proper person assessments may be shared with other local authorities, the police, and other statutory bodies in line with the council’s data sharing policies.
  • Applicants consent to this through the licence application process.