Today, Sir Stephen Silber (sitting as a Deputy High Court Judge) dismissed a judicial review challenge brought by a consortium of developers and private landlords against the decision of the London Borough of Croydon to introduce a selective licensing scheme for all private landlords in their borough: R (Croydon Property Forum Limited) v. London Borough of Croydon. The effect of the decision is that, from 1st October 2015, all private landlords (other than landlords of Houses in Multiple Occupation, which are governed by a different regime) will have to obtain a licence from the council if they wish to rent out their properties. Failure to obtain a licence attracts criminal liability.
The statutory scheme for selective licensing is contained in Part 3 of the Housing Act 2004 (“the 2004 Act”). The London Borough of Croydon formed the view that the borough was “experiencing a significant and persistent problem caused by anti-social behaviour; that some or all of the private sector landlords who have let premises in the area (whether under leases or licences) are failing to take action to combat the problem that it would be appropriate for them to take; and that making a designation will, when combined with other measures taken in the area by the local housing authority, or by other persons together with the local housing authority, lead to a reduction in, or the elimination of, the problem”: section 80(6) of the 2004 Act.
Before introducing the scheme, the Council was under a statutory obligation “to take reasonable steps to consult persons who are likely to be affected by the designation”: section 80(9) of the 2004 Act. Private developers with an interest in doing business in the borough challenged the Council’s decision on the basis that they had not been consulted: they alleged that no “strategy” had been prepared to consult with them, and some of them did not know of the consultation.
The judge dismissed this contention. “Reasonable steps” did not mean “all steps” or “every step” or even “all reasonable steps”. On the facts, the judge held that there had been “comprehensive publicity” about the consultation via “the Council’s own publications, advertisements in local newspapers, posters and flyers, information as a standard footer to all the Council’s emails, information on plasma display schemes.” As a consequence, the judge held that “the consultation is highly likely to have been drawn to the attention of any person with an interest in what was going on in Croydon”, and that “it would be reasonable to assume that any person or any entity which was investing or which was preparing to invest substantial sums in property in Croydon would regularly review the local media to ensure that they were fully aware of all matters relevant to their investment”. This would have been the expected “due diligence” for developers to carry out.
Clive Sheldon KC appeared for the London Borough of Croydon, instructed by John Cooper and Kieran Laird of the Public Law & Regulation Team at Wragge Lawrence Graham & Co LLP.
Read the judgment here.
