Further Scrutiny Required for Landlord Registration Scheme

SCSH calls for use of unprecedented parliamentary procedure

The Antisocial Behaviour etc. ( Scotland ) Bill is due to begin stage 3 of the parliamentary process on 17 June 2004 . In Part 8 of the Bill, a registration scheme for all private sector landlords has been developed. The scheme will mean that all private landlords must become registered, otherwise they will be committing an offence. To become registered, a landlord must pass a ‘fit and proper’ person test. The Bill also makes it possible for a local authority to serve a notice for ‘no rent payable’ on a property if the landlord is unregistered.

Dr Andrew Waugh, SCSH Policy Officer comments:

" The Scottish Council for Single Homeless supports the principle of ensuring that all vulnerable tenants should be protected from rogue landlords. However, we are concerned that former tenants of unregistered landlords may become homeless unless a sufficient safety net is written into the registration scheme. SCSH believes that further scrutiny of this Part of the Bill is required. This will ensure that all implications arising from a registration scheme are fully considered and thought through."

SCSH is calling for MSPs to refer Part 8 of the Bill back for further Stage 2 consideration to the Communities Committee, a procedure which has never been used in the Scottish Parliament.

This recommendation is based on the following grounds:

· insufficient consultation has been carried out on this registration scheme,

· a registration scheme has far-reaching and significant implications, including resource implications, for landlords, tenants and local authorities – necessitating the need for a pilot study.

· it is unclear how the registration scheme will overcome difficulties in finding landlords who wish to avoid registration.

· the implementation of the registration scheme may be at loggerheads with tenancy law and could inadvertently increase homelessness.

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SCSH’s Concerns in detail

Insufficient Consultation

Amendments to create a registration scheme for all private landlords were only introduced at stage 2 of the Antisocial Behaviour etc. ( Scotland ) Bill, bypassing the Bill’s main consultation phase. The amendments are complex and have far reaching implications for the private rented sector. Although the Minister undertook to give further consideration to matters raised at stage 2, the consultation period covered just 5 working days, including a bank holiday weekend. SCSH is very concerned that insufficient consultation has been carried out to allow all stakeholders to express their views and think through the full implications of such a scheme.

Strategic Fit with other work of the Scottish Executive

SCSH strongly believes that a registration scheme for private landlords should not be included as part of the Antisocial Behaviour Bill. SCSH believes this creates the impression that the private rented sector and antisocial behaviour are inextricably linked, when clearly this is not the case. SCSH feels that a registration scheme of this nature would fit more naturally within the forthcoming Housing Bill. SCSH is also concerned that the adoption of a mandatory licensing scheme of this nature cuts across the work the Executive is currently doing on the Voluntary Accreditation of landlords.

The registration scheme is also at odds with the work of the Housing Improvement Task Force (HITF), established by the Scottish Executive. The HITF’s approach to private sector registration would give local authorities the power to set up registration schemes subject to Scottish Executive approval being granted, but only once the implications of such schemes had been considered. An amendment which would enable further consultation on the scheme before implementation was voted against at stage 2. SCSH is therefore concerned that a mandatory registration scheme will be introduced, before the necessary research has been carried out into what the implications may be. SCSH believes it is imperative that local pilots are carried out to assess the implications, for example on rent levels, supply and costs of enforcement before the scheme is rolled out nationally.

Operation of the Scheme

As SCSH also stated in our stage 1 evidence to the Communities Committee, lessons learnt from Houses in Multiple Occupation (HMO) licensing have shown that, to date, HMO licensing has only been partially effective with a limited number of landlords coming forward. Reasons for the relatively low uptake have included: "poor promotion; inadequate staffing and financial resources; civic government licensing procedures;…and officer inexperience of HMO licensing together with an unwillingness on the part of some owners to apply." SCSH is unconvinced that the proposed registration scheme takes account of these lessons learnt.

The proposed scheme would appear to very bureaucratic, particularly if the intention of it is to sit alongside the HMO licensing scheme. For HMO landlords, the scheme could introduce double-registration together with associated costs for them, and therefore their tenants too. SCSH believes that if compulsory registration does go ahead, it would be more cost-effective to integrate the two schemes to enable more efficient registration.

SCSH is concerned that, as it is the intention of the scheme to be self-funding, the costs will ultimately be borne by tenants themselves - many of whom are not on housing benefit. There may be little incentive for tenants to make sure their landlord is registered when it could mean rents may have to rise as a consequence (to cover their landlord’s registration fee). The tenants of those (good) landlords who have registered will bear the brunt of costs of finding, and bringing to task, unregistered landlords.

Many local authorities are currently building closer partnerships with private landlords in their areas to develop ways in which the private rented sector can help with the supply of affordable rented accommodation for homeless households. Notices for no rent payable and appeals against these notices are likely to have a severe impact on the regularity of payments of Housing Benefit. Further disruption to Housing Benefit payments are likely to lead to many landlords considering this income stream as unreliable and withdrawing from providing accommodation for such tenants. Unless properly thought through, the registration scheme could cut across the partnership work which local authorities and private landlords are currently engaged in.

The Registration Scheme and Homelessness

SCSH believes it is right that rogue landlords should be prevented from letting out their properties. However, the inevitable consequence of introducing a registration scheme is that former tenants of rogue landlords may need to move. It is important that this transition stage is managed effectively in order to prevent homelessness occurring and protect tenants.

If a landlord is to be removed from the register then tenants need to be informed if they may become homeless. However, the intention of the scheme should be to avoid using the homelessness route as a safety net and legislate for this interim period. If a landlord is about to be refused or removed from the register, this should trigger action from the local authority to prevent the tenants from becoming homeless. The homelessness route should be seen as a last resort, not as the primary safety net for former tenants of unregistered landlords. However, most tenants will have Assured Tenancies and it will be illegal to end their tenancies.

There is a risk that the implementation of the registration scheme may lead to increased homelessness presentations from the private rented sector which may have an impact on local authority homelessness services. Further work needs to be done to ensure that the registration scheme does not lead to increases in homelessness.

The Registration Scheme and Tenancy Law

Even though the landlord has been refused or removed from the register, many tenants would still have a legal right to occupy the property through their lease. The registration scheme as proposed therefore appears to conflict with existing tenancy law in a number of areas. As it would be unlawful for the landlord to let the property if unregistered, how will a removed or refused landlord be able to give tenants their minimum notice period to leave the property? It would be an offence for them to act as a landlord during this period. Some tenancies will be Short Assured Tenancies with a notice period of a minimum of 28 days or two months. A notice to quit with less than the minimum notice period would also be unlawful.

The majority are likely to be (by design or default) an Assured Tenancy under the Housing ( Scotland ) Act 1988, where a specific ground for repossession is needed to end the tenancy. The landlord may therefore be in a position where it is unlawful for them to let the property, but in which they cannot lawfully end the tenancy either.