Councils and rogue landlord provisions
The Housing and Planning Bill has made House of Lords stage and is pretty much a done deal, so I thought it would be a good time to take a race through the main provisions.
The national press tends, quite understandably to focus on the increased right to buy provisions and the equally controversial starter homes initiative. I however, equally understandably am interested in the increased provisions for tackling rogue landlords.
I attended a consultation meeting at the Home Office back in August on this and there have been quite a few changes since that time following the comments made by the attendees from different interest groups.
So what do serial offenders and enforcement officers have to look forward to?
The government have handily provided explanatory notes and an impact assessment.
Banning Orders
Banning orders are first out of the trap. This new provision applies to landlords and letting agents, both as individuals or companies and can result in a landlord being banned from renting property or a letting agent being banned from operating in the lettings industry.
The order would be in place for at least 12 months and breaches of the order would be a prison-worthy offence and a financial penalty of not more than £30,000..
Now the more cynical among you would probably spot numerous get-rounds to this for the seriously committed rogue operator. I am one of the cynical, having seen how prevalent alias’s and fake companies are. but at least the Bill is ahead of the game, Clause 26 dealing with transfers of interests to avoid prosecution. The clause stating, “This is designed to prevent persons from getting around a banning order by transferring their property to family members or to a company that they own.”
Rogue Landlord Database
Sitting alongside the banning order is a rogue landlord database. Again this applies to landlords and letting agents. Anyone finding themselves subject to a banning order would go on it for a period of 2 years.
The government is to develop the database which will then be maintained and populated by local councils. There are, as you would expect appeal processes and strict rules on notice and placing on the list to avoid landlord accidentally ending up on it merely because a fat finger on the computer keyboard.
At the Home Office meeting there was discussion about who would be able to access the database, with Shelter and myself arguing that the public should have access so that tenants could check out a landlord or agent before signing on the dotted, but unsurprisingly they opted to just allow council enforcement officer to have access to it, and even then only for specified purposes, investigating contraventions of the Housing Act 2004 (HMO licensing) and breaches of landlord and tenant law.
Rent Repayment Orders
These are to be widened out beyond rent recovery for unlicensed HMOs to include the following:-
- S6 Criminal law Act 1977 – violence to secure entry
- Protection from Eviction Act 1977 – illegal eviction and harassment
The widening of the offences that an RRO can be used for would encourage even me to be more proactive about Protection from Eviction Act prosecutions, carrying the potential for a far greater penalty than a measly fine and community service as we currently see for harassment and illegal eviction.
What about letting Councils keep the Money?
The thing that will really make the difference is something I cant find anywhere in the explanatory notes (doesn’t mean it isn’t in there) but it is the proposal that was the big hot topic back in August of allowing councils to keep all penalties levied without sending most back to government.
Much is made of licensing schemes as cash cows for councils but in fact you can’t use money raised from licensing to do anything other than run the licensing scheme. You can’t use it for enforcement and this is why so many councils are reluctant to enforce.
They currently have to employ people to do work with nothing coming back the other way. Allowing councils to keep the penalties would allow them to employ people to do the job.
If, as we see with the new banning order breach penalty of £30,000, penalties of this level would be harvested then one penalty would be enough to employ one enforcement officer, with na bit of top up from the authority itself.
Summing up
The devil is in the detail of course and there is a lot more detail in the notes than I have presented with this 100 yard dash version.
In my experience, for every law there is in housing the committed rogue landlord will bust a gut to find a way around it. I sometimes think it is merely on a point of professional pride, but at least it represents a sea change in the attitude of government towards the worst in what has been up to now a pretty thinly regulated industry.
The first thing I shall be looking at when it comes in is how quick local authorities are to see the value in it. As a provider of training on these sorts of things to councils I’m a good barometer. Usually I get requests for training on a law about a year after it has actually gets enacted.
My fears with this one is most councils are so myopically focussed on cuts at the moment that any new initiative coming in is equivalent to grabbing their heads and forcing it in the opposite direction. And it makes your arms ache, trust me.
I don’t understand why an entry on the rogue landlord database is only for 2 years. I would have expected 6 years.
I dont think its going to be as easy as it makes out anyway Ian. A landlord can only go on the list if they have already been done for a housing related offence. The very skilled rogue landlord evades prosecution in a variety of ways and even if you nab them the new law has a range of appeals and notice periods built in in order to escape the database.
My suspicion is that any enforcement officer will be able to look at their list and know that only about 10% of the people they deal with will be on the database.
The bill says that entries must be for no less than 2 years, so we’ll have to see for how long they’ll in fact be and what safeguards there will be in practice to prevent them from being maintained for too long.
For the purpose of such database it seems right that it be only accessible to local authorities for specific purposes.
What rent could be subject to a repayment order with an unlawful eviction?
With an HMO I would presume that the HMO repayment order would be for rent that this particular tenant paid in rent whilst the property was unlicensed.
• With an unlawful eviction the tenant was out after they paid the rent and whilst they were their rent is due and lawful.
• And if you mean that the new tenants rent can be paid to the old tenant this is untenable.
Firstly this would then not be a repayment order but a penalty… as repayment means to the same person.
Additionally, how long would this last for – forever??!!
• And if you mean that the repayment of the rent is to the new tenant – because you evicted the old tenant illegally this also makes no sense…
It is against all present lines of reasoning with repayment orders.
And again, for how long? Nothing will ever change regarding the historic act of illegal eviction so does that mean rent forever has to be repaid??!!
Have I missed the point?
Extracts from the Act
“The amount must relate to rent paid during the period mentioned in the table.
If the order is made on the ground that the landlord has committed
the amount must relate to rent paid by the
tenant in respect of an offence mentioned in row 1 or
2 of the table in section 39(4) the period of 12 months ending with the
date of the offence”
A Protection from Eviction offence is a “row 2” offence. The Tribunal can therefore take into account the rent that was paid in the period of 12 months prior to the incident. It will seem to operate in the same way that a failure to licence RRO works in that an assessment is made by the FTT with an upper limit being the years rent, but that it is not the starting point.
It is a punitive order.
“In determining the amount the tribunal must, in particular, take into account—
(a)the conduct of the landlord,
(b)the financial circumstances of the landlord, and
(c)whether the landlord has at any time been convicted of an offence to
which this Chapter applies.”
A penalty imposed in respect of the criminal proceedings is also taken into account
The Sentencing Council ( who can issue guidelines if they feel it necessary to do so) is currently looking at the various housing offences to attempt to gauge what may be necessary if such guidelines were issued. They are not yet at the position of saying that guidelines are needed although the Assoc of Tenancy Relations Officers has made representations to them about the variance in the range of penalties imposed by the courts. Some impose custodial penalties, yet in similar circumstances other courts might impose £200-£300 plus costs