Coventry make tenants homeless with new licensing scheme

by Property 118

8:52 AM, 17th April 2020
About 5 months ago

Coventry make tenants homeless with new licensing scheme

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Coventry make tenants homeless with new licensing scheme

A ‘be careful what you wish for’ consequence of the new licensing scheme which has been introduced by Coventry City Council commencing May 4th – against government guidance – has already started a cascade of tenants being served eviction notices as a direct result.

These poor tenants hit the Coventry news today because they were understandably horrified to receive notice that they are going to be evicted – as reported in CoventryLive today (1) :

Megan Whitehouse, partner Edward Woodrough, 26, and friend 22-year-old Bradley Baker were told on Tuesday that they must leave their Walsgrave home by August 1.

Lettings agency Red Brick has said they will be served a section 21 6A notice on May 1, which requires possession of the property to the landlord within three months.

Ms Whitehouse said she has been told the decision has been made in response to legislation on houses in multiple occupation due to come into force in Coventry on May 4.

“This is not just a local phenomenon,” said Phil Turtle, compliance consultant with Landlord Licensing and Defence, “the same “Additional Licensing Scheme’ has been introduced by dozens of Councils largely hiding behind the veneer of ‘this is to improve housing conditions’ Whereas in fact, the true reason for most of these licensing schemes is Councils’ greed for licence-fees and the immeasurable power it gives them to impose monumental fines on landlords. Our barrister regularly hears Council Housing Officers boasting to each other that this is one of their best revenue streams.”

We spoke to Patrick Sullivan the managing director of Coventry ARLA-qualified lettings agency Red Brick to understand why the tenants had been given notice.

Sullivan explained, “This property was originally let to two friends who were sharers on a single tenancy. That made it a normal single-let property for which the requirements on fire precautions, fire alarms and other safety aspects are the same as normal owner-occupied houses and flats.

“When one of the lads wanted his girlfriend to move in that was agreed by the tenants – but the fact is that, as soon as you get three sharers in a flat or house (who are not all related as one family), the law says that is now a House in Multiple Occupation (HMO). Which most landlords and sadly many letting agents don’t understand.

“The introduction of an Additional Licensing Scheme in Coventry means that every such landlord now needs to pay the council from £640 to over £1200 to have an HMO Licence, yet they are tied into a contract at the market rent for a single-let. This will cost landlords half of their annual income!”

“Possibly thousands of tenants in hundreds of houses will be made homeless in Coventry just as they have been in every area that introduces Additional Licensing”, said Turtle from Landlord Licensing and Defence.

Expanding on the situation Turtle points out: “Contrary to the normal picture of greedy millionaire rogue-landlords that Councils like to put about, Government published research(2) show that 3.9million of England’s 4.6million private rental properties are owned by landlords with just 1-4 properties. Landlords who are mostly normal decent people trying to invest for their future or pension and most of whom care deeply for their tenants. (There are a few bad small-landlords and they deserve prosecution of course.)

“These are the soft-targets that Councils are targeting and not the Rogues. Because targeting the Rogues is too much like hard work and Rogue-Landlords are hardened criminals and can be very scary. So, instead Councils are targeting the well-meaning and on average pretty decent landlords with ‘wealth profiling’, dawn-raids and even dressing up to look like police and threatening tenants with prison if they don’t let them in!

“The Councils then set about methodically milking these landlords for licence fees and insidious civil penalty fines. And they are regularly hitting these good citizens with fines of £25-£60,000 then declaring them ‘not fit and proper landlords’ destroying their business and often their lives completely.

“What’s even more frightening”, says Turtle, “in these licences, power-crazed housing officers have been given the ability to create hundreds of New Crimes.

“You see, they can put almost anything they like into the conditions of an HMO or selective licence (and we see many barmy licence conditions, like insisting the landlord complies for 5 years with out of date regulations or standards, and also what I would call entrapment; by insisting the landlord complies with a web-link document that the Council can and does change at any time without telling the landlord.”

“And then, if a landlord doesn’t fully comply with that condition (no matter how barmy or unreasonable) the landlord finds him or herself on a Criminal Charge of “failing to comply with a licence condition” and the Council then tears them apart for fines of usually at least £12,000.

Returning to the new situation in Coventry, Patrick Sullivan of Red Brick Lettings said, “Although hundreds of normal rental houses and flats are affected by this new licensing scheme there is also likely to be a massive knock-on effect on for student housing. Hundreds of four-student shared houses will now need to be licensed – but instead, many landlords are going to decide they don’t want to pay the exorbitant licensing fees and put themselves at such great risk of prosecution and fines, that they will pull out of student accommodation altogether and only rent their properties to families.”

Some might say cynically, Coventry has introduced this scheme in May knowing that most student landlords cannot pull out of student HMO lettings until July, when the students go home – and so the landlords will have to pay-up £1000 or more to apply for licenses anyway.

What the Council will fail to tell landlords is that they are entitled to apply for Temporary Exemption from licensing for up to three months if they plan to make the property into a family home at the end of the tenancy. Landlords who want to do this can complete the contact form at lldl.co.uk/contact for help obtaining temporary exemption.

“Finally”, said Turtle, “Landlords need to understand that Councils are no longer their friends. They are now your prosecutors – so think of them more like the police. If you get any letter from them we strongly recommend not talk to them without professional representation as they will take any your conversation as gathering evidence to prosecute you.

Housing departments are under resourced and revenue-hungry. As one Environmental Housing Officer told me recently; “we only have enough resources to do pure enforcement and we need to do that to make revenue!”

(1) Coventry Live article Click here

 

(2) Government Research Click here

 


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Comments

Mick Roberts

9:52 AM, 17th April 2020
About 5 months ago

Nottingham Selective Licensing Landlord forum a few months ago, the Councillor said she has received 20,000 applications & had served 200 improvement notices on houses.
That in my book is awful odds. Fine/charge/Tax 20,000 tenants (through rent increases) & Landlords, to get just 200? So 19,800 have paid through the nose & their lives got much worse? This is not the way to make peoples homes better. 19,800 have got worse.

silversurfer2017

11:03 AM, 17th April 2020
About 5 months ago

I am selling most of my properties apart from two. One is a holiday let and the other is a company let. I would rather take my chances by increasing my stock market investments whose rules I fully understand and very unlikely to change. 3 or 4% tax free will suit me fine, with a possibility, not a certainty, of tax free capital gains.

Carol

11:11 AM, 17th April 2020
About 5 months ago

We plan on selling our properties too at the earliest opportunity. However, with so little notice from Coventry CC on introducing licencing for all HMO's we are in a trap of either paying the licencing fee or fees on our fixed rate mortgage. We cannot sell before 4th May now with the restrictions due to Coronavirus.

David

11:43 AM, 17th April 2020
About 5 months ago

This pretence to root out rogue landlords is one of the biggest scams ever .Of course these local councils dont give a damn about the tenants they claim to be protecting but just see this as a lucrative scheme so they can continue to pay their chief exec an obscenely high salary etc. Again this government has failed miserably by not stamping this out. This is more akin to some 3rd world corrupt country.

Matarredonda

12:13 PM, 17th April 2020
About 5 months ago

Prior to the election in December many suggested the Conservatives were the best bet for landlords which I disputed then and still do.
Conservative Government created the large letting needs by selling council owned properties and now since 2010 have lef the 'milking' of landlords either directly or indirectly by various measures ranging for allowing Councils to charge Council Tax on an empty property to the Licensing scheme of the sort talked about here.
Government have taxed landlords unfairly I would submit by many ways such as withdrawing the ability to set mortgage interest costs against income.
At the same time they expect rents to remain unchanged even though costs of renting has esculated.
At the same time landlords with properties in a complex are being hit by ever esculating management fees.
Get it into our heads Conservative Governments are not our friends any more than Labour are.

Chris wood

12:41 PM, 17th April 2020
About 5 months ago

As a landlord of a property in Coventry I was aware of the councils plans to bring the HMO licensing info effect. I was not happy with it becuase I see it as just another way of leaching money from Landlords.
However, I was due to attend a course in Coventry explaining more about HMO licensing to the many, like myself who have no experience. Because of the coronovirus the course was cancelled. So I am still pretty ignorant of what I need to do.
Yet the council have decided to proceed with the licensing scheme despite there will be little support. Not even a reasonable postponment of the scheme. I think this is disgusting way to treat landlords - If I put a step wrong because I cannot get any advice I may be subject to fines.

Chris Wood.

Carol

14:18 PM, 17th April 2020
About 5 months ago

The government have implemented all of the legislation hits on LL's and approved Coventry CC additional licencing scheme. Both parties are oblivious to the impacts on LL's and ultimately tenants.

However, if I take on a tenant that subsequently causes ASB (despite all of the reference checks) then the problem is the LL's. If reported to the Council, I am sure that the house will be subject to scrutiny by the Council looking for anything to apply a fine to.

No longer believe that the law protects innocent people trying to stay on the right side of the law.

When I sell up, there will be 25 people looking for a home.

jonr

10:53 AM, 18th April 2020
About 5 months ago

Having been hit by the Nottingham nightmare scheme I pulled all investment out of the Coventry area once the consultation was announced (sales completed by Dec 19) as the change in the attitude of the council was the writing on the wall for me. Unsurprisingly I have no plans to invest there again...

Peter G

17:52 PM, 24th April 2020
About 5 months ago

The Councils are very short sighted and don't think things through as the Council will have to find new housing for the tenants if Landlords sell up their properties.


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