Renters’ Rights Bill hands more power and money to councils through tougher enforcement

The only people to benefit from the Renters’ Rights Bill will be councils, claims a legal expert.

In an exclusive video interview with Property118, legal expert Des Taylor from Landlord Licensing & Defence warns landlords of the consequences of the new rules and regulations, and why it may be time for some landlords to leave the market.

Des also warns of the horror stories of council enforcement against landlords, where one landlord faced an overwhelming legal battle with the council.

Watch the video interview below

Renters’ Rights Bill will benefit councils

Des explains the Renters’ Rights Bill aims to roll all existing legislation into one piece, making it easier for councils to enforce rules.

Des tells Property118: “In the last ten years, there have been 540 new pieces of legislation and regulations brought into the system, which equates to more than one a week.

“The Renters’ Rights Bill consolidates that existing legislation, rolling it all into one to make enforcement simpler.

“At the end of the day, everything that is happening in the Renters’ Rights Bill appears to benefit one particular type of organisation: councils.

“Be it more money from fines or enforcement, whether that’s because housing lists are going to stop growing because of the abolition of Section 21, it all appears to work in their favour.”

Des warns that the private rented sector will become more professionalised under the Renters’ Rights Bill, and landlords need to be prepared to adapt.

He adds: “Lots of people need to understand that, going forward, the system is going to be more professional, with more barriers to entry, and you’ve got to learn how it works.”

More councils enforce the more money they get

Des explains the reason councils issue fines is simple: “It’s to make people understand that they can’t do this, and it’s a deterrent.”

He says councils are fining landlords because they can, and because it’s far easier than taking them to court.

“It’s like a drug,” Des says. “The more they enforce, the more money they get, and they use that money for more enforcement.”

Des explains fines are supposed to be ringfenced and councils must use that money for enforcement, not anything else. However, rumours abound that council accountants are very good at hiding the diversion of funds to other council budgets.

However, Des says council fines against landlords are not working as they should.

He explains: “What I see is, are the really bad landlords getting caught? I don’t think so, and not on a regular basis.

“But if you don’t have a licence and you’re in a London borough, you’re looking at a fine that could be between £3,000 and £17,000. And if you’ve got a big portfolio, it could be as much as £20,000.”

Des also warns that fines can have a big impact.

He says: “If you’re taking money out of the pocket of a landlord that needs to be invested into the property, that’s going to be detrimental.

“Do the fines have to take into account the financial status and financial situation of the landlord? In theory, yes, they do. But does every landlord supply their information for that to happen? No.”

He adds: “In the future, we’ll see these fines increase to £40,000, and there’ll be a whole bunch of offences, ones that currently would go through the Magistrates’ Court, that will come under the Renters’ Rights Bill. That will make it easier for councils to issue fines, and they get to keep the money.”

Councils don’t follow their own policy

Des says he’s dealt with thousands of cases where councils fail to follow their own procedures.

He explains: “What councils do very well is, they don’t follow their own policy. The law says they have to, but they don’t.”

One of the most common issues Des sees is councils inflating fines beyond what their own guidelines allow.

He says: “If a fine should be £12,000, they might over-assess it based on things like harm and culpability and push it up to £22,000.”

In one case Des dealt with, a landlord was fined £12,000 for not having a valid Electrical Installation Condition Report (EICR), a certificate that confirms the safety of a property’s electrical installation after it has been inspected and tested by a qualified electrician.

But when Des reviewed the council’s own policy on how the fine should be calculated, it told a different story.

He explains: “When I followed the council’s policy and saw what they were supposed to do, with mitigation plus all the bits and pieces, this fine, if properly calculated, should have been £3,000 and at the most £5,000.”

How was Landlord Licensing & Defence founded?

Des explains that he had experience in the legal field and had worked in the corporate world before realising this was the right fit, as he was already helping people with property-related issues.

He says: “It all started with legislation changes in 2015. We saw the promotion of rent-to-rent and HMOs, and then the Housing and Planning Act 2016 was coming into law as well.

“We realised we were already helping people who were having problems and facing enforcement over small issues, but the Housing and Planning Act introduced financial penalties of up to £30,000. We saw that more fines and stronger enforcement were coming, along with rent repayment orders.

“My business partner, Phil Turtle, and I decided it was important to formalise how we defend people and to help guide and train them through the process.”

Since then, Landlord Licensing & Defence has gone on to help thousands of landlords and letting agents avoid enforcement action or defend them against excessively heavy financial penalties.

Des explains: “A lot of people still don’t realise this is a very specialist area of law. Your usual eviction company, or a standard landlord and tenant solicitor, this isn’t typically what they deal with and they rarely get it right.”

House smashed with holes in the wall

Des says one of the worst cases of council excess he’s dealt with involved a landlord and letting agent who let a property to a couple.

After a breakup, one tenant left, and the remaining tenant descended into mental health and addiction issues.  The landlord and agent couldn’t access the property, even to carry out a Gas Safety certificate.

Des explains: “The property was being used as a place for criminal activities and the letting agent and landlord could not get access to the property because they needed to do the Gas Safety certificate.

“They could see there was something wrong with the property, so they repeatedly asked the tenant for access. In the end, they went to the council and said they couldn’t get in.”

However, Des explains the council’s job is NOT to enforce Gas Safety certificates as it belongs to the Health and Safety Executive.

He says: “However, although the landlord and letting agent went to the council for help and said they can’t get access, and because the property was licensed and the mandatory licence conditions say you have to get a Gas Safety certificate annually, rather than help the landlord, the council stepped in to issue fines!

“The Health and Safety Executive don’t enforce this, but the council is able to enforce it through licensing and the council eventually got access for the landlord and letting agent. Helping, you might think but this was not the case”

Des continues when a member of the council accompanied them to the property, the property was in complete disrepair.

He says: “The gentleman who was living at the property had smashed the house up with holes in the wall, bashed up door hinges the place was in complete disrepair.

“One of the licence conditions is to keep the property in good repair at all times. It’s pretty hard to do that, especially if the landlord and letting agent couldn’t get access.”

Civil penalties deny landlords the right to a fair trial

After finally gaining access to the property, the landlord did everything possible to put things right.

Des explains: “The landlord had paid for everything to be done up and sorted and took pictures as evidence, however the council came again, and the tenant had smashed it up again.

“The tenant even wrote statements saying he had done this, the landlord and letting agent are not responsible.

In the end, the agent worked with the council to secure a closure order and shut the property down, but Des says this is where things started to go wrong.

He explains: “The council then used the closure order to justify massive financial penalties against the landlord and letting agent.

“Even though they’d made no money from the property for years, and the agent’s monthly fee was just £47.16 pence”

The landlords appealed to the Tribunal, but the paperwork showed the council had twisted the facts, even though the landlord had tried to put everything right and the tenant admitted to the damage.

Des explains that at this point, the landlord simply gave up.

He says: “The mental toll was awful. Even though we helped cut the fines down, the legal costs would’ve been four times higher than the fine just to prove the council wrong.”

Des believes civil penalties deny landlords the right to a fair trial.

He explains: “This is one of those situations where, if the council had prosecuted through the Magistrates’ Court, the landlord and agent could have pleaded not guilty and been tried by their peers. Any jury would have seen the full context and said, ‘No one deserves this.’

“But that’s what civil penalties are doing, removing the right to be tried fairly. Even with a motoring offence, you have the right to go to court. That right goes all the way back to the Magna Carta over 800 years ago. Yet in property, it’s being quietly taken away. You can’t ask to go to court, only the council can choose whether to issue a civil penalty or take the landlord to court, and most councils choose civil penalties because they get to keep the money.”

He adds: “The biggest issue I see is that a lot of people talking about enforcement have never actually dealt with it. I deal with it every day. I see the arrogance, the patterns, the training courses, and quite frankly, it’s a horror story most of the time.”

Councils have the right to introduce licensing

Des explains that when it comes to selective licensing, councils aren’t technically abusing their power: “Because you can’t abuse something you’ve been given the right to do.”

Des points to legislation introduced by the government just before Christmas last year, which means all councils can now introduce selective licensing schemes of any size without needing approval from the Secretary of State.

Des says: “This is really important. If you look at places like Liverpool, they went for a city-wide licensing scheme and the Secretary of State said no, you can’t have it a second time.”

In 2020, the government rejected Liverpool City Council’s plans to renew a city-wide selective licensing scheme for private rented homes. The council did introduce a new licensing scheme in 2022, but it only covers 16 wards in Liverpool, not the whole area. However, the council are still demanding compliance.

Des explains: “We defended a case involving a rent repayment order where the council had written to properties saying they needed a licence, when they didn’t – because the licensing scheme didn’t cover that area.

Yet the landlord still had to defend against a vexatious tenant who wanted to pursue it anyway, just because they’d received a letter – even though the letter was wrong.”

Selective licensing schemes don’t work

Des explains he hasn’t seen any selective licensing schemes work across the country and cause unintended consequences.

He says: “I don’t think councils realise the consequences of licensing schemes. Many of the people making the decisions for these schemes are delusional about how life really works.”

Des points to Leeds City Council as an example, which is now proposing more selective licensing schemes, particularly in boroughs with poorer tenants.

He explains: “Who is this selective licensing scheme really going to benefit apart from the council? It’s going to generate more revenue for them, it’s going to impose more costs on landlords, and if costs go up, rents will go up.

“As someone rightly pointed out during a council meeting, you’re putting the burden directly onto the poorest people in your area and justifying it through licensing.”

Councils have extensive powers to gather information on landlords

Des explains that councils already have extensive powers to gather information on tenants and landlords.

Des explains: “There are lots of things a council can do where they don’t have to comply with data protection in the way you might think. If a council suspects a crime in a property, like not having a licence, they can carry out credit checks on all the people in the property without anyone’s permission. That way, they can gather evidence landlords wouldn’t even think of.”

Under the Renters’ Rights Bill, all landlords will be required to register with the landlord database.

Des says in practice, the landlord database should be a good thing, but it won’t necessarily solve problems.

He explains: “The purpose of the database is essentially like registering cars or driving licences. In some ways, I think it’s a good thing. But will landlords be comfortable with it? I’m not sure, it depends on how the data is going to be shared, and what exactly is being shared.

“The database is being outsourced to a big software company, and I’m sure there will be mistakes. But will it work? Yes. Will it solve problems? Probably not. What it will do is consolidate everything in one place, showing whether the property has the right certification, and whether the landlord has any prosecutions. If it’s put together properly, it could be a good thing.

“However, not every landlord wants every tenant to know where they live, and how much data is going to be exposed is the key question.”

Future of the private rented sector

Des warns more landlords will leave the market, frightened by the new rules and regulations.

He says: “What’s happening now is they are bringing in rules and regulations that already exist but combining them together, making it easier for them to enforce which normally they would have taken to the Magistrates’ court – now they can just issue fines.

“That’s going to scare people away.”

However, he believes this change could present a big opportunity if landlords get it right.

Des explains: “I think more people are looking to leave the sector rather than invest. If you were trying to fill Wembley Stadium today and it was full, and people were leaving, but you had the chance to convince some of those leaving to give you their ticket to get in, that you could resell, you’d definitely be thinking opportunity, opportunity, opportunity.

“As more people leave, there’s less competition, so it’s a massive opportunity. But you have to get things together right, like your business plan, how to finance it, have a contingency plan, build a good team, and know how to manage it all together.”

Des warns that with these new rules and regulations, landlords will need to professionalise.

He says: “If you don’t know how to do all of those things yourself, you’ve got to get people who do. You need to be prepared to spend more money, take less margin, and be in it for the long term.”

For more help and advice on what Landlord Licensing & Defence can do for you, contact them on 0208 088 8393 or use this link