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Housing Act Guide

Transfers / Sales Of Licensed Properties

Can a licence be transferred

No  - No provision is made in the Act for licences to be transferred; indeed licences are expressly stated to be non-transferable.  If a property is sold or otherwise transferred application will have to be made for a new licence to be granted and for the old licence to be revoked.  If this is not done then the existing licence holder would remain liable in respect of the property notwithstanding its sale/transfer. 

As the purchaser will not have a licence can the sale go ahead in the usual way

Where a property is sold it is likely that this will be by way of a conditional contract.  Completion would only take place when a new licence was granted.  Under the Act the licence could be expressed to take effect from completion.

The Seller may be concerned to ensure that once completion has taken place his own licence ceases to be of effect and that the new owner takes over responsibility as licence holder (or an agent on his behalf).   This will depend upon whether the local authority is concerned to ensure that there is a successor licensee. 

If the licence is not revoked the outgoing licence holder could remain responsible for a property he no longer owns/controls. 

A Buyer will not want to lay out the purchase money unless and until he knows he has a licence.  Moreover, where a mortgage is involved, the lender will not want to release the mortgage funds until he knows that the property is licensed.  The new owner will only be granted a licence provided that the local authority concerned is satisfied that the new licence holder (or his agent) is a fit and proper person and that the management arrangements are satisfactory.  This may not be so much of a problem where the Buyer already holds a licence granted by that particular local authority. 

When a new licence is granted consideration will also have to be given to the amenities available in the property and any other issues which were subject to conditions under the old licence.  There may, therefore, be changes involving a requirement to do works.  Standards may have changed in the interim since the grant of the original licence.  There may then be issues as to who will pay for any works which might be required.  If extensive works were to be required or new conditions were to be imposed then the Buyer might not want to proceed. 

This document was last updated on: 17/05/2007

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IMPORTANT: Our website (including the Unique Property Selector) can only give general guidance. You always need to specifically check the status of any property individually and take appropriate advice including general guidance from the local authority where it is located.

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