The Renters’ Rights Bill promises a landlord database to help those in the sector be more compliant, but it won’t help landlords that have already born the brunt of fines, writes Nigel Lewis.
The proposal to make all landlords in England register both themselves, their property and any compliance details with a central Private Sector Rented Database will, unbeknown to the Government, end one of the more recent injustices faced by many landlords.
Of course, few people outside the buy-to-let community care about measures that make landlords’ lives harder or that are unfair or unjust but let me explain why I think this issue needs an airing.
Most councils, when considering the introduction of selective or HMO property licensing schemes, are required by the legislation to ensure that any landlords likely to be affected by their proposed scheme know about it, have a chance to comment via a statutory ten-week consultation and have time to get a licence.
But the reality is, despite the best attempts of many councils to make landlords aware of their plans – and let’s remember some make very weak efforts – these messages don’t get through to many landlords.
This is because there is no landlord database in England, unlike in Scotland and Wales where landlords must get a licence to operate and therefore are known to the local regulating authorities.
Landlord database could increase awareness
So, Labour’s new landlord database is a reasonable measure, most organisations – including the National Residential Landlords Association – have agreed.
You may think that landlord ignorance of new local licensing schemes has been and will continue to be (until the Renters’ Rights Bill goes lives later this year) a technicality.
But it hasn’t been. It has cost hundreds of landlords across England a lot of money, sums that are often thousands of pounds outside London and tens of thousands of pounds inside the capital.
That’s because, if a landlord fails to licence a property after a scheme starts then their tenants can, after a year or more, claim all of their rent back via a Rent Repayment Order.
I have talked before on BuyAssociation about how Labour is to double the maximum rent tenants can claim back from 12 months to 24 months and explained how this could ramp up some RROs to nearly £40,000 in London.
But as someone who monitors the RROs going through the Property Tribunal system, I can tell you that every week there is a case where a landlord says they didn’t know that they were required to have a licence – only to have found out that the RRO legislation is clear that ‘ignorance of the law is no defence’.
It’s all very well for a borough to bring in a scheme and email or post its plans to the landlords it knows about, and fling up some posters around their borough and publish online adverts, but to my mind it is unfair that if this fails, and a landlord does not licence a property in time or at all, they can face RROs totalling thousands of pounds, even if their property is run excellently and maintained to a high standard of quality and safety.
Consequently – for example – if you’re a landlord living in Manchester with a property in Devon and even worse with multiple properties across the UK and you are not aware that both selective and HMO property licensing is spreading quickly, then you’re in for an expensive few years.
Is a refund due?
But should landlords know this stuff? The big tenant advocacy organisations say yes, as do local authorities and some Tribunal judges, pointing out that a professional landlord should keep his or her eyes peeled for any changes in local licensing.
On the other hand, many landlords have just one or two properties and hold down full-time jobs and/or live abroad or far away – and it’s accurate to say most have not even heard of property licensing.
I asked a mountain biking pal recently about his properties – he has five in Hampshire – and worryingly he hadn’t heard of selective licensing but was dimly aware that HMOs ‘probably needed some sort of licence’.
The injustice is this in my mind is that it has been unfair to ‘fine’ landlords thousands of pounds via RROs without a national property landlord database that ensures they are aware of their responsibilities (and the costs that come with not meeting them).
The new landlord database proposed in the Renters’ Rights Bill will right this wrong, but I believe many landlords have had to pay thousands wrongly in the past and should be compensated, where appropriate.
Nigel Lewis is an award-winning journalist and editor who has covered the property sector for 25 years including work on national newspapers, magazines and online news and features including spells at The Daily Mail as well as Channel 4 and, more recently, leading specialist titles covering property investment, buy-to-let and the agency sector.
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