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14/7/25 8:13 pm
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COMMENT: Rachel Reeves’ selective licensing debacle
A lesson in hypocrisy and chaos?
Rachel Reeves has apologised for letting a Southwark property without the required selective licence — it was an “honest mistake”, she says.
Here are the facts, briefly: Ms Reeves admitted the property was let without the selective licence and said she applied for one immediately the omission came to light. She claimed she wasn’t aware of the rules and the need for a licence, even though she had just days before campaigned for a selective licensing scheme in her own constituency in Leeds.
Two things made her political situation worse. First, Reeves’ initial apology letter to the Prime Minister included a version of events that simply downplayed her knowledge of the rules on licensing. Then out came the published emails showing the letting agency had already discussed the licence requirements with her or her husband.
So, there were now two letters in play: an initial note to the Prime Minister indicating she had not been aware of the requirement, and a later one acknowledging the emails which had been received previously referring to the licence and giving the agent’s promise to handle it for them.
Secondly came the “blame the agent” line. Letting agents do fall-down in their duties and landlords fail in their oversight, often not realising that the basis of any landlord / agent relationship is that landlords are ultimately responsible for the actions of their agent.
In the case of selective licensing the responsibility is shared between landlord and agent if the agent so if a fine was made it could be argued that both should share the cost.
Agent culpable
Fortunately for the Reeves the agent admitted its failure to follow through with a licence application, which should have been done before the tenancy commenced, giving the council the opportunity to inspect the condition of the property before occupation.
However, that apology from the agent does not erase Reeves’ legal exposure as the property owner under the Housing Act, which categorically states that failure to licence a property is a (criminal) offence and ignorance of the law is not a defence.
That’s why this is quite serious and why it will matter to ordinary landlords who find themselves before a tribunal or court or facing a hefty civil penalty. In fact, landlords have in the past been fined for failing to secure a licence even though they were unaware of the necessity to have one.
It is quite legitimate for a letting agent to process a selective licence on a landlord's behalf, and crucially the agent is legally obligated to ensure the property has one before occupation. While the ultimate legal responsibility for obtaining the licence lies with the landlord, a managing agent acting on their behalf is considered the "person managing" the property and therefore shares this responsibility.
The agent’s administration
The agent gave the excuse that the individual dealing with the letting had left the agency abruptly and the issues of the licence application had been overlooked because of this. It would seem therefore the agent didn’t have the necessary administrative systems in place to ensure that whoever took over administering the letting would know of the requirement. Whether that was just sloppy record-checking or a more serious misstep is now part of this political story.
However justified the excuse for absolving Rachel Reeves of some of the blame, it didn’t take away the fact that her and her husband had failed to check that the agents had done their job. She nevertheless had to suffer the embarrassment of having to write a second letter to the PM, to explain away her failure, for which she was admonished, but forgiven a second time.
Forgiveness
Perhaps we too can forgive Rachel Reeves and her husband, both busy people with one on two things on their minds. But it’s surely a bad look for those, in very senior positions in government, to expect others to abide by laws made by them.
The story goes well beyond a politician’s short-term embarrassment. It has highlighted how the growing complexity of housing regulation affects landlords’ everyday practice. When we have muddled rules and inconsistent enforcement people don't know where they stand.
Inconsistencies
A system that tripped up Reeves, selective licensing in England is a postcode lottery when different boroughs, different fees and different conditions trigger an offence. There is no single national scheme that tells landlords whether they need a licence or not.
The result is a strict (criminal) liability offence hanging over people who may be blissfully unaware when they make an honest misstep. Professional agents who have received the appropriate training have no excuse but for the average – often “amateur” - landlord, the fact they need a licence may be the last thing they think about.
The fact that Ms Reeves had publicly backed selective-licensing measures in her Leeds constituency just days before the revelation opened her to the charge, she was aware of the scheme and was lecturing others on rules she had not properly followed herself.
Leeds landlords could be forgiven for being cynical. If a high-flying MP campaigning for licensing in her own constituency can fall foul of the regime, what hope for the thousands of smaller landlords managing properties across different boroughs?
The system relies on individual due diligence and this case gives the impression that enforcement is arbitrary and inconsistent and fuels the argument that selective licensing is purely a revenue-raising exercise rather than one that seriously attempts to improve housing standards.
Forgetfulness
Regardless of the excuses, did the campaign not jog a thought in Ms Reeves mind that she may need a licence herself, or that she should check with her agents or the local authority of the need for a licence and if so whether one had been applied for? No, it seems not.
The optics are certainly bad when landlords are given such a poor example, a technical breach that surely matters quite a lot in terms of setting an example, and it shows the gulf between rhetoric and practice.
Enforcement
Perhaps the most surprising aspect to come out of this whole saga is the different attitudes adopted by local authorities towards enforcement and enforcing the various penalties open to them.
Fortunately for Reeves and the agents involved, Southwark Council don’t intend to pursue the matter, and it would see her tenants too as they would otherwise be entitled to a 12-month rent return of around £38,000.
While Southwark’s rules allow tenants to claim up to 12 months’ rent if they’re a tenant of an unlicensed property, a spokesperson for the council had said that enforcement action was reserved for those who failed to license their property when they have been notified of an error.
“When we become aware of an unlicensed property, we issued a warning letter advising the landlord that they have 21 days to apply for a license – enforcement action such as fines are reserved for those who do not apply within that time or where a property is found to be in an unsafe condition”
This, it seems to me, is just amazing, a surprising statement put out given this is a so-called criminal offence, and other landlords have been fined even when they didn't realise a selective licence was needed - ignorance of the law is not considered a "reasonable excuse" defence in legal proceedings according to guidelines.
The First-tier property Tribunal and Upper Tribunal have consistently ruled that not knowing about a selective licensing scheme does not provide a "reasonable excuse" for an unlicensed property. Landlords are expected to conduct due diligence they have said.
Councils and tribunals generally maintain that it is the landlord's responsibility to be aware of the legal requirements for their properties, which can vary significantly between different local authorities and even specific wards within a borough.
Does that Southwark Council statement give a cart banc excuse for landlords in the borough to wait for a warning letter before they need to apply for a selective licence? – it would certainly seem that way from the Reeves case outcome? Not that I’m advocating anyone to try it.
It would seem sensible for councils not to pursue matters if there’s a genuine excuse and every case should be judged on its merits, but this ambiguity is confusing. It does not remove the legal offence or the risk of large civil penalties if the council later decides the case merits them. It all seems like something of a post-code lottery.
What lessons for landlords and councils come out of this?
First, landlords can’t rely on agents as a shield to protect them from liability, nor should they rely on councils being so lenient. It is the landlord’s responsibility to check to make sure whether or not a selective licence is required in the borough, and if so, one is applied for before the tenancy commences.
If an agent offers to apply for a licence, landlords should get written confirmation, a deadline date and a copy of the completed application. If the agent fails to do what they said, then documentary evidence is vital to show that reasonable steps were taken. Ultimately, if the authority decides to pursue, that’s the only defence a landlord has that will mitigate the financial and reputational damage.
As we see in the Reeves case, councils vary greatly in the way they treat the offence. Every borough has its own regulatory regime and legal department, and it would be foolish for landlords to take the risk they would be let off with a warning in every case. Perhaps a national register of licensing designations would be helpful, and guidelines issued on the consistency of penalties.
If the objective of selective licensing is truly to achieve better housing standards, compliance should be more straightforward and enforced in a more consistent and proportionate way. That perhaps means clearer national guidance, an accessible register of licence-designated areas, and a process that distinguishes wilful neglect from inadvertent paperwork failings.
Politically, this will be an embarrassment for Reeves because it’s an easy narrative: senior politician, public campaigner, personal slip-up and a favourable council. But practically, it should scare the living daylights out of small-scale landlords who might juggle their properties with different letting agents, especially when they are inexperienced.
For critics and the lawmakers alike, the take-away from this is quite simple: if the rules are worth enforcing, make them easy to follow and consistently applied. If government ministers are to lecture landlords on standards, they should not get caught themselves.
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