Landlord Licensing and Rogue Landlords
The term ‘rogue landlords’ is usually used to describe those landlords who rent out substandard properties, which are often dilapidated, overcrowded, squalid or dangerous. Landlords of these properties operate under the radar as much as possible and anti-social behaviour can be rife.The idea of landlord licensing was popular with some but opposed vociferously by the powerful landlord lobbying organisations with objections ranging from a blanket ‘we don’t need any more legislation’ to ‘it’s just a scheme to make more money out of landlords’.
These arguments stemmed from the fact that local authorities were already granted a number of powers to deal with anti-social behaviour as:
- ASB Co-ordinators: They can make an application to the Court for an Anti-Social Behaviour Order (ASBO) and getting the tenant to sign up to an Acceptable Behaviour Contract (which has all I’ve ever been offered and in only one situation);
- Envirocrime Units: These units work in tandem with the police dealing with issues such as fly-tipping, graffitti, dog fouling and abandoned cars;
- Environmental Health Officers: Under s80 of the Environmental Protection Act 1990 (summary proceedings for statutory nuisance) EHO’s will take ‘all reasonable’ steps to assess whether noise constitutes a statutory nuisance. If it does (and is likely to reoccur) a noise abatement notice can be served and if it is ignored then the offenders can face court action as well as the confiscation of the equipment if that is what is causing the problem;
- Premise Closure Orders: These can be requested by the police and result in the courts being able to temporarily close any premises (and common areas) associated with serious and ongoing ASB and/or nuisance.
These powers were further enhanced by local authorities being granted additional powers under the Housing and Planning Act 2016 to not only deal with landlords and their letting agents by being able to:
- Apply for a banning order to prevent a particular landlord/letting agent from continuing to operate where they have committed certain housing offences and so removing them from the sector;
- Create a national database of rogue landlords/letting agents as a result of the (then) Prime Minister David Cameron announcing a new licensing scheme to crack down on unscrupulous landlords;
- Allow tenants or local authorities to apply for a Rent Repayment Order where a landlord has committed certain offences (for example continuing to operate while subject to a banning order or ignoring an improvement notice). If successful the tenant (or the authority if the tenant was receiving universal credit) may be repaid up to a maximum of 12 months’ rent;
- Issue fines as well as commence prosecutions.
It was the London Borough of Newham that started the ball seriousy rolling when it adopted the use of Selective Licensing borough-wide for all private landlords. For it to be applied, an area had to be identified as particularly risky but it could also be designated if it was either one of ‘low housing demand’ or, under s80(6) of the Housing Act 2004:
- The area is experiencing significant and persistent problems caused by anti-social behaviour;
- Some (or all) of the PRS landlords who have let premises in the area are failing to take proper action to combat the problems;
- When combined with other measures taken in the area by the local housing authority or others with the authority, making an area a designated area will lead to a reduction or the elimination of the problem.
Again this met with opposition from landlord lobby groups but despite their objections, it has been adopted by boroughs across London and the UK.
The ‘London Borough of Waltham Forest Designation for an Area for Selective Licensing 2014’, didn’t come into force until 1st April 2015, under s80 of the Housing Act 2004 (designation of selective licensing areas), and it required most privately rented homes in the borough to have a property licence.
When I contacted the licensing team to see how many landlords had applied for a licence I was surprised to find out that a number of them had already done so but we had received no notification (as interested parties). Apparently it was because they rely on the applicant completing the form properly and correctly,
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.
Some landlords are actually exempt from the licensing process because they have leased their properties to a local authority for a pre-determined period for them to house the homeless (or those about to become so).
Due to the chronic shortage of council housing, private sector landlords are offered a number of incentives to give up their properties for periods of between three and five years under Private Sector Leasing. The incentives are granted under s25 of the Local Government Act 1988 (consent required for the provision of financial assistance etc) and 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.
What was also found out later was the fact that other councils were involved in housing the homeless due to reciprocal arrangements they have with each other. So, if one borough has nothing suitable it will will ask for help from elsewhere. We have had Tower Hamlets, Islington, Westminster and Brent councils all using our block at some point.
We’ve been in charge of our block since 2007, first through Right to Manage then obtaining the freehold via compulsory acquisition but I’ve yet to find any proof that any of of our leaseholder landlords (past or present) have gained accreditation or signed up to trade body membership. So we hoped that landlord licensing would assist in terms of greater visibility but it didn’t really make much difference. This was because of the failure of the council to effectively use Part 3 s87(6)b of the Housing Act 2004 which requires the landlord applicant to give copies of the application, (or information about it), to particular persons as interest parties. In our case it would be our RMC Directors or managing agent. It’s a bit of a mouthful but the Notification of Private Rented Property Licence (PRPL) Application to Interested Parties can be found here.
What is available though is a ‘rogue landlord’ database which lists half of all landlord prosecution under the Housing Act 2004 between 2006 and 2014 and the London Mayor’s Rogue Landlord and Agent Checker.
We on the other hand only have 4 license copies out of 17 rented flats and aside from the 6 flats that are owner-occupied, I have to assume that the remaining 7 all use local authority leasing. So, the process for us has been far from satisfactory and landlord licensing is again being open to consultation again as it expires in March 2020.