Response to Barking & Dagenham Borough Council’s proposal for selective licensing

Introduction

  1. The National Landlords Association (NLA) exists to protect and promote the interests of private residential landlords.
  2. The NLA represents more than 40,000 individual landlords from around the United Kingdom. We provide a comprehensive range of benefits and services to our members and strive to raise standards within the private rented sector.
  3. We seek a fair legislative and regulatory environment for the private rented sector, while aiming to ensure that landlords are aware of their statutory rights and responsibilities.
  4. We thank Barking & Dagenham Borough Council for providing us with the opportunity to comment on the selective licensing proposal.

Executive summary

  1. Having considered the evidence presented, and having undertaken our own evaluation of the circumstances faced by the residents of Barking & Dagenham, our position can be summarised by the following brief points:
      • Landlords have very limited authority when dealing with matters related to antisocial behaviour, especially if it happens outside the curtilage of the property.
      • The council has provided evidence that under the first scheme that over 82% of properties were complaint and when quizzed a further 15% were made compliant. The remainder should have been prosecuted.
      • The scheme be interpreted an expensive landlord register – landlords have provided details already – the local authority should look at enforcement led.
      • The scheme will lead to a further displacement of problem tenants in Barking & Dagenham and neighbouring boroughs.
      • The council has not published its strategy for dealing with chaotic and antisocial tenants. This should run in conjunction with the current proposal.
      • The council should look at alternative delivery models.
  2. We contend that the flaws in the process and proposals, as outlined above, must be rectified before this application is progressed. Furthermore, once the necessary data has been identified and provided, this consultation exercise should be repeated (if permissible) to ensure engagement with all relevant stakeholders.

General feedback on proposals

  1. Licensing is a powerful tool. If used correctly by Barking & Dagenham Borough Council, it could resolve a number of specific issues. We have supported many local authorities in the introduction of licensing schemes that benefit landlords, tenants and the community. However, in this case, the council has the ability to be innovative in its approach to licensing. It is aware of which landlords are in the borough and should look at ways to target the criminals and the noncompliance from the first scheme. We would recommend that the council looks at schemes such as home safe as an alternative.
  2. We believe that any regulation of the private rented sector must be balanced. Additional regulatory burdens should focus on increasing the professionalism of landlords, improving the quality of the private rented stock and driving out the criminals who act as landlords and blight the sector. These should be the shared objectives of all the parties involved, in order to facilitate the best possible outcomes for landlords and tenants alike. Good practice should be recognised and encouraged, in addition to the required focus on enforcement activity. This is not the case here.
  3. In addition, the proposal does not take into account rent-to-rent or those who exploit people (both tenants and landlords). Criminals will always play the system. For instance, there is no provision for landlords who have legally rented out a property that has later been illegally sublet. The council is not allocating resources to tackle the problems that criminals may cause. Often, landlords are victims, just as much as tenants. What support will the council provide for landlords to whom this has happened?
  4. The issue of overcrowding is difficult for a landlord to manage if it is the tenant that has overfilled the property. A landlord can tell a tenant how many people are permitted to live in the property, and that the tenant is not to sublet it or allow additional people to live there. But beyond that, how is the landlord to manage this matter without interfering with the tenant’s welfare? Equally, how will the council assist landlords when this problem arises? It is impractical for landlords to monitor the everyday activities or sleeping arrangements of tenants. Where overcrowding does take place, the people involved know what they are doing and usually are criminals, not true landlords. The council already has the powers necessary to deal with this problem.
  5. The proposal fails to address the link between homelessness and the effect that licensing will have on tenants in Barking & Dagenham. This impact on tenancies due to a selective licensing scheme is absent from the document.
  6. Landlords are usually not experienced in the management of antisocial behaviour and do not have the professional capacity to resolve tenants’ mental health issues or drug and alcohol dependency. If there are allegations about a tenant causing problems (e.g. antisocial behaviour) and a landlord then ends the tenancy, the landlord will have dispatched their obligations under the selective licensing scheme, even if the tenant has any of the above issues. This just moves the problems around Barking & Dagenham, but does not actually help the tenant, who could even become lost in the system. There is no obligation within selective licensing for the landlord to resolve an allegation of antisocial behaviour. Rather, a landlord has a tenancy agreement with a tenant and this is the only thing that the landlord can legally enforce.
  7. Barking & Dagenham Borough Council has many existing powers. Section 57(4) of the Housing Act 2004 implies that a local authority must not make a designation ‘unless (a) they have considered whether there are any other courses of action available to them […] that might provide an effective method [for Barking & Dagenham Borough Council to deal] with the problem or problems in question’. The council already has powers that can be used to rectify the problems and, hence, the ability to tackle many of the issues that it wishes to overcome in all parts of Barking & Dagenham. These include:
    • criminal behaviour orders
    • crime prevention injunctions
    • interim management orders
    • empty dwelling management orders
    • improvement notices (for homes that do not meet the Decent Homes Standard)
    • litter abatement notices (section 92 of the Environmental Protection Act 1990)
    • fixed penalty notices or confiscation of equipment (sections 8 and 10 of the Noise Act 1996)
    • directions regarding the disposal of waste (e.g. section 46 of the Environmental Protection Act 1990)
    • notices to remove rubbish from land (sections 2–4 of the Prevention of Damage by Pests Act 1949).
  1. At the commencement of a tenancy, the landlord outlines the tenant’s obligations in relation to noise (and other matters, such as waste disposal, compliance with relevant laws and having consideration for neighbours). Throughout the period of a tenancy, the landlord can manage a tenant only to the extent of their mutually agreed contract for living in the rented property – not a tenant’s activities in the street outside the property or in neighbouring streets. In the case of a noise complaint, the council would have to inform the landlord that the tenant was being excessively noisy. The landlord then has the right either to warn the tenant or to end the tenancy. If the allegation is false or disingenuous, how is the landlord to know? If the same allegation is made on more than one occasion, the landlord may end the tenancy based on an unproven allegation or because the council says that there is a problem. This does not solve the problem but rather moves it around the borough if the tenant seeks rehousing elsewhere in the area. The same applies to household refuse and antisocial behaviour issues. The tenant could be labelled as guilty without having faced a trial. Under the reference condition of selective licensing, a guilty judgement can be made without an accusation being tested by a court.
  2. The ending of a tenancy will be a way for a landlord to resolve an allegation of antisocial behaviour, even if it is malicious. This will not resolve the issue of high tenancy turnover; it will actually exacerbate it.
  3. Often when tenants are nearing the end of their contract/tenancy and are in the process of moving out, they will dispose of excess household waste by a variety of methods. This includes putting waste out on the street for the council to collect. We would be willing to work with the council to help develop such a strategy. One example is the Leeds Rental Standard, which works with landlords and landlord associations to resolve issues.

Negative impacts of discretionary licensing

  1. One of the dangers of the proposed continuation of selective licensing scheme is that the costs will be passed on to tenants. This would increase costs both for those who rent in Barking & Dagenham and for the council. The increased costs to Barking & Dagenham residents would particularly hit those most vulnerable and least able to tolerate even a marginal increase in their cost of living.
  2. The social housing sector has made many efforts to remove problem tenants (see table below). How does the council expect landlords to solve these tenants’ issues when the social sector has failed? Many of the tenants who have been removed from the social sector are now living in the private rented sector without any support. This selective licensing policy will have a greater impact on those people who are evicted from social housing, as they will not be able to access the PRS as they will fail the reference check (mandatory condition).

Mortgage and landlord possession statistics 2016[1]

Year (calendar)

Landlord type

Claims issued

Private*

Social

2016

54,583 (39.7%)

82,789 (60.3%)

137,372 (100%)

*includes all accelerated claims

Current law

  1. A landlord currently has to comply with over 100 pieces of legislation, and for many, the laws with which the private rented sector must comply can be easily misunderstood. A landlord is expected to give the tenant a ‘quiet enjoyment’ of the property. Failure to do so could result in a harassment case being brought against the landlord. The law within which landlords must operate is not always fully compatible with the aims of the council. For example, a landlord keeping a record of a tenant could be interpreted as harassment.
  2. Licensing is introduced to tackle specific issues. Many of these are related to tenants, and have been identified by the council. The challenge for local authorities is to work with all the people involved and not simply to blame one group – e.g. landlords. We are willing to work in partnership with the council to develop tenant information packs, assured shorthold tenancies and the accreditation of landlords, along with targeting the worst properties in a given area.
  3. We would also argue that a problem that is restricted to only a few poorly managed and/or poorly maintained properties would not be appropriately tackled by a licensing scheme applied to all – it is not proportionate. Especially as you have significant data from the first scheme. We would urge the council to look at alternative solutions. In many situations, the council should consider enforcement notices and management orders. The use of such orders would deliver immediate results. So why, instead, does the council wish to address it over a period of five years and through a licensing scheme? A targeted, street-by-street approach, working on specific issues in a coordinated manner with other relevant agencies, such as community groups, tenants and landlords, would have a much greater and quicker impact.
  4. We would also like to see the council develop a strategy that includes action against any tenants who are persistent offenders. These measures represent a targeted approach to specific issues, rather than a blanket licensing scheme that would adversely affect all professional landlords and tenants alike, while leaving criminals able to operate covertly. Many of the problems are caused by mental health or drink and drug issues. Landlords cannot resolve these issues and these issues will require additional resources from the council to resolve.
  5. In relation to the reduction of antisocial behaviour and the authority that landlords have to tackle such activity within their properties, it should be pointed out that landlords and agents can only enforce a contract; they cannot manage behaviour (NB: House of Commons briefing note SN/SP 264, paragraph 1.1). In most circumstances, the only remedy available to landlords who are confronted with serious antisocial behaviour in one of their properties will be to seek vacant possession. In many instances, they will need to serve a section 21 notice, rather than a section 8 notice, identifying the grounds for possession. The former is simpler and cheaper and repossession (at present) is more certain. No reason need be given for serving a section 21 notice and, in this case, the perpetrator tenant can hypothetically approach the local authority for assistance to be rehoused (NB: Homelessness Guidelines cl 8.2). Crucially, no affected party needs to offer evidence against an antisocial householder, thereby reducing the risk of intimidation, harassment and, ultimately, unsuccessful possession claims. The issue of antisocial behaviour will, thus, not appear as a factor in the repossession. However, when providing evidence to support a licensing application, the document should clarify the position of all the relevant issues under landlord and tenant law.