A court hearing over landlord Constantinos Regas's application to bring a judicial review against Enfield Borough Council's licensing scheme was set to last half an hour last Thursday, but saw four hours of arguments.
The scheme, known as additional and selective licensing, requires landlords to hold a £500 five-year licence from the local authority for each property they own.
Non-registration would carry a potential £20,000 fine and a criminal record, with breach of any licence conditions carrying a £5,000 fine.
Last week Lord Justice Ouseley ruled the selective licensing part of the scheme could ahead, stating there was no grounds for judicial review.
The selective licensing part will license all single household homes in the private rented sector and be brought in on April 1, 2015.
However, the additional homes in multiple occupation (HMO) licensing scheme, which will extend licensing to any shared accommodation with three or more people was ruled by the Justice as "arguably unlawful" and will now proceed to a further hearing at the end of November.
Mr Regas said: "The judgement was long and complicated. There is no clear winner. It would be wise for Enfield Council to consider this judgment carefully.
“They estimate that 40 per cent of private rented properties in the borough are small HMO house-shares.
“This ruling calls into question the financial viability of the scheme, as well as its enforceability. It is unclear how much council subsidy would be needed to make it work and I call on the council to scrap the entire licensing scheme."
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However, Councillor Ahmet Oykener, cabinet member for housing and estate regeneration, described the result as “an important victory.”
He said: “This is an important victory for Enfield Council, and tenants, because this scheme will help improve standards in private sector rented accommodation, drive down anti-social behaviour and enable the council to take action against landlords who do not meet the required standards.”
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