FoI responses from 293 English councils reveal string of weaknesses in private rented market law
Almost 90% of local authorities failed to use new powers to fine rogue landlords last year, in the latest finding to suggest tenants are being failed by a lax enforcement regime.
It follows a Guardian and ITV News investigation in October, which revealed a string of weaknesses in the legislation governing the private rented market and which also raised questions about the rigour with which certain councils pursued any offenders.
Only 11% of local authorities issued a civil penalty notice against a landlord or letting agent during 2017-18, according to data provided by 293 English councils responding to freedom of information requests made by the Residential Landlords Association (RLA).
Civil penalties were introduced in April 2017 as an alternative to councils bringing criminal prosecutions. The new powers allow local authorities to fine landlords up to £30,000 – penalties the borough could keep.
The RLA’s data also showed that the average fine levied during the first year of civil penalties was £6,392 while, out of a total of 332 civil penalties issued, 271 were made by London boroughs.
David Smith, the RLA’s policy director, said: “These results show that for all the publicity around bad landlords, a large part of the fault lies with councils who are failing to use the wide range of powers they already have.”
The Guardian and ITV recently revealed that convicted landlords who have been ruled unfit to rent out their properties were continuing to operate by exploiting loopholes in the law.
The investigation also revealed that central government’s new rogue landlord database was completely empty six months after its launch. It found that more than one in seven councils in England and Wales had failed to prosecute a single bad landlord over the past three years, despite some having very high numbers of homes classed as “non-decent”.
Those prosecution figures were mirrored by other data collected by the RLA, which also found that 67% of local authorities across England and Wales failed to commence a single prosecution of a landlord during 2017-18.
A spokesman for the Local Government Association, which represents local authorities in England and Wales, said: “The private rented sector is growing and, with limited resources and competing funding pressures, councils are working hard to ensure that complaints from tenants are prioritised and dealt with appropriately.”
He added: “When councils do prosecute they are too often being hamstrung by a system not fit for the 21st century.”
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A proposed licence condition set out by Burnley Council which would require property managers to live within a 40 minute drive of the property they let out has been labelled ‘excessive’ by the RLA.
The licence condition is just one of the things that Burnley Council would require landlords to comply with, should the proposed selective licensing scheme come into force in the town.
Burnley Council is proposing to extend existing selective licensing schemes in the areas of Trinity, Gannow and Queensgate as these are due to end in 2019. As well as this, the council in planning on introducing a new selective licensing scheme in the areas of Daneshouse and Stoneyhome.
The council ran a twelve week consultation on these plans, and invited landlords, residents and other interested parties to share their views in this.
The RLA’s response to the consultation
The RLA has raised a number of concerns with the proposed selective licensing scheme in these areas of Burnley and has also highlighted to the Council alternatives that could be used instead of selective licensing. You can read the draft licensing proposal on the council’s website here, and read the RLA’s response to the consultation on this proposal here.
Landlords in the areas where selective licensing is in place would be expected to pay for a licence in order to let out there property lawfully. Licences also come with a set of conditions which landlords must also adhere to.
In the RLA’s response to this consultation, we argue that licensing schemes do little but alienate law abiding landlords because they are then burdened with additional costs. It is the criminal landlords who would continue to operate without a licence and effectively act ‘below the radar’, as they also ignore other regulations. In the RLA’s view, the high cost of a licence is not something that is affordable for landlords even with discounts being taken into consideration.
Condition that would require property managers to live within 40 minutes of the property
One of the licensing conditions is that the manager of the property must live within 40 minutes of the property.
Relating to this proposed condition, the RLA state that this is excessive and that matters like this should be dealt with AFTER the licence has been granted.
The RLA also points out that many landlords in fact run their businesses without being a 40-minute drive away from the property in question. Because of this, such a condition serves as a ‘barrier’ to good landlords, and the council should remove this condition.
Alternative to selective licensing
Selective licensing is dependent on a designation by the local authority. A local authority may designate the whole of their district or part of their district, subject to selective licensing.
An area may be designated for selective licensing either (i) if the area is (or is likely to be) an area of low housing demand or (ii) the area is experiencing a significant and persistent problem caused by anti social behaviour and some or all of the private sector landlords are failing to take action to combat the problem that it will be appropriate for them to take. A designation can last for five years.
As an alternative to selective licensing, we have set out a number of other methods that Burnley Council could take. This includes using the existing enforcement powers that council’s already have available to them, such as civil penalties and rent repayment orders as a way of tackling landlords in these areas who are not complying with the law.
In addition to this, Burnley Council has access to the Controlling Migration Fund, which allows local authorities to tackle local service pressures associated with any recently increased migration, which includes tackling rogue landlords and driving up standards.
The Government’s selective licensing review
In June, the Government announced that it will be holding a review into selective licensing, and the RLA urge Burnley Council to wait for the outcome of this review, the results of which will be published next Spring, before proceeding with this proposed selective licensing scheme.
What happens next?
The consultation on this selective licensing scheme closed on Monday 26th November, and the Council is currently collating all the responses. The RLA will update members of the progress of this proposed scheme.
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Lord Bourne of Aberystwyth Conservative Peer and Parliamentary Under-Secretary (Housing, Communities and Local Government), was speaking in the 2nd reading in the House of Lords on Friday the 23rd of November.
He would seem to have used very inciting and populist language that while directed at criminal landlords certainly does not help stop or ease the landlord community being generally vilified by politicians, the media and the public.
To give accurate context I have included the entire transcript of lord Bourne’s speech below:
“My Lords, I thank all noble Lords who have taken part in the debate. I am not at all surprised that the noble Lord opposite will not table any amendments because I know how responsible he is. I am grateful to him, as I am sure other noble Lords are. This Second Reading has been a debate of great content. Some very interesting and important points have been made, to which I will do my best to respond. In so far as I cannot do so from the Dispatch Box, I undertake to write to noble Lords and place a copy in the Library.
“In particular, I thank the noble Lord, Lord Best. I agree very much with the points made by the noble Lord, Lord Carlile, about the quality of the sponsorship of the Bills we have seen in the House today. We could not have a better pilot than the noble Lord, Lord Best; I thank him for his hard work on such a great cause. As other noble Lords have done, I also thank the honourable Member for Westminster North for introducing her Bill. I acknowledge her hard work in the other place; she has shown considerable determination in taking it through successfully. I am delighted that the Bill has received such widespread support across this House and in the other place.
“The noble Lord, Lord Best, has given us an effective overview of the Bill and why it is needed, and I echo that. It is an important Bill and we heard from many noble Lords in this debate about the fact that 20% of the housing in this country is in need of urgent attention. That underlines the importance of having this Bill. We heard that from the noble Lord, Lord Best, and my noble friend Lord Horam. The noble Baroness, Lady Grender, also echoed that point.
“This fairly short Bill builds on work we have been doing to improve housing conditions and tackle rogue landlords. I must say that, although I am as guilty of using it as anyone else, I wish we could get away from the phrase “rogue landlords” because it tends to make them sound a little too cuddly for my liking. “Bastard landlords” or something stronger would probably be more appropriate because they are far from being cuddly. I shall try to deal with the situations raised by noble Lords, particularly by the noble Baroness, Lady Grender, and the noble Lords, Lord Tope and Lord Shipley. All three asked about electrical checks, as did the noble Lord, Lord Kennedy.
“Since 2015, we have moved on the requirement to install a smoke detector on every floor in properties and carbon monoxide detectors where the heating system uses solid fuels. We have taken tough action in the private rented sector on civil penalties for recalcitrant landlords who need action to be taken against them, which can go up to £30,000. It is worth noting that those civil penalties can be retained by local authorities, which helps them with housing enforcement. We have seen Salford City Council use those powers recently against one landlord, issuing three civil penalties for the flouting of three separate legal responsibilities and fines coming up to £55,000. As I say, local authorities keep the proceeds of those civil penalties.
“Local authorities have the power to issue banning orders for landlords and add to them to the database. As noble Lords will know, we propose that the database should now become public, but I am afraid to say that that will happen when parliamentary time allows. I know that is a standard phrase which is trotted out. This issue does need legislative action, but we are dependent on the business managers finding time for that. As far as the department is concerned, this is certainly a high priority.
“Private tenants can now apply to get up to 12 months’ rent back if the landlord has not dealt with health and safety hazards and the local authority has taken enforcement action through rent repayment orders under the Housing and Planning Act 2016. We have extended property licensing so that more homes in multiple occupation now need a licence and we are going out to consultation, or perhaps review, on the issue of selective licensing. We will report on that in the spring. We have also announced that we will carry out a comprehensive review of the housing health and safety rating system. The noble Lord, Lord Best, rightly stated that if that is extended, it will automatically come within the compass of this legislation. We also plan to require all landlords to belong to a mandatory redress scheme, which I think is known and understood, and we are proceeding, as noble Lords have made clear, with the Tenant Fees Bill, which will reach its Report stage in your Lordships’ House the week after next. Subject to this Bill receiving Royal Assent, we will produce guidance for tenants, as has been suggested. I have covered that in a letter which has been sent round. In response to the question put to me by the noble Lord, Lord Tope, I intend that to include points on electrical safety. That was a point well made.
“I will try to pick up the points made during the course of the debate, but if I do not address them all I will seek to cover them in a letter to noble Lords. On security of tenure, as is, I think, widely known, the department is considering the position on three-year tenancies and will respond to this issue in the new year, so an announcement will be forthcoming early in the new year on this point.
“I was asked some specific questions relating to electrical safety standards. We put a question on the private and social rented sectors having the same requirements in the social housing Green Paper. I think the intention is that they should be dealt with in the same way. I cannot see any reason why they should not be. If I am wrong on that and there is a reason I will cover that in the letter, but it is not apparent to me. We will issue a letter announcing our intentions on this area before Christmas, so I hope noble Lords will bear with us on that.
“I thank the right reverend Prelate for the points he made, together with perhaps an anticipatory mea culpa in case there was an issue for the Church, but I am sure it is following good practice in this area. He made a point about legal aid, as did other noble Lords. I am always grateful when noble Lords exaggerate my powers, but as I am sure can be anticipated, this is not an area where I can opine from the Dispatch Box. I will endeavour to cover the point and, as was rightly said, there is a review in this area. I hope noble Lords will understand when I say that I will cover that in the letter, but I cannot give a definitive statement of where we are on that issue.
“I move on to points raised by the noble Lord, Lord Carlile. I agree with him on the importance of design. The design of buildings generally, not just for residences, has been a particular interest of mine. I also agree that modernist future design is important. In the National Planning Policy Framework we have, I think for the first time, a requirement to consider good design. It does not specifically mention modern design, but it certainly does not exclude it. Modern methods of construction and self-build will lend themselves particularly to more modern design. I know that the Secretary of State is committed to good design, but that does not exclude modern design. I will make sure that the points made in the debate are brought forward to my right honourable friend the Secretary of State. I agree with the point made by the noble Lords, Lord Carlile and Lord Tope, that sometimes in an area where you might good housing—university towns would certainly be part of that—something that looks like good housing from the outside looks very different once behind the door. That is something we need to bear in mind.
“We talked generally and correctly about the impact that poor quality and non-decent housing has on individuals but, as was said in the debate, it also has economic effects in terms of pressures on the health service, and I am sure it has an effect on kids’ education if they are off school and so on. It certainly has dreadful social effects as well. The points are well made, hence the importance of doing what we are doing.
“I thank my noble friend Lady Gardner of Parkes for bringing forward points about the ombudsman and a housing court, which she touched on, which are still very much on the agenda. As my noble friend mentioned, the noble Lord, Lord Best, is central to the issue of the ombudsman. We are looking at that ombudsman service and the housing court issue and will be responding on that, I think, in the new year as well. I will cover that in the letter.
“On holiday lets, which my noble friend mentioned, there is a special power for London in that there is a restriction of 90 days for the Airbnb-type let in London, as in other capital cities and tourist destinations around the world, such as Venice. There is a 90 days’ accommodation limit. My noble friend will know that the UK Short Term Accommodation Association is doing effective work to try to make sure that that is enforced in London. There is a separate issue with landlords enforcing the provision in their leases. I know from speaking with my noble friend yesterday that that can be a particular problem and is particular problem for her. I have great sympathy with that issue. I will write to her on that point to see if there is anything specific we can do, but I thank her for bringing those points up.
“I thank the noble Lord, Lord Shipley, for his contribution and support. He mentioned again the electrical issues and their importance in the context of Grenfell. We do not know with certainty about the cause of the fire—at least in a legal sense—because we have not had the criminal proceedings or the result of the inquiry, but he is right about the importance of this in general terms, so I appreciate the points he is making.
“I will write on the retaliatory eviction point. Certainly, there is protection where there has been an inspection of the premises by the local authority and it has confirmed that there is a legitimate complaint on the part of the tenant, but I will write more widely to cover how that is dealt with elsewhere.
“I thank the noble Lord, Lord Kennedy, once again for his support. I am very happy to discuss with him the point on compensation for loss. I can see why he thinks that is inconsistent, but I do not think it is. Our point here on compensation in relation to tenant fees is that it is legitimate for there to be a fine, where appropriate, of the landlord and for a return of the money, and compensation if there has been a loss, for example, if somebody has suffered illness and they can demonstrate that, which is what we are talking about here. Compensation for a loss is a bit different—I think the noble Lord is talking about exemplary damages. The noble Lord, Lord Carlile, will know the precise legal word.”
Click Here to read the transcript of the entire House of Lords debate
Click Here to follow the progress of the Homes (Fitness for Human Habitation) Bill 2017-19 through Parliament.
This Bill has bee supported by the RLA, NLA and ARLA and in summary:
“To amend the Landlord and Tenant Act 1985 to require that residential rented accommodation is provided and maintained in a state of fitness for human habitation; to amend the Building Act 1984 to make provision about the liability for works on residential accommodation that do not comply with Building Regulations; and for connected purposes.”
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The RLA has responded to a consultation by Barking and Dagenham Council, on plans to renew its selective licensing in some areas of the borough.
The Council is proposing that landlords in some areas of the borough pay £900 for a licence in order rent out their property lawfully.
The areas that this would affect are the wards of Abbey, Alibon, Becontree, Chadwell Heath, Eastbrook, Eastbury, Gascoigne, Goresbrook, Heath, Longbridge, Mayesbrook, Parsloes, River, Thames, Valence, Village and Whalebone.
The RLA’s response to this consultation
High licensing fee
The RLA has raised concerns about the high proposed cost of a licence that landlords would be expected to pay, in order to rent out their property lawfully.
The Council is proposing that landlords pay £900 to obtain a licence, a cost which the RLA believes will ‘alienate’ law abiding landlords.
In its consultation response, which you can read here , the RLA has raised a number of issues with Barking and Dagenham’s selective licensing proposal, in particular around fees, taxation reform and welfare.
Use existing enforcement powers
In the response, we also say that the Council should use existing enforcement powers that are already granted to them by the Housing and Planning Act 2016. This includes banning orders and civil penalties.
In addition, the Council has access to the Controlling Migration Fund, which allows local authorities to tackle local service pressures associated with any recently increased migration, which includes tackling rogue landlords and driving up standards.
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Landlord association calls the case ‘shocking’ and a waste of taxpayers money
Nottingham City Council has spent more than £95,000 of taxpayers money taking a landlord to court on the size of two student bedrooms – and lost on every occasion.
Council officers were so unhappy with the judge’s findings at a county court hearing that they appealed the decision.
The case was then heard at an upper tribunal at the High Court when, again, the decision weighed in favour of the landlord.
But the local authority continued to battle the verdict taking the case to both the Court of Appeal and Supreme Court, where they lost again.
A Freedom of Information Request shows from November 2014 to October 2018, the council has spent a total of £95,742 taking the case to different courts.
This includes £86,990 for legal costs, £1,405 on travel, and £7,347 on council staff.
Giles Inman, business development manager for East Midlands Property Owners, one of the largest landlord associations in Nottingham, called the case “shocking”.
He said: “In these times of austerity we are told the council does not have any money for this or that but they do for a nonsense case.
“If you go to a tribunal and you lose, okay, you appeal again at an upper tribunal but then you would give up.
“But they went to the Court of Appeal and Supreme Court and lost. It is just shocking.
“It is public money. When you look at the costs it is astonishing. We fell off our chairs when we saw how much. I have never come across something like this before.”
The case involved two HMOs (Houses of Multiple Occupancy) in Rothesay Avenue and Bute Avenue in Lenton, managed by landlord Dominic Parr.
Both are used for letting to students and in each case the attics have been converted into bedrooms.
The council says in the case of HMO bedrooms, where there is adequate dining space elsewhere and where cooking facilities are not provided in the room, the minimum space provision is eight square metres.
In each property the front attic bedroom has a sloping ceiling which reduces the area regarded by the council as “useable living space.”
In each case Nottingham granted a new HMO licence which imposed a condition prohibiting the use of the attic bedroom for sleeping.
However, each court agreed with the landlord and concluded the rooms were adequate for that use.
The council argued there was “a matter of principle at stake” and students “shouldn’t have to accept a lower standard of living in the case of smaller bedrooms”.
The court heard at Rothesay Avenue the front attic room has a total floor area of 9.75 square metres but, due to the sloping ceiling, only 5.89 square metres has a floor to ceiling height of 1.53 metres or more.
The front attic room at Bute Avenue has a floor area of approximately 11 square metres of which only 6.89 square metres has a floor to ceiling height of 1.53 metres or more.
The council also said on October 1, new national regulation came into force meaning one of these bedrooms is now too small for occupation and changes will need to be made.
Councillor Linda Woodings, portfolio holder for housing and planning at Nottingham City Council, said: “We believe as a matter of principle and fairness that there should be a minimum acceptable bedroom size that applies to everyone.
“We were therefore disappointed with the Supreme Court ruling because in effect, it means one group of people are being forced to accept a lower standard of accommodation than others.
“There is a real concern that this could be the thin end of the wedge and that the same interpretation could be applied to other minimum standards for HMOs such as the number and size of bathroom or kitchen facilities.
“The Supreme Court ruling is based on the law as it stands but the Government supported the council’s appeal so we hope it will seriously consider revising the existing legislation to end this unfair anomaly.
“We felt strongly that there was a significant issue of unfairness at stake, which meant that tenants living in shared accommodation were at risk of suffering poorer quality housing than someone living in exactly the same house but on a separate tenancy.
“We aim to achieve quality housing for all, not just some, which is why we were prepared to take this case through the courts and had support from Government on our position, so it’s disappointing the Supreme Court ruled as it did.”
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