Selective Licensing of Private Landlords
Will borough-wide selective licensing of all landlords succeed in dealing with antisocial tenants? And will it be cost effective? David Lawrenson of www.LettingFocus.com looks at the issues.
Back in 2004, selective and additional licensing of landlords was designed as tools to help deal with “low housing demand” and pockets of antisocial behaviour by tenants in the private rented sector.
The thinking behind selective licensing was that problem antisocial tenants were often associated with rogue problem landlords. So, by getting all the respectable landlords signed up and licensed, the local authorities would then find it easier to deal with tenant antisocial behaviour through landlords working with the councils to deal with problem tenant behaviour.
But some boroughs clearly also had an eye to try to use the new powers to shut down the rogue operators in an area – the vendors of “sheds-with-beds” and “live-in-freezers”.
Until now, the application of selective and additional licensing tools was confined to very local areas within boroughs where it could be shown that serious anti social problems existed. Indeed, dealing with local problems seemed to have been the intention of the legislation behind the selective licensing tool- hence the use of the term “Selective”.
So, it’s fair to say that that those bodies that represent landlords have probably been a little taken aback by the plans of the London Borough of Newham to impose selective and additional licensing throughout their entire borough.
Of course it helps a local authority stay out of court and avoid legal challenges if they can prove that they have consulted properly and also made a statistically valid case to prove that antisocial behaviour is strongly connected with tenants in the private rented sector.
But local authorities have sometimes struggled to do this. (In Southend, for example, landlords have argued that problems with antisocial behaviour, whilst taking place in areas where there was undoubtedly a high concentration of private rented sector stock, were actually associated with clubs and pubs that happened to be in the area. In other words, people coming out of the pubs were the cause of the problem, not necessarily the tenants who lived nearby. The issue seemed to be one of alcohol and not connected with housing stock tenure or the quality of management (or not) of that stock.)
But despite the pressing issue of having to prove the case statistically, Newham are moving ahead anyway and the rest of the housing world is closely watching how things will develop.
Some watchers will wonder why a local authority would want to go to the trouble of introducing a full scale licensing scheme for all landlords when a myriad of different rules and regulations already exist for landlords to comply with.
The answer is interesting.
Those in favour of borough wide selective licensing say that it is too expensive, time consuming and risky (given the risk of losing a case) to enforce against rogue operators without it. They say that by imposing a licensing scheme, any landlord operating in the area without a license is immediately criminalised and fined heavily.
This, the authorities say, makes it easier to find and close down the rogue landlords than to try to enforce the existing laws but with no licensing scheme in place.
What this argument is really saying is that because the present complex system of rules and regulations controlling private tenant and landlord behaviour is too expensive to enforce and doesn’t work, it is better to come up with a completely new way.
Sympathy and Deterrents
I have some sympathy with the local authorities. Their budgets have been cut so there is even less money around to investigate and prosecute.
And the penalties for non compliance with existing rules and regulations are derisory, so there is not much of a deterrent anyway.
At LettingFocus, we say it would be far better to enforce the current regulations with much harsher penalties that help to pay for the enforcement. But that is a matter for central government.
So, the local authorities are rather stuck between a rock and a hard place.
But will borough-wide licensing wide work anyway? Will it achieve its objectives?
A recent meeting I had with some local authority housing managers may provide some answers.
Private Tenants Will Pay
At the meeting I pointed out that I expected that most of the cost to landlords of landlord licensing would be passed onto private tenants in the form of higher rents and entry fees.
I also pointed out that rogue operators could ignore any licensing scheme anyway or just join up and hope it might be years before they are inspected (if at all). And there would still remain the rather nagging issue of the costs and time involved in finding and then enforcing against rogue operators who continued trading without a license.
Misuse of Legislation
Landlords who are opposed to Newham’s plans argue that:
(1) it is a misuse of legislation to raise money to pay for enforcement against rogue landlords when the true purpose of licensing was to reduce tenant antisocial behaviour
(2) that blanket licensing will not work to reduce antisocial behaviour anyway.
Opponents argue that rogue operators may sleep easier knowing that a local authority is distracted by the work of setting up a borough wide scheme and collecting license fees from the compliant landlords. As reported elsewhere at this blog, this certainly appears to be the case in Scotland where a universal landlords registration scheme has been operating for several years. An independent report last year was very critical of the Scottish scheme.
We advise local authorities to think very hard about whether licensing will really work.
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