Letting agents, who manage rented properties that fall under selective licensing rules which are not licensed, could face prosecution either with landlords or by themselves.

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Danny Kirwan solicitor of a law firm warns that if successfully prosecuted agents would not only face a large fine they would also end up with a criminal record.

Kirwan said: “Councils such as Liverpool have made it clear that they will go after managing agents that they deem to be flouting the rules and will not hesitate to prosecute where they feel it is appropriate.”

In September 2018, a letting agent was handed a criminal record and fined £4,000 following a prosecution by Liverpool City Council, for failing to license 12 properties under the city's selective licensing rules.

It was reported that the City Council had served 1,700 legal notices since April 2015 when it first introduced the landlord's licensing scheme and was considering 1,300 prosecution cases.

A Freedom on Information request at the beginning of the year showed that Liverpool City Council was the most 'enthusiastic' council for prosecuting agents as over a four year period, it had achieved 13 successful prosecutions against letting agents.

Twenty councils were asked if they had prosecuted any agents with 53% saying they had not and 32% had prosecuted no more than three.

Kirwan continued: “Section 88 of the Housing Act 2004 states that the proposed licence holder is ‘out of all the persons reasonably available to be licence holder in respect of the house, the most appropriate person to be licence holder’. It also states that the proposed manager of the house is either ‘(i) the person having control of the house, or (ii) a person who is an agent or employee of the person having control of the house’.

“Clearly the legislation anticipates that someone who is managing property, the subject of licensing, can also apply for and be granted a licence instead of the owner.

“In my opinion, many of the managing agency agreements which are operated by estate agents etc all over the country come within this bracket.

“It is, of course, a matter for the owner of the property who can - and often does – obtain the registration in his own name, particularly in cases where there is only a small portfolio of properties.

“Alternatively, if the property is being managed in every sense of the word by a letting agent, there is nothing to prevent the owner delegating this function to the managing agent who then applies for the licence. This surely is what an owner/landlord is looking for when he pays his commission to the managing agent?”

Kirwan explains that due to Section 95 of the Housing Act, a person has committed an offence ‘if he is a person having control of or managing a house which is required to be licensed under this part but is so not licensed’.

He added: “Managing agents need to be on their guard and ensure that all properties on their books are covered by the relevant licences to safeguard themselves against legal action, while landlords should check the agreements and terms of business set out in the contracts with their agents.

“However, if the agent has agreed to apply on behalf of the owner of registration then it does not matter if that is not specifically referred to in the agreement.

“It would be better, though, to have such a provision that in the terms of the ‘management’ of the property, the application for and compliance of all the terms and conditions of any subsequent registration licence is included as an agent’s responsibility.”