'REVIEW OF PROPERTY CONDITIONS IN THE PRIVATE RENTED SECTOR
Response of the Nottingham Action Group on HMOs (NAG) to the Department of Communities & Local Government Discussion Paper
The Nottingham Action Group on HMOs (NAG) is a community-based organisation, formally constituted in February 2004, which is managed by members, all of whom are volunteers. The NAG membership is a network of individuals, many of whom are in their own right also members of residents’ associations and community groups in different neighbourhoods. Most of these are located in the City of Nottingham and are typified by the fact that HMOs have impacted disproportionately on the environmental and amenity value, and on the balance of those neighbourhoods.
The NAG’s work around the impact of HMOs has given its membership a much deeper level of insight into the private rented sector in general, into the role it plays in providing accommodation for many people, and into the problems that can be associated with it. it is this insight which has helped to inform our response to CLG’s discussion paper: ‘Review of Property Conditions in the Private Rented Sector’.
We begin this response with some general comments.
A key characteristic of the sector is (for want of a better word to describe it) its ‘amateurism’. This is not intended to be a derogatory description of the private rented sector (PRS), but merely a means of indicating that private landlords very often own property as an investment rather than as their main source of income. In other words, something they do in addition to their primary work or business function, i.e. in their ‘spare time. Unfortunately, this frequently seems to mean that their knowledge of pertinent regulations and laws, as well as their understanding of their obligations as landlords are not all they should be. Furthermore, many do not seem to have the time needed to acquire such knowledge and understanding. Also, whilst there are indeed active and professional bodies representing landlords, most of the privately rented properties we are aware of in our communities are owned and rented out by people who do not appear to have any connection with those bodies and, therefore, to the information and advice about what is needed to manage a rented property properly (and legally) which these bodies have. It may well be that this is the prime reason why good practice does not easily spread across the PRS and, therefore, why Government needs to find ways of addressing the issue if the problems that come about in the area are to be tackled and substantially reduced.
This aspect of the PRS needs to be separated from the matter of ‘rogue’ (‘feral’) landlords who, as Government points out, are a small, but nevertheless important, minority. Rogue/feral landlords actively seek to circumvent the requirements placed upon them by housing regulations and laws, and make the lives of their tenants difficult and unpleasant. Sadly, in these cases, when the tenants finally leave, or are harassed out of their homes, the cycle of exploitation begins again. Clearly, under these circumstances, serious and punitive action is necessary, albeit that it is targeted at a minority of owners.
However, we must reiterate, that by far the majority of problems experienced by tenants and neighbours do not come about as a result of the activities of rogue/feral landlords. Rather, they come about as a result of ‘amateurism’ on the part of landlords: the lack of competence and/or lack of time to manage and maintain properties, and an unwillingness (or inability) to seek out others to do the task properly for them.
It is our belief that Government and Local Authorities (LAs) need to put in place a regime which means that it is simpler and cheaper for landlords and property managing agents to comply with the law and meet minimum decent standards of maintenance, repair and management than it is to avoid doing so, and for penalties to be imposed on them if they do not. At the moment it all too often seems to be that enforcement is limited, or comes as part of the work of over-stretched LA budgets, and that sanctions levied for breaches simply do not provide a strong enough incentive for many property owners to ‘get their act together’. For example, fines often seem very low when compared to the rental incomes from properties, especially those in high demand areas. If Government is to achieve the outcomes it is seeking, this situation needs to change.
We now move on to our comments relating to the specific questions posed in the discussion paper.
Section 1: Rights & Responsibilities of Tenants & Landlords – Property Conditions
Question 1: In addition to the production of the Tenant’s Charter, is there any further action that could be taken to raise awareness amongst tenants and landlords of their rights and responsibilities? Who needs to take this action? Landlords and tenants are both drawn from a wide cross-section of the population. As a result of the Census, Government knows the location of privately rented properties and the volumes present. However, no-one really knows where private landlords themselves reside, even though the tax records of those who declare rental income must indicate this. As a consequence, a generalised, broad approach to advertising and communicating the relevant requirements common to all the PRS in the country is needed. On-going TV and other forms of advertising/marketing communication could be used alongside the use of other media outlets, e.g. press, radio, bill-board advertising. Government already uses this approach in connection with other aspects of public information and with issues like tax return deadlines or benefit fraud, and it is reasonable to suppose that utilising this approach may well be a useful way of directing those with an interest in these matters, i.e. landlords, managing agents and tenants, to suitable web-based or other published detailed information.
Question 2: What is best practice in raising awareness amongst tenants of their right to seek help and advice from their council and how can this be shared between local authorities? It may well be that what is needed is for there to be a legal requirement for rental contracts to contain statements incorporating information for tenants about their right to seek help and advice from their LAs, or for it to be compulsory for such information to be given at the start of the tenancy, or indeed both.
With regard to the role of LAs, it is vital that this function is properly resourced, and, in addition, that the burden of these resources should not necessarily fall on general taxation. Rather, it should be the PRS which carries the burden, and this is why the fees that can come from licensing have such potential value: they can be used to reduce the burden on the wider tax-paying population.
It is clearly important that good practice is shared amongst LAs. This exchange of information needs to be done through the co-ordinated auspices of those professional bodies which already exist and, if necessary, mechanism needs to be put in place to ensure that it happens.
Question 3: What is best practice in dealing with requests for help and advice from private sector tenants and how can this be shared between local authorities? We preface our response to this question with the caveat that the NAG’s experience is largely with the practices of one LA only (Nottingham City Council) which, bearing in mind the stretched nature of its resources, by and large does appear to provide a reasonable service. However, prosecution of the worst cases is time-consuming and costly, and probably restricts the amount of time available for pro-active work.
It really is important to recognise that, although some efficiency savings could be made by LAs if they worked together across local housing market areas to deliver the consistent service levels that tenants (and landlords) can expect to receive, ultimately adequate resourcing is the key to ensuring that the system works effectively.
Question 4: Should the guidance for landlords be updated and widened to include information for tenants, to help them understand whether a property contains hazards? Most certainly. Additionally, the information needs to be presented in a way that is easy for landlords and tenants to understand, and must be widely publicised in order to help inform not only consumers (tenants), but also providers (landlords), neither of whom may have a proper understanding of their respective responsibilities.
Section 2: Retaliatory Eviction
The NAG’s experience over the 10 years since its formation leads the Group to feel strongly that many tenants, especially young people and other vulnerable groups, who are typically tenants of HMOs, seem reluctant to press their landlords or landlords’ agents to carry out maintenance and repairs, or indeed to seek help from the LA and other bodies so that enforcement action can be taken. Rather than renewing the tenancy, they often just leave the property, which results in the next group of vulnerable people moving in and in the landlord/agent repeating the same cycle of inaction again and again. The result is that more tenants that is either necessary or desirable suffer from the inability or unwillingness of the landlord and/or agent to address issues caused by disrepair, lack of maintenance, and mismanagement. Equally, a constant ‘churn’ of tenants merely increases the impact that a transient population has on the locality in terms of the ability to maintain and sustain a desirable and resilient neighbourhood, making initiatives, like neighbourhood watch, for example, difficult to run and maintain. All of which contributes to a widespread and negative impact on the larger community.
Therefore, whilst appreciating that it is important to avoid ‘spurious or vexatious’ complaints by tenants, the NAG’s primary concern is in how to ensure that tenants are empowered to complain without risking retaliatory action by landlords and/or agents.
Question 5: Do you think restrictions should be introduced on the ability of a landlord to issue or rely on a section 21 possession notice in circumstances where a property is in serious disrepair or needs major improvements? Most certainly they should. The CLG’s document makes a good case for the reasons for this to happen and the examples of precedents are good ones.
Question 6: What would be an appropriate trigger point for introducing such a restriction? A Category 1 Hazard should certainly be an appropriate trigger. However, there is a case to be made that the trigger should be significantly lower.
Question 7: How could we prevent spurious or vexatious complaints? It may be that the introduction of a disputes procedure could go some distance towards solving this issue. In the case of dispute, both parties would be able to produce evidence from, say, a qualified surveyor as to the seriousness of a repair, for example, with the evidence being taken by a panel or a suitably qualified adjudicator.
Section 3: Illegal Eviction
Question 8: Do you think Government should introduce Rent Repayment Orders where a landlord has been convicted of illegally evicting a tenant? As was pointed out earlier in this document, although illegal evictions are ‘relatively rare ... they can be a frightening and traumatic experience for tenants’. So, bearing in mind the serious consequences for tenants if they are illegally evicted, it is reasonable that rent repayment orders should be made to compensate the tenants and to discourage errant landlords from duplicating this activity.
Question 9: Should this be in addition to, or instead of, any damages the tenant may have received, or action taken by the local authority, for example a prohibition on renting out the property? Rent Repayment Orders should be in addition to damages or other actions since they provide greater redress for the victim (the illegally evicted tenant).
Question 10: Should a Rent Repayment Order be issued automatically where a landlord has illegally evicted a tenant? Yes. As it provides some basic clarity to both parties about what will happen should this eventuality occur, this is not an unreasonable action.
Question 11: Do you think a landlord should be subject to a Rent Repayment Order if they rent out a property that contains serious hazards? Yes. This action should happen automatically, both to accentuate the seriousness of the landlord’s actions in renting out a property containing such a hazard, and to provide administrative simplicity.
Question 12: What should the trigger point be? The existence of Category 1 Hazards must create a trigger point. However, a Category 2 Hazard could possibly also be a justifiable trigger point.
Question 13: Should a Rent Repayment Order be in addition to, or instead of, any damages that the tenant may also be awarded, or other action taken by the local authority, for example a prohibition on renting out the property? A Rent Repayment Order should be made in addition to, rather than instead of, damages or other actions. Prohibition on renting out the property would be of significant value because it would act as a strong incentive to owners to put things right, and it would prevent other people tenanting the property and thus falling victim to the hazards that need to be removed. It needs to be in addition because otherwise it does not create any redress for the previous tenant who has been the victim.
Question 14: Is there a need to review the sanctions currently available to local authorities when dealing with less serious housing condition breaches? Yes. This review should be carried out with a view to making it easier for local authorities to take action in furtherance of a general approach to tackling poor standards in the PRS. In our experience the LA is not over-zealous in taking enforcement action and strikes a reasonable balance. They are no doubt influenced by issues of the time and resources that it takes. They seem to prefer to take worst cases and ‘make examples’ of rogues. This only works to an extent because it has modest impact on those who are mostly ignorant of their responsibilities (but are not rogues) and thus unwittingly do not realise they are doing anything wrong.
Section 4: Safety Conditions
Question 15: Should private sector landlords be required to install, and maintain, smoke alarms in their properties, or would a non-regulatory approach to encourage greater take-up be a better option? Installation and maintenance of smoke alarms should be mandatory. The non-regulatory approach has probably gone as far as it can in boosting the number of alarms in homes. There have been real benefits demonstrated by the use of smoke alarms in avoiding the tragedy of deaths by fire in the home (as the paper details). Costs of smoke alarms are modest. Within a reasonable lead time it should be required that alarms are ‘hard wired’ for added reliability. The cost, including fitting and wiring, is not disproportionate. There are likely to be financial benefits for landlords in terms of reduced insurance premiums, and the benefits to tenants are immeasurable.
Question 16: Should private sector landlords be required to install, and maintain, carbon monoxide alarms in their properties or would a non-regulatory approach be a better option? For reasons similar to those given in response to Question 15 with respect to smoke alarms, carbon monoxide should also be required.
Question 17: Does the Landlord & Tenant Act 1985 cover the right areas, or should it be broadened to cover other issues? As a group representing residents and neighbourhood groups across a range of different neighbourhoods where there are significant numbers of private rented properties, we have concerns about the wider impacts on a neighbourhood of exterior dilapidation of properties. This can have negative impacts on neighbourhood desirability, housing demand, or efforts to regenerate neighbourhoods, and can serve to put off property investors and home owners, or those seeking to invest in other businesses in an area. It could be that a review of powers may be required here so that exterior property dilapidation can be tackled by relevant bodies, where it is deemed necessary to take action.
Question 18: Do you think that the current approach strikes the right balance or should there be a statutory requirement on landlords to have electrical installations regularly checked? A statutory requirement for 5-year electrical safety inspections would be an improvement on the current situation, with a requirement that the results of the inspection are made available to tenants before commencement of, and during, a tenancy.
Section 5: Licensing of Rented Housing
Question 19: How effective is voluntary accreditation as a way of driving up standards? Sadly, voluntary accreditation does not appear to be very effective for the reasons stated in Para.46. In high demand areas, there is little incentive for landlords and agents to join such schemes with the result that tenants in those areas are disproportionately penalised.
Question 20: Should we consider introducing tighter restrictions on the use of selective licensing to avoid putting unnecessary burdens on good landlords? No. On the contrary, the NAG’s view is that the issues raised in this paper will only be seriously tackled when the whole business of renting residential property is subject to a clear, consistent licensing scheme which is understood by and respected by landlords and tenants. There are currently unnecessary barriers that need to be overcome to introduce such schemes, even when local communities, LAs and tenants know that there is a problem that needs to be addressed.
Question 21: Should we consider introducing an approach which would enable local authorities to focus any licensing scheme solely on rogue landlords? We do not believe this would be a successful approach. Establishing exactly what a ‘rogue landlord’ is would be subject to complex and time consuming interpretation, legal debate and challenge, and a whole series of other difficulties. The ‘rogues’ characterised in the document would be precisely the sorts of people who would become expert at dodging the legislation and associated enforcement. We believe that tenants and residents should have the security of knowing that all properties, and those who own and manage them, are subject to the benefits of licensing where a local authority has decided to implement a scheme.
We believe that LAs should have much more flexibility to set up schemes that they think are suitable for the areas they serve, and the people who live there, be it the licensing of properties, of geographical areas, of landlords or property managers. We believe it is in the spirit of localism to allow this flexibility. Local people know best what is right for their neighbourhoods.
Question 22: Should the relevant provisions of the Greater London Powers Act 1973 be reviewed or updated, does London need separate rules from the rest of England, and what comments would you have on how regulations could better support and reflect modern technology? The NAG’s comment on this matter is that short term letting of the sort mentioned in Para.50, if it exists at too concentrated a level in a neighbourhood, can have a seriously negative impact on the sense of community in that area, and create other problems relating to neighbourhood stability. We wish to make the case that if this is considered to be too much of a problem in any LA area (not just in relation to Greater London) the LA should have the discretion to require such planning permissions as they deem to be of value to the communities they serve. Allowing all LAs to have this flexibility would bring about consistency, as well as being in the spirit of the Government’s localist approach.
Section 6: Housing Health & Safety Rating System
Question 23: Do you think the methodology that underpins the Housing Health and Safety Rating System and/or the accompanying operational guidance need to be updated? We have no views to submit in response to this question.
Nottingham Action Group on HMOs
26 March 2014