Warnings have been issued to rogue landlords in Wolverhampton after council officers issued a £16,000 penalty to a homeowner flouting the rules.
Wolverhampton council handed a Whitmore Reans landlord the huge financial penalty for running a house in multiple occupation (HMO) without a licence.
It is the first time the council’s housing team issued a civil penalty to a landlord for failing to abide by its rules.
Deputy council leader Councillor Peter Bilson said the case should serve as a warning to landlords across Wolverhampton.
The cabinet member for city assets and housing added: “This is a stark warning to private sector landlords that they must comply with the HMO rules in the Wolverhampton.”
The council said the fine, which will be reduced to £10,600 if paid in full within 28 days, signals the start of a tougher approach to managing private sector landlords.
Powers are now in place to enforce civil penalty notices of up to £30,000 per offence, and new licensing rules for HMO will come into force on October 1.
Government officials will bring in the changes to HMO licensing in a bid to improve standards of housing across the country.
Key changes will include needing to obtain licences for some properties occupied by five or more residents, living in two or more separate households and sharing amenities.
It will apply to single and two-storey properties, as well as purpose-built, self-contained flats in a block of no more than two self-contained flats.
Councillor Bilson added: “Through our Rent with Confidence framework we continue to work closely with private landlords across the city.
“It is important they are fully aware of the new government regulations that come into effect from October 1 and that we will be doing everything in our power to enforce them.
“Rent with Confidence supports responsible private housing businesses in the city and aims to improve the quality and choice of housing for private sector occupiers.
“We are here to advise landlords on the new changes and we will continue to work with landlords, agents, owners and service users by providing a range of information and guidance through the Rent with Confidence scheme.
“Providing further protection of health, safety and welfare rights for tenants in the city is vital.”
Last year, the council announced it would be extending enforcement powers handed to its officers so they could dish out fines of up to £30,000 to landlords breaking housing laws.
But the council may reduce the charge if rogue landlords agree to work to address issues.
They will need to agree to be registered with the Rent with Confidence scheme – a five-star rating system – and achieve at least a three star rating.
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Cabinet members at Sheffield City Council have formally approved a Selective Licensing scheme for an area of the city to come into force on 1st November, with a £30,000 civil penalty or prosecution if landlords fail to apply for a licence.
The Council ran a consultation from November 2017 to February 2018 asking for views on introducing a licensing designation area covering London, Abbeydale and Chesterfield Road, totalling 668 properties.
The cost of a licence will be £750, divided in to a 2-stage payment system and will run for five years until 1st October 2023.
As part of the reasons to approve, the Cabinet referenced their statutory duty to address hazards in private rented properties, and whilst they acknowledge that most landlords in Sheffield are good, Selective Licensing was proposed “because the problems uncovered in this area are too widespread and significant to be dealt with on an individual property/landlord basis”.
What is Selective Licensing?
Selective Licensing is a discretionary power, introduced in the Housing Act 2004. It imposes a legal requirement for all residential landlords in a designated area to apply for a licence for each residential property they rent out in that area. The Council are able to impose conditions to the licence that will improve property and management standards for a certain area.
As part of the application process for the licence, landlords will have to show that they are a ‘Fit and Proper’ person, examples including having criminal convictions which may affect their management of the property, and that they have satisfactory management arrangements in place to deal with repair and maintenance issues, and with tenancy problems such as rent arrears and anti-social behaviour.
It has been advised that all landlords and managing agents should obtain advice to ascertain whether their property is affected by the designation by contacting the Council’s Private Housing Standards Team
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Owners are angry with councils for demanding hundreds of pounds for licences and claim it’s just to boost coffers
Landlord licensing schemes are popping up all over the country as local authorities attempt to crack down on rogue operators.
Nottingham city council’s scheme starts next month, while the London borough of Bexley’s begins in October, and Brighton is awaiting official approval for a scheme that would affect 27,000 properties. Luton is one of a number of other areas discussing the idea.
How these typically work is that all landlords pay several hundred pounds for a licence, and they, and their properties, are subjected to legal checks – with penalties of up to £30,000 if they don’t comply.
Councils say these “selective licensing schemes” are a key weapon in the battle to improve standards in the private rented sector, weed out landlords putting tenants at risk, and to deal with crime and antisocial behaviour – rubbish in front gardens, noise and so on – often associated with bad-quality accommodation. And some want even stronger powers.
However, some owners claim these schemes are a money-making exercise simply designed to boost council coffers. A quick number crunch suggests Brighton’s would bring in between £12m and £16m, while Nottingham will raise between £14m and £23m. Some argue that the worst criminal landlords will simply carry on staying under the radar.
Late last month the government announced a review to look at how selective licensing is being used and whether it is working well.
What exactly are these schemes?
Selective licensing allows councils to make it compulsory for every private rented property in a specified area to have a licence. (There are two other types of landlord licensing, mandatory and additional, that only apply to people letting out houses in multiple occupation, or HMOs).
In these areas, a landlord must apply for a licence if they want to rent out a property. This means the council can check whether they are a “fit and proper person”, as well as laying down other requirements concerning the management of the property and health and safety.
The schemes work in different ways, but things a landlord might be required to provide include a valid gas safety certificate, an electrical installation condition report, a copy of the tenancy agreement and evidence of landlord insurance. Typically, a licence lasts five years.
How many councils are doing this?
Lots. At least 55 either have a scheme in place or would like to set one up, according to the Residential Landlords Association (RLA).
A number of London local authorities run them, including Brent, which earlier this year won approval to extend its scheme into five more wards. Meanwhile, the new Bexley scheme covers four areas – Thamesmead North, Abbey Wood, Lower Belvedere and parts of Erith. It started accepting licence applications earlier this month ahead of the 1 October start date.
However, it’s not just in the capital. Gateshead has several schemes, Blackpool council runs one, and Brighton has applied for approval for a scheme that would cover 12 wards, including Preston Park, St Peter’s and North Laine, and Hanover and Elm Grove. Nottingham’s will cover “most” of the city – more than 30,000 homes – and comes into force on 1 August.
How much is a licence?
It varies. In Nottingham they are £780, or £480 if you are a locally accredited landlord, and a separate licence is needed for each property, even if it’s one person who owns several homes.
Gateshead’s standard fee ranges from £550 to £1,000, depending on how early or late you apply, while Bexley’s is £690, with an “early bird discount fee” of £371. The London borough of Waltham Forest’s is £650, while Brighton is proposing a standard £460, or £600 where the council has to do a lot of legwork.
What about good landlords who already manage their properties well? Many of the councils say they accept that lots of property owners or managers already deliver good-quality and well-managed homes, but that they can’t exempt them from the schemes. However, in many cases councils offer a discount to landlords who have accreditation.
Are landlords unhappy?
Yes, some are. David Smith, policy director for the RLA, says the schemes rely on landlords pro-actively making themselves known to their local authority. “Criminal landlords who fail to provide secure and safe accommodation to their tenants will not come forward,” he says. “Councils need a much smarter system to find and root out those who will never willingly make themselves known.”
A Guardian Money reader told us that he and his wife have a one-bed buy-to-let property in the Belvedere area of Bexley. He claims the council is “cashing in” on the Crossrail project by “fleecing” buy-to-let landlords, adding: “It appears that the council has deliberately picked the four wards most likely to benefit from any ‘Crossrail bounce’. We bought the property earlier this year and spent more than £13,000 doing it up to provide a really nice place for a young couple. It’s to be commended when councils crack down on HMOs [houses in multiple occupation] and rogue landlords, but … why are they going after private landlords with one or two tenants rather than the main (potential) offenders? It can only be a money-making exercise. How can they possibly justify such an outrageously high charge?”
Bexley council says it received strong support from owner-occupiers, tenants and businesses. It adds that its fees “are among the lowest in London”, with discounts to support good landlords who come forward. It says it has been working to identify what it can do to support responsible private renting.
What’s the view of other councils?
Newham in London – the first council to license all private properties – probably spoke for many last week when it said it wanted tougher civil penalties to discourage rogue landlords letting dangerous and overcrowded properties, and the power to confiscate properties from the worst offenders.
What of the “money-making” claim? Local authorities firmly reject this: Brighton says it is only allowed to cover administration costs, while Nottingham says it is not permitted to make a profit.
I’m a tenant. Can I check the property is licensed?
Yes. By law, councils have to keep a register; Newham has an online searchable database. In theory tenants will be able to “shop” landlords and land them with large fines.
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A rogue landlord letting a cold, damp property with a lack of hot water and heating has been ordered to pay more than £12,000 for allowing tenants to live in poor conditions.
Stephen John Gleave from Prestatyn, Flintshire, has been found guilty of seven offences under housing legislation for allowing a mum of two to live in substandard conditions, which included poor kitchen and bathing facilities and poor fire safety provisions.
Flintshire County Council’s Environmental Health team decided to take action against Gleave, who has previous housing offence convictions, after the landlord failed to comply with an Improvement Notice and six other housing offences relating to the terraced house in Shotton, also located in Flintshire.
Offences included failing to register the rental properties with Rent Smart Wales and failing to obtain a licence to operate as a private landlord in Wales, despite both being legal requirements since November 2014.
In fact, Gleave failed to register all three of his rental properties in Flintshire with Rent Smart Wales and failed to apply for and carry out mandatory training in order to become licensed to operate as a landlord in Wales.
Flintshire County Council’s cabinet member for planning and public protection, Cllr Christopher Bithell, said: “This successful prosecution reflects Flintshire County Council’s commitment to ensuring homes in the private rented sector meet all the legal standards required for private housing in Wales.
“We believe everyone has the right to live in a home which is in good repair, has ready access to all necessary amenities and is free from physical hazards.
“Whilst we aim to reduce the health effects of poor housing conditions through a combination of advice and financial assistance, occasionally we deal with matters that are so serious that a prosecution is necessary.
“This prosecution sends out a clear message to other private landlords, that non-compliance with current housing standards and non –compliance with the Rent Smart Wales laws – is completely unacceptable.”
Gleave, who has was fined £10,600 and ordered to pay £1,688 costs.
This is not Gleave first offence as a landlord.
Last December he was fined more than £11,000 after leaving an elderly tenant without adequate heating and bathing facilities, along with poor kitchen amenities, inadequate fire safety provisions and slates falling off the roof.
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