If I hold multiple properties under different limited companies but they are all in the same selective licensing area, do I need to apply for a separate license for each property under each company, or can I get a group landlord license?
Quick Answer
Each property in a selective licensing area requires a separate, individual license application, regardless of company ownership or location within the same area.
Navigating property licensing can be one of the trickiest parts of building a portfolio, especially when you start introducing limited companies into the mix. There's a common misconception that if you own multiple properties through various corporate vehicles, or even as an individual, in the same licensing area, you can somehow streamline the licensing process. Let's get this clear from the start: when it comes to selective licensing, the focus is squarely on the individual property, not on the landlord's overall portfolio size or the complex corporate structure behind it.
Selective licensing schemes are applied at the property level. The local authority designates specific areas where all privately rented properties within those boundaries must be licensed, regardless of their size or the number of occupants (unlike HMO licensing). This means that each individual property you own, even if it's in the same street as another one of your properties and held under a different limited company, will need its own distinct license application. There's no 'group landlord license' available for these types of schemes, nor does the presence of multiple limited companies change this fundamental requirement. Each property is considered a separate entity for licensing purposes, attracting its own application process, fees, and compliance checks. This is a crucial point many investors misunderstand, and it can lead to unnecessary delays and even fines if not managed correctly.
## Understanding the Basics of Property Licensing Requirements
* **Individual Property Focus:** Selective licensing is fundamentally about the **individual property**. Unlike some other forms of regulation which might look at the landlord's whole portfolio, selective licensing mandates that each privately rented home within a designated area must secure a licence.
* **Mandatory HMO Licensing:** Separately, if any of your properties house **five or more occupants forming two or more households**, then that property requires a mandatory HMO licence, irrespective of selective licensing. This applies to each individual property that meets the HMO definition, adding another layer of complexity. For instance, if you have a 5-bedroom property generating £2,500 per month in rent, and it fits the HMO definition, it will need an HMO licence.
* **Additional and Discretionary HMO Licensing:** Some councils also apply **additional HMO licensing** (for smaller HMOs, e.g., 3-4 occupants) or **discretionary selective licensing** (for any rented property) across wider areas or specific property types. It's vital to check the specific requirements of each local authority you invest in.
* **Fit and Proper Person Test:** Every license application, whether for an HMO or selective licensing, requires the proposed license holder and any managing agents to pass a **'fit and proper person' test**. This assesses criminal convictions, breaches of housing law, and evidence of discriminatory practices. Each company director or individual landlord named on an application must satisfy this criterion.
* **Compliance with Conditions:** Licenses come with various conditions, including ensuring the property is **safe, well-managed, and meets specific standards**. This might include gas safety certificates, electrical safety checks, smoke alarms, carbon monoxide detectors, and maintaining the property's condition. Non-compliance can lead to revocation of the licence or significant financial penalties.
Let's consider an example. Suppose you own three properties on the same road in Manchester, all falling under a single selective licensing scheme. Property A is owned by 'YourCo Ltd', Property B by 'Investment Holdings Ltd', and Property C by 'Potter Properties Ltd'. Even though you, Steve Potter, are the ultimate beneficial owner of all three companies, and they are all in the same selective licensing area, you will need to submit three separate applications, one for each property and its respective owning company. Each application will incur its own fee, typically ranging from a few hundred pounds up to over £1,000 depending on the council. For instance, if a council charges £750 per selective licence, these three would cost you £2,250 in total just for the licensing applications themselves. This doesn't include any works required to bring the properties up to standard.
## Common Pitfalls and Misconceptions to Avoid
* **Assuming a Group License Exists:** The biggest mistake is assuming local authorities offer a 'group landlord license' or a discounted rate for multiple properties under various companies. This is simply not how selective licensing works. Each property, regardless of its owner's portfolio size or corporate structure, is assessed individually.
* **Ignoring Corporate Veils:** Trying to group properties owned by different limited companies under one application because you are the director of all of them will not work. Each limited company is a separate legal entity, and the local authority will treat the property and its immediate owning entity as distinct. They are not looking at your personal ownership structure, but the legal owner of the specific asset.
* **Overlooking Local Authority Variations:** Licensing schemes, designated areas, and fees vary significantly between councils. What might apply in one borough in London could be completely different in a city like Leeds or Birmingham. Failing to research the specific requirements of the local authority where your property is located is a sure way to run into issues. Some councils have clearer guidance than others, but it's always your responsibility as the landlord to do your due diligence.
* **Delaying Application:** Operating an unlicensed property in a selective licensing area is a criminal offence. Penalties can include unlimited fines, a Banning Order, or civil penalties of up to £30,000 per property. Many councils are now proactively seeking out unlicensed properties, so applying late or not at all carries significant risk.
* **Not Budgeting for Fees and Works:** Licensing isn't just about the application fee. It's also about ensuring the property meets all required standards. This might involve anything from upgrading fire doors to ensuring minimum room sizes for HMOs (e.g., single bedroom must be at least 6.51m²). These compliance costs need to be factored into your investment calculations upfront. The costs associated with securing an EPC rating of 'C' by 2030 (the proposed minimum for new tenancies) for all your properties could prove a significant capital outlay too.
* **Failing the 'Fit and Proper Person' Test:** Any unspent convictions, a history of non-compliance with housing legislation, or even complaints from tenants that have been upheld can jeopardise your ability to secure a licence. If you, or a director of one of your companies, fail this test, it can lead to a refusal and potentially impact your ability to rent out any properties from that point forward.
## Investor Rule of Thumb
When it comes to property licensing, always consider each asset individually, apply separately for each property, and assume no shortcuts exist for portfolio or corporate structures.
## What This Means For You
Understanding the nuances of property licensing, especially with multiple limited company structures, is non-negotiable for serious property investors. Most landlords don't lose money because they ignore licensing, they lose money because they assume a simplified process or fail to budget correctly for each individual property. If you want to ensure your portfolio is fully compliant, profitable, and strategically structured to navigate these complexities, this is exactly the kind of detailed, actionable advice and forward planning we focus on inside Property Legacy Education. We help you build a robust and legal foundation for your property wealth.
Remember, your properties are generating an income that may be subject to Corporation Tax at 19% for profits under £50k, or 25% for profits over £250k. The costs of licensing and compliance are legitimate business expenses, but they must be managed effectively so they don't eat into these profits. Factor in these overheads from the outset, just as you would factor in the 5% additional dwelling Stamp Duty Land Tax surcharge on any new purchases.
Steven's Take
This question highlights a very common point of confusion among investors, especially those who diligently set up SPVs for each property. It's a natural assumption to think that if you're the beneficial owner across several entities in the same area, there might be a bulk discount or a streamlined application process. However, the regulatory landscape, particularly with selective licensing, focuses heavily on the individual property itself. Each brick and mortar asset is considered separate. My advice is always to approach licensing with a 'one property, one license' mindset. Factor in the administrative burden and costs for each license when you're doing your due diligence on a deal. Don't let your corporate structure blind you to the property-specific compliance demands. A strong compliance record is foundational to building a long-term, sustainable property business, and cutting corners here can jeopardise your entire portfolio.
What You Can Do Next
Identify all local authorities where your properties are located: Licensing schemes are hyper-local, so start by pinpointing every council governing your existing and potential investment areas.
Check each local authority's website for current licensing schemes: Look specifically for Selective Licensing, Mandatory HMO Licensing (5+ occupants, 2+ households), and Additional/Discretionary HMO schemes.
Determine the specific licensing requirements for each individual property: Based on location, property type (HMO vs. single-family let), and number of occupants, ascertain which licences apply to each of your assets.
Budget for individual application fees and potential compliance works: Remember that each property will incur its own application fee, and you might need an EPC upgrade (C by 2030) or other works to meet licence conditions.
Prepare separate 'fit and proper person' documentation for each license holder/director: Ensure all individuals named on each application can pass the fit and proper test; any issues could affect all applications.
Submit a separate, complete application for every property requiring a licence: Do not attempt to group multiple properties or companies onto a single form; each is a distinct entity.
Keep meticulous records of all applications, licences, and communications: This will save you headaches during renewals, inspections, or if you ever need to dispute a council decision.
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