Alternatives to Landlord Licencing Schemes

by Mark Alexander

11:45 AM, 12th August 2013
About 6 years ago

Alternatives to Landlord Licencing Schemes

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Alternatives to Landlord Licencing Schemes

The alternatives to Landlord Licensing Schemes require joined up thinking, changes to data sharing protocols within local authorities and revised high level directives and strategies which must begin at Government level. 

Perhaps the first question to ask is what is Landlord Licensing all about? Is it really about raising standards or is it more to do with raising funds?Alternatives to Landlord Licencing Schemes

Funding

If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enforce this (howsoever that might be done) whether the money is raised at a local level or centrally.

It is both unacceptable and wholly undemocratic that landlords should be singled out by Government, Councils and Local Authorities to pay stealth taxes badged as licensing fees on the pretence that the money will be used to fund enforcement related initiatives.

Costs associated with licensing schemes imposed on landlords are funded through increased rents. Neither landlords nor tenants want this, particularly as there is clear evidence (demonstrated in this article) that landlord licensing schemes have proven not to be an effective solution to problems in the Private Rented Sector.

Recycling of Court awarded penalties

The high costs associated with prosecuting criminal landlords is borne by Local Authorities, however, fines and penalties go to the treasury. If these funds were to be redirected to the prosecuting authorities this would assist funding of additional prosecutions and create incentives to bring more criminal landlords to task.

Improvements to PRS housing standards for benefits claimants

Our suggestion is that Local Authorities should check to ensure they only pay housing benefits to fit and proper landlords who provide decent accommodation. That would be what any responsible parent would do if paying for their offspring’s accommodation. In this case, the state is effectively in loco parentis. It is proposed that payment of Housing Benefits to landlords are suspended following unsatisfactory checks until such time as properties are brought up to acceptable standards. The proposed quid pro quo to landlords is direct payment of rent before the benefits cap is applied. The logic for direct payment of rent to landlords being the first payment is that shelter is one of the most basic requirements for human existence and should, therefore, be the first welfare benefit to be paid, not the last as it is now. Clearly this impacts significantly on the Universal credit proposals which have been widely contested by the PRS and Housing Charities alike.

The above would require inspections prior to new housing benefits being granted. This would also enable phasing in as opposed to having to asses every property within a defined timescale.

The enforcement teams currently in place within the public sector to tackle problems in the PRS are:-

  • Environmental Heath Officers for property conditions,
  • Planning Enforcement – for unauthorised conversions which seriously brings down standards across the board.
  • Tenancy Relations Officers for harassment and illegal eviction
  • Benefit Fraud to tackle widespread scamming
  • Trading Standards for sharp practices amongst agents
  • Anti social behaviour teams

Outside of the council are:-

  • EDF revenue to tackle cannabis factories and theft of electricity
  • British Gas revenue for theft of supply.
  • Police Community support officers and the Police.

Put them all together and you have quite an army. This is what a visiting team would need to do.

  • Visit the property and check for breaches of HHSRS.
  • Check gas safe certificates
  • Phone the planning team if it’s a conversion to ascertain that all has been done with permission. (3 minutes)
  • Land reg check to ensure the person you are dealing with is actually the owner (£3 and 2 minutes)
  • Experian check for the same reasons as above (£6.99 10 seconds)
  • Council tax check for any outstanding bills and history of use (5 minutes)
  • Check past Housing Benefit claimants which cross references info you have about landlord (5 minutes)
  • Call to EDF and British Gas to make sure all utilities are above board. (5 minutes & free)
  • Run companies search to check solvency. (Free or just £2 for a director check)
  • If landlord is not resident in UK check NRA certificate. (free)
  • Run landlord or company name through Google (You’d be amazed what comes up sometimes & free)
  • Call Environmental Health Officer to see if they have any dealings in the past with the property or the landlord/agent. (2 minutes & free)

The problem is that it is only in sporadic circumstances that any of these teams and organisations talk to each other on an unofficial basis. Often they have different computer databases, so a person might be receiving a grant from one council team while another team is prosecuting them for fraud or failing to pay council tax. Councils do work in this way in other circumstances. MAPPA panels made up of homelessness workers, social workers, Police, probation officers, etc have been common place for years tackling those who are a danger to the community.

Tax Breaks for Landlords

Well thought out tax breaks could encourage private rented sector landlords to increase availability of quality housing which is let to recipients of benefits, thus increasing competition and driving out the racketeers who rely on intense demand  in this segment of the private rented sector.

Fair and reasonable HMO licensing in Birmingham

Reasonable progress has been made in Birmingham to bring about a major change in the structure of their HMO licence fees. In a nutshell good landlords, who have become accredited through an education based scheme, are given a big discount on their licence fee. Good landlords who are members of recognised landlords associations are given a further discount. This has reduced the licence fee from £1,150 to £850 but is still questionable. The cost of these discounts is being recovered by charging the bad landlords. When the Local Authority has to trace and chase a landlord and force him to licence he will be charged the full amount without discounts, regardless of accreditation or landlords association membership and a one year licence is granted. At the end of the year the landlord has to pay the full fee again and is then granted a normal five year licence. This proposal was made by National Landlords Association and Birmingham City Council accepted the model on the basis that bad landlords who increase their enforcement costs  should pay, not as happens in other areas. The same structure applies to the licence renewal.

Whilst we support the basic principals used in Birmingham we must point out that we do not support Additional Licencing and/or Selective Licencing. The requirement for compulsory licencing of any type of HMO is questionable based on our first set of suggestions.

Failed or failing Landlord Licensing Schemes

Landlord Licensing in Scotland has been in place for 7 years, Housing Charity Shelter said “We conclude that landlord registration is not yet fulfilling the expectations placed upon it; indeed, that it may not be able to do so.” in this report.

The Salford Landlord Licensing scheme was a failure admitted by the Local Authority but there are plans to extend it. Isn’t doing the same thing and expecting different results supposed to be a sign of madness? See this report.

The Oxford scheme has become a bit of a joke, check out this thread based on a freedom of information request to Oxford County Council.

Sources of information and how you can make a difference

Sources of information are linked.

This article has been compiled from a long discussion here on Property118.

If your local authority intends to introduce a new form of licensing these suggestions will give you options to propose alternative solutions. You may obtain a copy of this document as a PDF to present to your local MP and/or to submit in response to public consultations by completing the form below.

Why not write to your local MP (Member of Parliament) about this and ask him/her to raise the matter in the Houses of Parliament and with his/her Local Authorities?

If you do not have the contact details of your local MP, please see >>> http://findyourmp.parliament.uk/

Remember, increased licensing results in increased rents. Together we can make a difference.

Landlords and tenants combined = over 5 million votes!



Comments

Neil Patterson

12:13 PM, 12th August 2013
About 6 years ago

I have a simple one:

What about Tax breaks to anyone who provides Council approved social housing?

The country pays as a whole for its Social responsibility and the burden/cost on Councils is decreased.

Ben Reeve-Lewis

13:55 PM, 12th August 2013
About 6 years ago

Firstly Mark I have to say I don’t agree about decent landlords being charged. I pay council tax, often for services I don’t use, and income tax for things I either don’t use or don’t agree with but it’s part of being a member of society.

Fines going to councils? Oh yes please. But there is a better way. Council taking out civil prosecutions on behalf of tenants. You use any money earned to rehouse the tenant and can even do it on a now win no fee basis, making an income for the council to pay for the relevant officers. At the moment I do it for free, which makes no sense.

Criminal courts don’t provide any back-up for serious cases and they take an absolute age to go through. Plus, criminal prosecution require a criminal standard of evidence, beyond all reasonable doubt, whereas in civil courts it is merely the balance of probablilities.

A civil court will often award £10,000 - £30,000 damages for illegal eviction and harassment while the same offences in the criminal court amount to a few hundred pounds fine and community service. Waste of time.

Surprisingly and not a little, frustratingly, most of this can be achieved by councils thinking differently about how they approach this. All of us enforcement officers know our usual suspects and their properties. If we could form multi-agency hit squads to target them and take them out it could be done. All that takes is political and organisational will within the council itself.

The only legislative change needed would be your proposal to change the housing benefit rules on who to pay. At the moment they cant cherry pick in the manner you suggest, that would need a law change.

Mark Alexander

14:13 PM, 12th August 2013
About 6 years ago

Reply to the comment left by "Ben Reeve-Lewis" at "12/08/2013 - 13:55":

I would happily support your ideas in respect of Civil Prosecutions, that makes sense.

In response to your first point I think we are both saying the same thing.

You said "Firstly Mark I have to say I don’t agree about decent landlords being charged. I pay council tax, often for services I don’t use, and income tax for things I either don’t use or don’t agree with but it’s part of being a member of society."

Well I pay Council Tax for things I don't use either. In fact, I pay more Council Tax than most but I don't have any street lights, I sent my daughter to a private school and I pay for private heath care. I don't have a problem with that, probably because it's been that way for a very long time. The point, however, is this; why shouldn't the cost of raising housing conditions be factored into Council tax too? The words in the article are "If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enable this (howsoever that might be done) whether the money is raised at a local level or centrally."
.

Ben Reeve-Lewis

14:34 PM, 12th August 2013
About 6 years ago

Good and interesting points as ever. My point on council tax not being used to raise property conditions is why should the public be expected to pay for something that should be a given? and which lines the pockets of private individuals?

You are yourself proposing that a landlord shouldnt be allowed to let if his properties fall short of acceptable standards. Well surely landlords need to be aware, and this is part of your proposal, that before they can market a property it must be up to snuff and their understanding and business model also needs to withstand at least basic scrutiny. Why should the public be expected to foot THAT bill?

Paying for enforcement? Yeah absolutely, thats a public service, but lets not debate over a side issue here. I sense a solution in the offing with this thread and can see how I could promote this in my own council.

Ben Reeve-Lewis

14:35 PM, 12th August 2013
About 6 years ago

Oh and if anyone is wondering why I am spending so much 9-5 time posting and not getting on with the work that your council tax pays me for,.....I have a few days off haha

Mark Alexander

14:41 PM, 12th August 2013
About 6 years ago

Reply to the comment left by "Ben Reeve-Lewis" at "12/08/2013 - 14:34":

Ben

I have re-read my words and amended them as i can now see where the confusion came from. The PDF has also been updated.

The previous wording was....

"If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enable this (howsoever that might be done) whether the money is raised at a local level or centrally."

Now updated to read....

"If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enforce this (howsoever that might be done) whether the money is raised at a local level or centrally."

Just one word changed, the word "enable" has been changed to "enforce".
.

Ben Reeve-Lewis

14:43 PM, 12th August 2013
About 6 years ago

Reply to the comment left by "Mark Alexander" at "12/08/2013 - 14:41":

Haha that does make a difference. Remember Mark my qualifications arent actually in housing law but cognitive linguistics, so I read VERY closely

Mark Alexander

14:52 PM, 12th August 2013
About 6 years ago

Reply to the comment left by "Ben Reeve-Lewis" at "12/08/2013 - 14:43":

And as you know Ben, I am also a qualified NLP Master Practitioner.

I still make mistakes though 😉

Thank you for bringing this one to my attention.
.

Neil Patterson

15:03 PM, 12th August 2013
About 6 years ago

Hi Mark and Ben,

I am confused. Is not the problem we need more Good Quality Social Housing which the Government at Local or National level cannot afford.

Should we not just incentivise companies and individuals to increase supply.

Carrot rather than stick and start driving out the numbers of people who are so desperate they have no other option than to rent a unsafe property.

Rather than a license to prove you are not dodgy, what about a certificate to prove you provide a social need and gain benefit from that?

Mark Alexander

15:15 PM, 12th August 2013
About 6 years ago

Reply to the comment left by "Neil Patterson" at "12/08/2013 - 15:03":

Are you suggestion additional tax breaks for providers of safe accommodation Neil?

I like that idea!

As for the need for more Social Housing, I agree with that too. However, that's a very long term fix.
.

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