Landlord Licensing and Housing the Homeless in the PRS
We knew long before we took over management in 2007 that our block was subjected to uncontrolled subletting and our difficulty lay in establishing just how many landlords had council or private tenants. Our leases don’t contain a key clause found in many newer leases which is that of not allowing the sub-letting the whole of the flat to a Housing Association, Local Authority, (or any other body whose objects include the provision of housing accommodation).
On contacting the council to find out which of the flats came under their remit, (landlords weren’t telling us so we guessed which ones based on rapid tenant turnover), it was made clear to us that Data Protection meant they didn’t need to tell us. I tried again when we secured a managing agent but they didn’t need to know about them either!
It wasn’t necessarily going to be just our own council housing tenants on our block either but other councils under reciprocal arrangements, i.e. if one council ran out of properties, they could contact another to make up the shortfall.
This situation continued until, under s80 of the Housing Act 2004 (designation of selective licensing areas), the ‘London Borough of Waltham Forest Designation for an Area for Selective Licensing 2014’, came into force on 1st April 2015, requiring most privately rented homes in the borough to have a property licence.
The Council exercised its powers to charge under s87(3) and s87(7) of the Act (applications and fees for licences) and , taking into account the Provision of Services Regulations 2009, which themselves implement the Services Directive.
We thought that this would be of assistance to us but all it has done is given us another layer of management because of the failure of the council to effectively use Part 3 s87(6)b) of the Act, which requires the applicant to give copies of the application, or information about it, to particular persons.
Note: Waltham Forest has a template of this requirement, the Notification of Private Rented Property Licence (PRPL) Application to Interested Parties which can be found here.
When I contacted Waltham Forest Landlord Licensing to see how many landlords had applied for a licence I was surprised to find out that a number of them had already applied but we had received no notification (as interested parties). I was advised that the reason for us being left out of the loop was that the council rely on the applicant filling in the application properly and correctly. Apparently people miss off these details or supply something completely different. For example, one of our landlord applicants incorrectly stated the freeholder as being the managing agent, along with their corresponding address! Well, that’s one explained then!
So, as a result of being left out of the loop I decided to ask some specific questions.
1: What Is The Licensing Time Frame?
On being advised it wasn’t that simple to provide because it depends on how long it takes the officers to gather evidence, the main steps are as follows:
- Letter sent to owner and/or agent advising of the need to licence and given 14 days to reply;
- If no applicition is received, 2nd letter ssent stating that an officer will be visiting the property on a stated date and time and a copy is also sent to the tenant;
- If application is received there are no further steps. If no application is received then visits will continue
- Officer will visit the property again to speak to the tenant for the purpose of gathering evidence to prosecute owner/agent;
- Officer will prepare witness pack to present to legal for prosecution.
2: What Happens If Landlords Are Not ‘Fit And Proper’ To Be Granted A Licence?
Although there is no legal definition of who is a fit and proper person, the authorities must consider whether the person has been convicted of offences involving the following:
- Notifiable sexual offences;
- The practicing of unlawful discrimination;
- The contravention of any housing or landlord and tenant law.
I was advised that in such cases an ‘intention to refuse’ notice would be issued under s88 of the Housing Act 2004 (grant or refusal of licence). It is possible (within the 14 day consultation period) to nominate someone else to be the licence holder and responsible for the property, which one of the landlords did. If an alternative is not nominated, they will not receive a 5 year licence. The license could be varied if there were concerns about the landlord and they would need valid reasons as to why we did not agree with a license being issued. They could potentially issue licenses of 1 year (instead of 5) in order for these issues to be sorted.
3: What If The Licensing Conditions Are Not Being Met?
In situations where the officer finds that the licence conditions are not being met, or that information provided with the application is incorrect, a number of options are available, including:
- The licence holder may be asked to vary the information previously supplied;
- The landlord may be asked to carry out improvement works;
- The council may refer the address to the council’s housing standards team where formal enforcement action might be required;
- Prosecution for non-compliance with the licensing scheme.
4: Can a Licence Be Reduced to a Lesser Term Once Granted?
In terms of carrying out repairs, some landlords on our block are notoriously difficult when it comes to getting repairs carried out so I asked if it were possible to get the original license reduced if this kind of behaviour continued afterwards. I was advised that although it would be the decision of the council to make, it would be unlikely that they would do so.
5: Can An Unlicensed Landlord Demand A Rent Increase?
Whilst I understood that a tenant could appeal against a rent increase, (which must be put in writing giving one months notice) I wanted to know if a rent increase demand would be viewed as null and void where a landlord is operating without a license. The answer was that whilst such a demand could be made without one, it was suggested it would be less enforceable.
EXEMPTIONS FROM LICENSING
Another problem is that some landords are exempt from the licensing +process because they have leased their properties to a local authority for a pre-determined period for them to use in one of two ways:
- The use of Private Sector Leasing, a scheme for families and individuals who find themselves homeless and so are helped to find immediate, temporary accommodation whilst their claim for permanent housing is being processed;
- Nightly let schemes, again for temporary accommodation.
Both schemes are council-led but the problem with the former is that the actual landlord is not named on the tenancy agreement. This is because that position is assumed by the LA’s managing department or agent. It is the LA who is responsible for the finding, vetting and placing of tenants and dealing with any later issues. In effect the leaseholder landlords have stepped back from all aspects of flat management.
This is all well and good but we have at least one landlord that the council should have definitely involved us in terms of granting a licence. He currently has two flats on our block and one of them was previously exempt from licensing because it was being used as temporary accommodation for Redbridge Council. This situation has now changed and he has been granted a licence for that particular property but again with no input from the freehold RMC. This is particularly galling as a) he knows full well who the freehold company are and b) has converted the flat from a 2-bed to a 3-bedroom property and marketed it accordingly., without freeholder consent.
His other flat (held in his wife’s name) doesn’t (at the moment) need a licence as it was previously used by Hackney Council for four years with the same tenant being housed there. It too has been converted from a 2-bed to a three. More recently, I met some prospective tenants from Islington Council who were due to move in subject to paperwork being signed. I took the opportunity to advise them that this property had been converted into a 3-bed property without freeholder consent, whilst also expressing my concern that they may end up paying for something that is contrary to the title deeds. I also had an interesting conversation with someone from Islington Council regarding the issues we have with the layout and it was made perfectly clear to me that:
- The council had accepted it as a 3-bed flat;
- The council tax was paid as a 3-bed flat and;
- The benefit was worked out according to a 3-bed flat.
Ultimately they only cared about what they could see, not what they should see!
However the conversions to both properties need consent in the form of a licence to alter from the freehold company which will appear on the title deeds. It also gives the freehold company the right to commence forfeiture proceedings at the First Tier Tribunal for a breach of the lease.
So why do landlords sign over their properties? In one word, incentives, which are offered under s25 of the Local Government Act 1988 (consent required for the provision of financial assistance etc). These incentives include:
- The authority paying the costs of leases;
- Making small one-off grants (“finders’ fees”) to landlords to encourage them to let dwellings to households owed a homelessness duty;
- Paying rent deposits or indemnities to make sure accommodation is secured for such households;
- Making one-off grant payments which would prevent an eviction;
- Discretionary Housing Payments (DHP) to give financial help to meet a shortage in a person’s eligible rent and the housing authority consider that the claimant is in need of further financial help. Such payments are governed by the Discretionary Housing Payment (Grant) Order 2001.
Note: Whilst there is no limit set on the amount of financial help that can be provided, authorities are obliged to act reasonably and in accordance with their fiduciary duty to local tax and rent payers.
In total we have copies of 4 landlord licences out of 17 rented flats which begs the following questions:
- Do the rest need licencing?;
- If more have been granted licenses then why don’t we or our managing agent have more copies as interested parties?
I will of course pursue the missing licenses but as far as we are concerned, the whole process has been far from satisfactory and landlord licencing is again being open to consultation again as it expires in March 2020.