Submission by the Nottingham Action Group on HMOs
to the Department for Communities & Local Government Technical Discussion Paper on
Tackling Rogue Landlords and Improving the Private Rented Sector
August 2015
 

Background

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 housing issues in general, including those associated with the private rented sector as a whole, and the role it plays in providing accommodation for many people, as well as into the problems that can be associated with it. It is against this background that this response is couched.

General Comments

We fully support tough sanctions against so-called rogue landlords. We emphasise the importance of making enforcement of these sanctions (most notably by the relevant local authority) quick and efficient so that action can be swift and effective. In addition, it is essential that the penalty regime is genuinely punitive so that it is cheaper for a landlord to provide a good-quality, well-maintained property than simply ‘pay the fine’ in lieu of providing a decent home.

However, we need to stress that many of the problems associated with the private rented sector (PRS) have their roots in, amongst other factors,

  • the continued lack of awareness of the standards required (and expected) of landlords;
  • an all too frequent lack of professionalism within the sector;
  • often a limited understanding by tenants of their rights and thus an inability to enforce those rights, combined with a fear of such things as ‘retaliatory eviction’.

Even for the many tenants able to avoid rogue landlords, these problems are equally difficult and contribute to the poor reputation of the PRS.

It is our view that those landlords who act in a professional and responsible manner should be deterred from turning ‘rogue’, and that rogue landlords must be either persuaded to behave in a professional and responsible manner, or, if not, they must be removed from the PRS.

SECTION 1 – TACKLING THE WORST OFFENDERS
Aggravating Factors in Housing Offences 

Questions

Do you think that current fines for housing offences generally reflect the gravity of the offence? If not, how can this best be tackled? NO. All too often the fines are disproportionately low when compared to the rental income being generated per annum, with the result that the incentive for ceasing the behaviour is not strong enough. To make the action against an offender more corrective, the fines should be high enough to produce a disincentive for continuing the action.

If necessary, the landlord should be expected to sell the property in question to pay the fine, rather than allow consideration of the ‘ability to pay’ to lead to low fines of the sort quoted in the document.

What has been the impact (if any) of removing an upper limit on potential fines for certain housing offences? We have yet to see any local evidence which suggests that this has resulted in a significant reduction in problems, or in the disappearance of ‘rogue’ landlords from picture.

Should we consider setting minimum fines for repeat housing offences which have aggravating features? If so, what would be an appropriate level? Are there alternative approaches? Setting levels for minimum fines in such circumstances may be helpful.

Are the relevant housing offences listed appropriate? By and large, the offences listed are appropriate. However, we would like to see greater emphasis placed on sanctions for landlords who fail to take action against tenants’ anti-social behaviour. Many landlords seek to avoid taking responsibility in such matters and argue that they cannot be held responsible for the behaviour of their tenants. Other tenures (social landlords) take a more pro-active stance in responding to anti-social behaviour by their tenants, and we see no reason why the PRS should not also be similarly pro-active.

How should we deal with offences committed by a company if the offence was the result of a deliberate act or omission by an officer or officers of that company? Companies must take responsibility for the actions of their staff, and they should be expected to have proper processes in place for monitoring staff in order to help prevent deliberate acts or omissions.

Blacklisting and Banning Rogue Landlords

Questions

Do you agree that data held by the Tenancy Deposit schemes should be made available to local authorities? YES. We strongly support this.

Do you agree that there should be a blacklist of persistent rogue landlords and letting agents? YES. Once again we strongly support this.

Do you agree with the proposed reasons for placing someone on a blacklist and issuing a ban? We are in broad agreement. However, there may be other circumstances which would warrant placing some-one on a blacklist and issuing a ban. It may be advantageous to allow the local authority to apply to a suitable court (or other body) for permission to include some-one on a blacklist and/or issue a ban if circumstances other than those listed warrant it. The case could be made when required and considered appropriately.

Do you think it should be at the court’s discretion as to whether to include an offender on the blacklist or should this be mandatory? Inclusion of an offender on the blacklist must be mandatory.

Should local authorities have the right to place the offender on the blacklist on any of the above grounds? YES. Local authorities are well-placed to consider issues in a local context.

Do you agree with the penalties proposed for breaching a ban? YES. We are broadly supportive.

If a local authority took over management of a property, how could we ensure that they did not incur a loss in managing the dwelling? Additional, non-recoupable costs could be placed as a charge against the property (with the addition of interest) which would be repaid to the local authority (i.e. the tax payer) upon sale or transfer of ownership of the property.

Should we consider stronger penalties, for example, seizing the property of persistent offenders who ignore bans? What safeguards would be needed to ensure that this power was used proportionately? YES. This is precisely the sort of measure which would begin to create a strong enough incentive to prevent the problem from occurring in the first place. An appeal process, reviewed by an independent body if necessary, could be a safeguard.

Fit and Proper Person Test

Questions

Should local authorities be required to refuse a licence to anyone who fails the fit and proper person test? If so, what impact is this likely to have on the number of licences granted? It does not seem unreasonable to require local authorities to refuse a licence to anyone failing the fit and proper person test. In our opinion, this is what the general public and local neighbours would expect.

Is the revised fit and proper person test sufficiently robust or any elements of it too stringent? Although we have no direct experience of involvement with such checks, the criteria of the revised test seem to be reasonable.

Should other criteria be added? We are aware of rogues who have not failed the test, which would suggest that the test is not stringent enough and that there is a need for additional criteria.

How much more expensive would it be for a local authority to apply a revised fit and proper person test? We have no knowledge of the costs that a local authority may incur. However, we believe that local authorities should be able to recoup such costs through licensing and registration fees. It would be in the interests of the PRS to see this happen.

SECTION 2 – RENT REPAYMENT ORDERS AND CIVIL PENALTIES
Rent Repayment Orders

Questions

Should we introduce Rent Repayment Orders for situations where a tenant has been illegally evicted or a landlord has failed to comply with a statutory notice? YES

Should Rent Repayment Orders be introduced for any other situations? YES. For example for other safety breaches, failure to provide the facilities and/or services detailed in the tenancy contact.

Should a Rent Repayment Order be limited to 12 months? NO. If warranted, such an order should run for a longer period.

Should issuing of a Rent Repayment Order be automatic? YES. This is necessary in order to ensure clarity and avoidance of doubt.

How many additional Rent Repayment Orders per year are likely to be issued if they were extended?  We do not have the necessary information to enable us to make a useful comment.

Would the use of Rent Repayment Orders have a significant impact on landlords? We believe this would be the case, and would go some way towards achieving the objectives set out by Government in this document.

Civil Penalties

Questions

What situations or contraventions should be covered by civil penalty? Those listed in the document. However, we would not want to see very serious issues being reduced to civil penalties. These are often seen by offenders and the wider society as being ‘less significant’. Some of the items listed would have very significant consequences for tenants and other residents, and therefore should not be equated in the public mind with, for example, ‘getting a parking ticket’. But, we do accept that the level of the penalty would impact on this point.

Assuming civil penalties are introduced based on the suggested criteria, how frequently is such a power likely to be used? We have no comment to make on this point.

Are they likely to be a genuine deterrent? We believe this would probably be the case, though the level of penalties is what would have a significant impact: set too low and they would be seen by rogue landlords as a ‘price worth paying’.

What would be an appropriate penalty? Should it be similar to the potential fine for not displaying letting agent fees (up to £5,000)? The level of the fines needs to be punitive.

Should there be higher penalties for repeat offenders? YES. This is essential in order to discourage repeat offending.

How should the appeals process work? For example, should there be a right of appeal to the First Tier Tribunal? We have no comment to make about the appeals process.

How would we ensure compliance and enforcement activity is concentrated on serious breaches rather than incentivising overzealous enforcement of low level breaches? Different levels of penalties may help to ensure compliance, whilst avoiding overzealous enforcement of low-level breaches. However, we make the point that low-level breaches can be just as frustrating for tenants, residents, neighbours, and indeed other landlords who aim to meet their responsibilities and who incur costs in doing so which those who breach do not. So, there is a strong case to ensure that low-level breaches are properly enforced.

SECTION 3 - ABANDONMENT

Questions

How widespread a problem is abandonment? We have no detailed information with which to formulate a viewpoint. However, we are aware of the fact that abandonment does happen and that, when it does, properties can become a blight upon their neighbourhood, and, for no good reason, deny much needed accommodation.

What costs does a landlord currently face when presented with an abandoned property? We have no comments to make.

How effective would the process described above be in tackling the issue? Subject to suitable safeguards for tenants, e.g. in circumstances when rent was still being paid, this would appear to be a useful way of improving the present situation.

Does the lack of a courts process present too much uncertainty? The lack of such a process does pose a risk.

What are the reasonable steps and actions a landlord should take to satisfy him/herself that a property is abandoned? Amongst other steps, landlords could usefully seek information from neighbours in near-by properties.

What happens if a tenant returns to re-claim a property? We have no views on this.

What should the landlord do with the tenant’s personal property? It seems reasonable to require the landlord to place a tenant’s personal property in storage for a set (but not unduly long) period of time, or accept that in the event of the return of a tenant, the landlord, having disposed of the property, may have to replace it.

Nottingham Action Group on HMOs
18 August 2015