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Housing Bill to Stamp Out Criminals

Posted on 2015-10-29

This month the Government launched its Housing and Planning Bill 2015-2016, which includes a number of measures relating to UK housing, estate and letting agents, rent charges and planning and compulsory purchase.

Considering that the private rented sector now accounts for 19% of all households, it is unsurprising to see a number of initiatives which directly focus on landlords, letting agents and privately rented housing.

The Bill contains three main policies which are all intended to tackle any 'rogue' or 'criminal' operators within the industry.

Offending landlords and agents could be banned from letting property

The Bill proposes to make it possible for landlords or letting agents to be banned from letting property if they have a string of previous offences or convictions which equate to a 'banning order offence'.

If introduced, the rules would allow local housing authorities to request banning orders against a person who has been convicted of a banning order offence. The Housing and Planning Bill defines a 'banning order offence' as an offence of a description specified in regulations made by the Secretary of State.

The sort of offences these are likely to cover are things like violence for securing entry, eviction or harassment of occupiers, failure to comply with an improvement notice, failure to comply with a prohibition order, control or management of an unlicensed House in Multiple Occupation or control or management of an unlicensed house.

Once requested, and after a notice period, a tribunal will be tasked with deciding whether to make a banning order against the offending party.

They will be required to consider the seriousness of the offence and whether the person has ever been included in the database of criminal landlords and letting agents, all the while considering any previous convictions that person has.

Any banning order given out will have to last a minimum of six months, although exceptions will be made where a landlord does not have the power to bring a tenancy to an immediate end or a letting agent can not cease trading immediately.

If a banning order is breached, the responsible party could be imposed with a fine of up to £5,000.

Database of criminal landlords to be established

If the Housing and Planning Bill becomes law, a database of rogue landlords and letting agents would also be established. This is being referred to by many as a 'blacklist' of offenders.

The database will be updated and maintained by England's local housing authorities. An offending party may be entered into the database if they have been convicted of a banning order offence which was committed while they were a residential landlord or letting agent.

Authorities will have to make applications to enter landlords or agents into the database. Entries made must be maintained for the period of the banning order before being removed. Landlords will have to be notified if the authority makes an application against them and they will have the right to appeal.

The database will contain the entrant's address and contact details, the period for which they will be part of the database and the details of any banning orders or convictions currently in force or enforced in the past.

Rent repayment orders to be made against landlords

The third major proposition is one that will see rent repayment orders introduced and served against landlords who have breached a banning order.

Under these circumstances, the landlord may be required to repay rent paid by a tenant or pay a local housing authority a specified amount in respect of an award of universal credit handed out to a tenant by the authority.

A rent repayment order will also be determined by a tribunal after being applied for a by a tenant or housing authority. A repayment order will only be made in the event that the tribunal is satisfied that the landlord has let housing in breach of a banning order.

The Bill stipulates that the amount ordered to be repaid must not exceed the rent paid during the period of the offence and that when determining the amount, the tribunal must take the landlord and tenant's conduct into account, as well as the financial circumstances of the landlord.

Other things to consider…

Is this the end for selective licensing schemes?

The Housing and Planning Bill's proposals raise a few questions, one of which is over the future of selective landlord licensing schemes, which we have written about in detail here.

The Residential Landlords Association has pointed out that under the Housing and Planning Bill, local authorities will be able to use council tax registration forms to ask tenants for details of a property’s tenure and its landlord to help root out criminal operators.

They will also be able to garner information from the statutory tenancy deposit schemes to enforce regulations affecting private rented housing.

This means that, in theory, councils will be able to gather all the information about landlords they need without charging them for a licence.

Do these measures unfairly tarnish the industry?

The measures detailed above are clearly designed to rid the industry of criminals taking advantage of tenants – an intention which will be welcomed by all in the residential lettings industry.

One concern, raised by the Association of Residential Letting Agents (ARLA), is that the introduction of a database of rogue landlords, or blacklist, taints the industry as one that needs widespread reform.

“We urge the Government to ensure that this measure is applied appropriately so that entry to this database is based on well-defined criteria which does not vilify compliant and law abiding agents,” commented ARLA's managing director David Cox at the time.

What happens next?

This month's launch on October 13 represented the Bill's first reading in the House of Commons, the second reading will take place on November 2.

After that, there will be a report stage and then a third reading. The Bill will then be passed to the House of Lords where it will undergo another three readings as well as a committee and report stage.

There will then be a consideration of amendments stage before it is given Royal Assent, which is when it will become law.

So, there is quite a long way to go yet but in the meantime you can keep up to date with the Bill's progress here. You can also view the prosposals in full here.

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