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Landlord Licensing by mrs77385

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									            SALFORD CITY COUNCIL - RECORD OF DECISION

I (insert name) Harry Seaton
(insert title)              Director of Housing Services
in exercise of the powers conferred on me by Paragraph 6 of Section F of the Scheme of Delegation of the Council,
and following consultation with Councillors Warmisham and Burgoyne being the Lead and the Deputy Lead
Member, respectively, for the Housing Service function, do hereby approve

1.    Note Officers work to date in progressing Landlord Licensing
2.    The commissioning of further work to progress this scheme

The reasons are

To develop an effective method of controlling those Private Sector Landlords who are unwilling to
undertake voluntary accreditation


The source of funding is Officers will carry out initial work as part of their usual workload however
additional resources will be sought from the Northern Consortium of Housing Authorities


The following documents have been used to assist the decision process:-




Signed ...............................................   Dated ................................................
Director

Signed ...............................................   Dated ................................................
Lead Member

Signed ...............................................   Dated ................................................
Deputy Lead Member

Contact Officer Bob Osborne                              Tel. No 925-1202

* This matter is also subject to consideration by the Director of Corporate Services
  and, accordingly, has been referred to that Director for a decision

* Delete, as appropriate




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PRE-DECISION CHECKLIST

1.       Consultation Yes/No/N Applic – Please list – Not applicable at this stage
2.       Environmental Impact …………………………………………………………
3.       Budget Provision £             Capital/Revenue
4.       Personnel/Training/Equal Opps Implications. Please specify ………………..
5.       IT Requirements Yes/No/N Applic
6.       Refer to Area/Scrutiny/Cabinet
7.       Publicity/PR Yes/No. If Yes refer to Sue Hill. Yes

Signed: ………………………………. Asst. Director or Department                       Date: ……….




              Report to Lead Member and Deputy Housing
Report for Decision/Information

Date of Meeting : 6th October 2000

Subject : Landlord Licensing

Background
Officers met with officials from the DETR on Thursday 28th September and presented the following broad scheme
as a proposal for Landlord Licensing in Salford. Officials seemed genuinely pleased with the broad concept of the
scheme. This meeting will be followed up by the following actions:-

(a) A site visit to Salford by Theresa Clay one of the Senior Civil Servants in the Autumn
(b) A request to the Northern Consortium of Housing Authorities to carry out research work into the existing
    powers of Local Authorities in regard to these proposals. In addition the Director of Corporate Services be
    asked to bring in extra resources for Private Sector Housing legal support and advice to progress this scheme
    (amongst other items – see separate report on this agenda)
(c) Specific and close work with Greater Manchester Police on the implications of such a scheme
(d) On completion of the work in (b) above Officers to formally apply to Ministers for the power to operate a
    pilot scheme in advance of any legislative programme. This application to note any restrictions of current
    legislation and seek to address these.
(e) The parallel development of a Landlord Accreditation system which will provide the structure and processes
    to deal with “legitimate” landlords.
(f) Advice and information to Community Committees on our progress to date in addressing these issues
    specifically       in      Ordsall/Langworthy,       Broughton/Blackfriars,       Claremont/Weaste         and
    Kersal/Charlestown/Pendleton.




Broad Concept of a Landlord Licensing Scheme
There are 105,000 homes in Salford. Of these approximately 8,000 (8%) are private rented properties, with 1,300
HMO properties. We believe there are in the region of 7,000 properties to be covered by landlord licensing.
Approximately 2,000 different landlords of varying standards manage these properties.

In the most part, Salford’s private sector functions efficiently, providing affordable homes for households who
have specific requirements or are looking for flexibility not afforded in the public rented sector. However in areas



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of unpopular housing the community sees the sector as a principal source of an areas decline. This has been clearly
evidenced as part of the Area Regeneration Task Groups investigations.

In these socially excluded areas the collapse of the housing market has left many owners unable to sell their
properties and they have been financially reliant on renting if they wanted to move from the area. These people
have become known as reluctant landlords.

In addition, with low house prices properties have exchanged hands for minimal amounts and are believed to be
used to launder illegally gained money and there are allegations that extortion has been used to scare homeowners
out of an area. The homeowners have then been forced to sell their homes to those parties involved in extortion.

These properties often have been the focal point of anti-social problems such as drug dealing and other criminal
activities.

The Different Type of Landlords

Salford’s experience suggests there are broadly five groups of landlord:

1.   Professional landlords/ managers – usually looking after relatively large portfolios, with tens of properties
     although this group represents a small section of the market (less than 10%). These landlords are typically
     knowledgeable of their rights and responsibilities, and are often members of trade associations such as RLA.
     They are sympathetic to the need for licences, as they are concerned about the standards of other private
     landlords. The local authorities must work with this sector to make licensing (and accreditation) work.

2.   Inexperienced landlords – this group look after a small number of properties as a secondary business
     enterprise having identified the sector as a means of making money, and represent the largest part of the
     market in most parts of the city. Their standards vary greatly as there is often little understanding of their
     rights or responsibilities.

3.   Reluctant landlords are those owners who have felt forced to leave an unpopular area due to social conditions
     and have been unable to sell their home. They represent a significant proportion of the sector in areas such as
     Seedley & Langworthy.

4.   Unscrupulous landlords – this is small proportion of the sector but a group that can escalate an areas decline.
     These landlords will acquire properties at minimal prices, invest very little in its maintenance and generally
     try and let to individuals unaware of their rights as tenants. These landlords will not follow their obligations
     unless enforced to do so by local authorities.

5.   Criminal landlords – also represent a small proportion of the sector but exert a disproportionate influence
     over an area. These landlords have ulterior motives for owning properties, such as drug dealing or the
     laundering of illegally gained money.


Accreditation

Salford is starting to work with landlords to develop an accreditation scheme. This is aimed at supporting
landlords to improve their service through information, training and practical support. Many landlords will benefit
from such things as general tenancy and maintenance advice in addition to an advocacy service. We are
investigating whether accreditation can improve such things as the Housing Benefit service and the fair rent
levels.

This scheme is being worked up with landlords in Salford and will benefit those landlords from the above
categories who want to improve and see the benefits to be gained.

However there will be significant numbers of landlords who will not take part in voluntary schemes.

These landlords will still have a disproportionate impact upon the neighbourhoods, which they operate because of
badly managed tenancies or poorly maintained properties.

Therefore Salford is anxious to develop a licensing scheme.



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Aims of Private Landlord Licensing Scheme

   To ensure that the private rented sector provides decent affordable and well managed accommodation across
    the whole of the city.
   Require that only fit and proper people can act as managing agents for properties.
   Ensure that all landlords act within the law.
   Ensure that landlords take adequate steps to keep their properties safe (i.e. electric and gas checks).
   Ensure a responsible approach to maintenance and repairs issues.
   Provide the landlord with a responsibility towards the community by:
     Obliging landlords to consider neighbours when undertaking maintenance or security
                  works.
     Ensuring landlords manage their tenancies effectively and fairly and consider the impact of           their
        tenant upon neighbours.
     Reduce the opportunities for tenancies to be used to launder illegally gained money.
   Be sufficiently flexible to not act as a deterrent to potentially good landlords entering the market.


It is important that potential landlords are aware of their obligations as a landlord before they enter the market.
Licensing will deal with those landlords who, through their mismanagement because of inexperience or intent,
cause the greatest concern to neighbours and local authorities. The training, information swapping and support
given by the associated accreditation scheme will improve the professionalism of the sector.


Objectives of Scheme

The scheme will have a preventative element and an ongoing monitoring element. The first part is to ensure that
those landlords who obtain a licence are capable of managing their properties effectively and are aware of their
obligations. Once a licence has been obtained the local authority will monitor the landlord by exception and spot
checks.

Prevention

To licence a landlord the following steps are required:

Is the person fit and proper?
In order to consider whether a person is fit and proper to be a landlord the local authority in partnership with the
police and other relevant agencies ought to consider:
      Whether it is satisfied that properties have been transferred into this person’s effective control,
      Any references provided by the proposed landlord,
      Whether they have any relevant convictions,
      Whether there were difficulties with their previous landlord licence,
      Complaints against their tenancy management from tenants or their tenants neighbours,
      The accessibility for tenants of the landlord or their agent.

Where a fit and proper landlord is related to, or a business associate of, a former landlord or person deemed unfit
the authority may lay down conditions to the licensing, such as excluding the third party from any role within the
tenancy management.

Does this individual have an awareness of their legal responsibilities?
The local authority will want to see a copy of the proposed tenancy agreements before a landlord is given a
licence. Landlords will only be granted a licence for those legally appropriate tenancy agreements provided to the
local authority. That is to say if a landlord gives the local authority a 6 month assure short-hold tenancy, then this
is the tenancy he/she must use for all tenants. This is not to exclude landlords being able to use different tenancy
agreements if they demonstrate an understanding of the relevant housing powers.

The landlord will give an undertaking to carry out all safety checks within the correct legal time-scales. This will
be monitored by exception and only investigated where there is good reason to suspect this has not taken place.




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Landlords will respond to repair complaints appropriately and within reasonable time-scales.

Has the proposed landlord a reasonable business plan?
Landlords will be required to identify how they can maintain their property to a reasonable standard with the
proposed income streams.

Landlords will be expected to consider neighbours when undertaking work or securing their property. They will
be required to consider the impact of their actions (or non-actions) on their property’s neighbours. A landlord must
consider the effect of his/her investment strategy on the value of properties in the neighbourhood.


Is the landlord capable of managing tenancy issues?
An effective management approach is required to ensure all tenancy issues are dealt with swiftly and efficiently.
Where appropriate landlords will be required to inform complainees and/or the tenant of any action taken within a
reasonable time scale. A landlord will be expected to take appropriate action in the best interests of all parties
including neighbours of their tenancies.

The prospective landlord will need to demonstrate an ability to respond to tenancy issues.

All landlords will be required to treat all tenants equally irrespective of race, gender, sexual orientation or
disability.

Has the landlord paid the registration fee?
The administration of the scheme will have to be financed by a small charge levied against landlords.

Monitoring of the Scheme

Landlords will be licensed to manage certain types of tenancy as stipulated in the licence. Landlords will not be
able to use tenancy agreements not agreed as a condition of the licence.

The authority will not inspect every property owned by licensed landlords. It will not be practical to inspect 7,000
properties on an annual basis without incurring significant costs. If the scheme is to be self-financing it cannot be
too onerous.

Complaints to Salford will be encouraged to be redirected to the landlord in the first instance, where appropriate.
Tenants will be advised it is their responsibility to raise issues with their landlord in the first place, and the
landlord is obliged to respond.

If there is a poor response or the complainant is concerned of repercussions, the authority will, where appropriate,
liaise with the landlord and negotiate a resolution.

In serious or repetitive cases the investigation may result in the landlord :
         being served an order to rectify the situation,
         or being required to undergo training to improve awareness,
         or having their licence suspended or revoked.

The local authority will undertake small sample checks of landlords to ensure their compliance to the licensing
regulations.

The Enforcement

Clearly it will not be possible to exclude all unlicensed landlords from renting their properties on an informal
basis. However criminal landlords will not be able to launder money unless licensed as they ought not to be
collecting rent. It may be also that no Housing Benefit is granted to landlords who are unlicensed.

Before a landlord has a licence revoked there need the authority must consider his or her tenants. There are three
broad options; all which require further consideration:
 Rehouse the tenants and leave the landlord with empty properties and no licence to let.
 CPO the properties under qualitative grounds and give to HAs to manage with tenants in situ.
 Agree to the management of the property to change hands to a licensed landlord.



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Partner Agencies

It will be vital to include the following partner agencies in the development of the scheme

Private Landlords
Registered Landlord Association
Housing Associations
Housing Corporation
Police
Benefit Agency
University

Conclusions

The Housing Green Paper made a clear statement about the opportunity to develop Landlord Licensing in areas of
low demand. Salford is well placed to develop such a scheme. Authority to further progress this approach is
requested.


Author ; Mark Glynn – Living Environment Coordinator/ John Wooderson – Head of Private Sector Housing
Checked by : Bob Osborne –Assistant Director of Housing

1/10/00




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