We queried this with the DWP as follows:
“Advice needed please – Is there a knock on effect with the April 2006 requirement for certain types of landlord to be licensed by the local authority?
The authority in granting the landlord a license is considering whether a landlord is a ‘fit and proper person’ to let the property and a landlord will be committing a criminal offence if they let a property without a license.
I can see that if a landlord is not granted a license then may be reasonable to consider that they are not ‘fit and proper’ to receive direct payments of HB. However, as they are committing a criminal offence should this not have a greater impact on the claim – ie should we be paying this at all?
If one part of an authority (benefits service) accepted that benefit could be paid on accommodation that should be licensed (albeit not direct to landlord) would this not be assisting someone to commit a criminal offence by accepting that the liability is sufficient for HB purposes?”
The DWP replied as follows:
“As you know, the situation here is that if a landlord is not considered a fit and proper person for licensing purposes then he cannot be licensed. And the “fit and proper” test that is used in this context is far broader than the one used for HB direct payments. The Housing Benefit test has a narrow focus in that it looks at the landlords past degree of probity in relation to Housing Benefit. We did consider whether there was scope for at least some degree of harmonisation of these tests, but this was not possible as the primary powers to allow for the relevant information flows do not exist. Therefore the local authority must consider the HB test as a separate issue, and in theory this could mean that a landlord is a fit and proper person to receive HB payments, but not to be licensed. The fact that a landlord is not licensed and should be does not mean that he will not have a rental liability, but there will be penalties for failure to register such as fines and management orders, so landlords should (in theory!) not remain unlicensed and with tenants for too long.
I hope that this explanation is helpful
Maggie Simpkin
Housing Benefit Strategy Division”
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