Housing and Planning Act: Private Rented Sector Measures

A look back over 12+ months May 2015 Transparency of fees introduced PM speech on immigration [rogue landlords & HMOs] Oct 2015 Mandatory smoke & CO alarms plus retaliatory evictions Oct 2015 Housing & Planning Bill published with PRS package Feb 2016 Right to rent checks May 2016 Housing & Planning Act received Royal Assent

Overview of PRS measures in Housing & Planning Act 5 measures designed to tackle rogue landlords/property agents Database of rogue landlords/property agents Banning orders for most prolific offenders Civil penalties of up to £30,000 Extension of Rent Repayment Orders Tougher fit and proper person test for landlords of licensed properties Act also introduces New mechanism allowing landlords to legally recover abandoned properties without needing to go to court; and Powers on electrical safety and client money protection

Database of Rogue Landlords and Property Agents Help Councils keep track of rogues and target enforcement action Not publically accessible. Only to be accessed by DCLG and local housing authorities. Anonymised data will be made public Local authorities may include details of landlords/property agents convicted of a banning order offence or with 2 civil penalties. Will be required to include details of any landlord or property agent served with a banning order

Banning Orders To be defined in regs but likely to be an offence Involving fraud, violence, drugs or sexual assault, for which offender was convicted or sentenced in Crown Court Committed against any person living at a property owned by offender Prosecutions taken under Housing Act 2004 Can be banned from: letting housing Engaging in letting agency work Engaging in property management work or Doing two or more of the above Banning orders must be made by First Tier Tribunal following application by local authority who obtained conviction

Banning Orders Cont. Minimum 12 months. Length of ban must be specified. Penalties for breach can range from civil penalty, Rent Repayment Order, unlimited fine or 6 months imprisonment. Provision for daily fine where breach continues. Banned landlords may not hold a HMO licence. Local authorities can make a management order if they want property to continue to be available for rent. All rental income would be retained by the Council. Committed to consult on detail and for regs to be affirmative. Keen to work with the sector in developing guidance.

Financial Penalties as alternatives to prosecution (‘civil penalties’) Local authority may choose to issue a financial penalty 2016 Act amends Housing Act 2004 so certain offences will be able to attract a financial as alternative to Court Maximum financial penalty will be £30,000 for each offence Local authority will need to apply the criminal standard of proof Option of appeal to First Tier Tribunal against penalty and amount imposed Local authority will be able to retain income from financial penalty to use for housing related purposes

Civil Penalties cont. Civil penalties will be available for the following existing offences: Landlord did not comply with statutory notice, e.g. Improvement Notice of Prohibition Order. Licence not obtained for a licensable HMO. Failure to comply with HMO management regulations. Licence not obtained for a property subject to selective licensing. Allowing a property to be overcrowded.

Rent Repayment Orders Extending Rent Repayment Orders to cover situations where: Tenant has been illegally evicted or harassed, or the landlord used violence to obtain entry Landlord has failed to comply with a statutory notice, e.g. an Improvement Notice; or Landlord has breached a banning order Local authority must consider applying for a Rent Repayment Order where they become aware a person has been convicted of one of the above offences.

Fit and Proper Person Test More stringent fit and proper person test for landlords of licensable properties, involving: Disclosure and Barring Service check so local authority has information about any criminal convictions Checking whether landlord: Has received a penalty for not carrying out a Right to Rent check Has leave to remain in the UK Is bankrupt or insolvent Or their managing agent has an office in the UK

Abandonment New procedure for legally recovering a property without needing to go to Court. Landlord must serve 3 warning notices before property can be recovered. Copies of notices must go to guarantor/deposit payer. 1 st warning notice may not be served until at least 4 weeks/1month rent is unpaid. 2 nd notice can only be served if at least 8 weeks/ 2 months rent unpaid. 3 rd and final notice must be affixed to door of property and tenant must be allowed at least 5 days to respond. Regulations will set out form that final notice must take. Will issue guidance for local authorities. ---Only if no rent paid and property abandoned---

Powers to help identify and target rogue landlords/agents Bill includes new powers to enable LHAs to received information from tenancy deposit schemes about tenancies in their areas Tenure information and council tax form working group currently looking at using council tax forms to help with intelligence on rogue landlords

Further protections for tenants in the Bill Bill was amended in HoL to give SoS powers to: Ensure property agents (i.e. letting and managing agents) that hold client money, such as rent or service charges, belong to a client money protection scheme; and Require that rented properties in the PRS meet acceptable electric safety standards. DCLG will consult on these proposals before regulations are published.

HMO reforms Published discussion paper setting out options last November – extending mandatory HMO licensing Plan to publish results and consult on new draft Orders to implement the proposed changes in due course. Plan to implement any changes in line with Housing & Planning Act PRS measures.