Private landlords in Croydon have failed in a High Court bid to stop them being charged for a licensing scheme to tackle anti-social behaviour and crime.
There had been "a significant and persistent problem with crime and anti-social behaviour in the borough", said judge Sir Stephen Silber.
He said Croydon Council thought the problem was linked to landlords "failing to take action". Landlords must pay £750 for each property every five years.
The decision follows an application for a judicial review by Croydon Property Forum, a not for profit company made up of landlords.
They said they were not properly consulted before the council decided its "selective licensing scheme" should apply across the borough.
But Sir Stephen Silber said: "I am quite satisfied that the council complied with its duty to take reasonable steps to consult with local people to be affected by the designation, including developers and landlords."
The scheme, which will be introduced from 1 October, was brought in by the council under the 2004 Housing Act.