LANDLORDS LICENSING SCHEMES, HMOS AND LANDLORD REGISTERS
A Landlords Registration Scheme May One Day Cover England says Landlord Expert David Lawrenson of LettingFocus.com
Landlords of properties in Scotland (and soon Wales too) have to register their properties and they face fines if they don’t.
In general the regulatory regime for landlords is tougher north of the border than it is in England.
For instance, for a long time in Scotland, all residential let property with three or more unrelated tenants has had to be licensed as a “house in multiple occupation” (or HMO), whereas in England and Wales mandatory licensing in most areas is just restricted to HMOs with three or more storeys and five or more tenants.
To make matters worse for Scottish landlords and for any English “Bravehearts” wishing to let property in Scotland, the Anti-Social Behaviour Act (Scotland) 2004 says that all landlords of any other private rented accommodation need to apply to be registered with the local authority in the area where they let. As we write this (in Jan 2014) Wales is shortly to follow suit.
This means that ALL landlords letting out accommodation in Scotland (and soon Wales) have to be on a register. The only exceptions are where the landlord lives in the same property and holiday lets. (Landlords with HMOs already licensed under the HMO licensing rules are effectively “passported” onto the landlords register.)
It is an offence for a landlord to continue letting residential property in Scotland if he has not submitted a valid application to register on the new database.
Fines are tough - up to £5,000 for non registration and the stopping of rent payments.
The theory behind the scheme was to remove the more disreputable landlords from the market by checking that the landlord is a “fit and proper” person and to ensure that landlords co-operate with councils to try to reduce tenants’ anti-social behaviour.
For the local authority to deem that the landlord is a “fit and proper” person, they run checks to see if the landlord has a history of fraud, dishonesty, violence, drugs, unlawful discrimination or has failed to look after houses properly (so called "category one hazards.")
Landlords who are rejected can appeal.
The minimum fee is £55 and there is an additional fee of £13.75 for each additional local authority area where the landlord lets plus another £11 fee for each property.
So, a landlord with two properties, each in two different council areas will pay £90.75 (£55 + £13.75 + £11 + £11), though is a discount of 10% for registering online.
Landlords need to renew their registration every 3 years. Those wishing to amend the database, to add or subtract properties have to pay an amendment fee.
There are concerns about how the information is being used (or abused). The Scottish Executive admits only that the database “provides information on the scale of private letting in Scotland.” But many landlords feel that Big Brother (and HMRC) is now watching them.
It seems much more needs to be done to let tens of thousands of landlords know about the scheme and their legal duties under it because knowledge of it is particularly thin for landlords living outside Scotland, especially those letting without an agent.
LANDLORD REGISTER IN ENGLAND AND WALES
In Scotland, a large swathe of landlords routinely ignore the landlord licensing and registration scheme and don't seem to be being chased up too hard, so the whole landlords register there looks increasingly like a tax on the good landlords who dutifully sign up, while the rogues continue to operate.
So it seems to us a pointless bureaucratic exercise that has failed in its objective to remove the rogue landlords.
Another slightly different threat is landlord licensing.
Already an all-borough licensing scheme is up and running in Newham, in East London, with tough penalties for those that don't sign up. Other councils look set to follow despite the lack of proven success of the Newham scheme.
You can read our views on whether such schemes are needed and whether they work at our blog - see the links below.
If you are a landlord, find out more on HMOs, licensing, registration and your other duties as a landlord by coming on one of my seminars or arranging a one to one property consultancy and training session.
ABOUT DAVID LAWRENSON AND LETTINGFOCUS
I’m David Lawrenson from property letting experts LettingFocus.com.
We work in a consultancy role with organisations helping them with their products for the private rented sector but we also offer unbiased advice for landlords too.
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