Official Report 492KB pdf
Item 3 is to take evidence from private landlord representative groups on the Housing (Scotland) Bill. I welcome John Blackwood, who is the policy and parliamentary affairs director for the Scottish Association of Landlords, and Sarah-Jane Laing, who is the director of policy and parliamentary affairs for Scottish Land & Estates. I also welcome Patrick Harvie MSP, who is joining us for this session. Adam Ingram will start.
Good morning. The Scottish Government’s vision for housing is that all people in Scotland should live in high-quality sustainable homes that they can afford and that meet their needs. To what extent do the bill’s provisions promote that vision?
I will kick off. From our perspective, there are some positive elements in the bill. In effect, it is about redress and access to justice, and it also introduces the potential for letting-agent registration. It will help the consumer to get redress, if they feel that they need to do so. Overall that can only increase the quality and standard of the physical condition and management of properties.
I support what John Blackwood says; we believe that the bill will help to increase standards and deliver on its aims. It is the next step in a long process that landlords’ organisations, tenants’ groups and the Scottish Parliament have been working towards for a number of years. As John Blackwood highlighted, a number of the bill’s provisions will help to deliver on the aims that we seek to achieve.
Good. My only other question is on the consultation process. Were you satisfied with the process? How did you participate? What are your reflections on the consultation?
The consultation process was very inclusive. We were able to participate as an organisation through the stakeholder group, but there were also a number of opportunities for individual landlords—certainly among our members—to participate. Over the past few years, there have been a number of routes for consultation on policy objectives and on particular provisions in the bill, so we are entirely happy with the process.
I would say the same. There are a number of things in the bill for which we have been campaigning for some years, so we are delighted that those things will eventually—we hope—be introduced in legislation.
The bill makes provision for transferring jurisdiction for certain types of civil court action concerning the private rented sector from the sheriff court to a first-tier tribunal. It would be useful first to hear about your experience of landlords taking civil actions through the sheriff courts, and any problems with access to justice. Secondly, do you agree with the proposal to transfer jurisdiction?
Our experience to date has been pretty unsatisfactory. We have provided a number of pieces of evidence to the Scottish Government and to Parliament in the past few years concerning the speed—or, rather, the lack of speed in consideration of cases. The lack of specialist housing knowledge in the court system has also been a huge issue for landlords, and there is a lack of confidence in the court system’s ability to deliver adequate outcomes within defined timescales
Again, I largely agree with that. The current system involving the sheriff courts is expensive, for a start, and very cumbersome. There are inconsistencies in decisions and it lacks expertise. We have been campaigning for a number of years for a specialist housing tribunal. There are already a couple of tribunal services in Scotland, which are respected and could easily be built on. Such a service would be more cost effective for the public purse and would provide better access to justice where that is required.
You mentioned cost effectiveness and better access to justice. Can you say a bit more about the potential benefits for tenants and landlords, from your perspective?
One of the main points concerns the speed of getting to the sheriff court in the first place. The process is very much a postcode lottery—it is based on where one lives—and many landlords and tenants alike feel that it is too adversarial. We need another system that takes a more holistic approach to dealing with the housing issues that are faced by landlords and tenants. A tribunal service would be much more appropriate, and mediation—which is already available in existing tribunal services—could be provided where that would be appropriate.
I agree with everything that John Blackwood has said. There would also be a financial benefit to landlords, especially in rent arrears cases. The time that is spent in court means that arrears continue to increase as one goes through the process. If the tribunal works as it should, there will be financial benefits for landlords because cases will be resolved much more quickly.
That is helpful. I have one further question. With regard to the licensing process for houses in multiple occupation, the bill will not transfer civil cases from the sheriff courts to the first-tier tribunal, but rather will give ministers an enabling power to do so at a later date. The Scottish Government has committed to consult further on the issue. What are your views? Are you open minded on the transfer taking place at a later stage?
We would certainly encourage it to happen, because it is important that the tribunal would deal with all private rented housing cases, including HMO cases. We believe that the reason for the decision is that the issue has not been consulted on, but we would have no problem at all with those cases being transferred.
I echo those thoughts; we would have no issues with the transfer being included in the bill. We would not want to wait until a later date; as John Blackwood said, we would like everything to be brought together.
Continuing on the tribunal theme, it has been suggested that the Scottish Government may provide support for people to access the proposed tribunal, possibly through legal aid or an advocacy service. Do you have any views on what the policy on access to legal aid and expenses should be? You already touched on the location of tribunals.
I believe that more work needs to be done on the cost benefits. Overall, the tribunal system will be cheaper for the public purse; we know that from experience of tribunals. Access is important, and the opportunity to use an advocacy service is even more important, especially for vulnerable tenants. Any system needs to have such provision built in. It would be for all users of the service—landlords and tenants. Where it is appropriate, people should be able to access any type of advice, support and information that they need.
I agree with John Blackwood. We do not want to create a system in which legal representation becomes the norm. It must be there for when it is required, but we do not want a system in which it becomes a business.
It has been suggested that there could be scope for the tribunal to charge a fee. What are your views on that?
That would depend on the fee, as you can imagine. A charging system is currently in place in the sheriff court system. We are open to looking at the issue in the context of the tribunal service, when it has been properly costed.
What is important is that we have an effective system. If it is deemed necessary to charge fees to ensure that the system operates effectively, we will not object to that.
We heard from Shelter Scotland and the Govan Law Centre that the tenancy regime in the private rented sector should be changed to give tenants more rights. What is your view on that?
The Shelter proposals are not just about giving tenants more rights; they are much more complex, when we look at them in detail. They are about making the tenancy regime work more effectively. I do not think that landlords’ representatives would argue with that; where we disagree with Shelter is on how to achieve such effectiveness. Shelter’s view is very much that we should remove the short assured tenancy and move to assured tenancy.
I concur with that. It is important that we get the message across that we support the current short assured tenancy regime. Research by the Scottish Government backs up the claim that both landlords and tenants feel that the regime is in their interests—there has been recent work on the matter. The Scottish Government is actively involved in reviewing the system and hearing from all stakeholder interests.
The witnesses represent organisations that want bad practice to be driven out of the sector, and I am sure that all stakeholders share that view. A concern is that even if the tribunal system works well, there is a big disincentive to raising issues in the first place. Someone who has a complaint but knows that they can be given a month’s notice to quit will not make that complaint. If you are not convinced by Shelter’s proposal on security of tenure, what would be a better way of removing that barrier and ensuring that people have the confidence to express concern and to challenge bad practice where it exists, without feeling that they will lose their home?
There is an issue to do with tenants getting used to the service and feeling that it is accessible to them. The current service is not publicised enough; tenants are not aware of it. I know that lots of tenants access the service after having been issued with notice to quit—the private rented housing panel is able to continue cases even when tenants have been given notice. The system needs to be used more, and perhaps that can happen if information, advice and support is given to tenants. Likewise, landlords need to have confidence in the service.
There may be no legal or financial barriers, but if someone still feels that they will lose their home, that is obviously a barrier that is very difficult to overcome.
It can be, but I question whether that is much of an issue for tenants taking their cases to the tribunal, because that is certainly not what I have seen going through the tribunals so far. Perhaps some people are put off before they even approach the tribunal, but I am afraid that we do not know that that is the case. I do not see much evidence of that at the moment. I am sure that it must happen, but the point is that we need a system in which people feel confident. I do not know whether security of tenure alone would address the problem.
I am sure, however, that I am not the only member who has had such concerns raised by constituents who I do not think are making it up. Thank you very much, convener, for the opportunity to ask the question.
Okay.
What are the witnesses’ views on the bill’s provision to allow third-party applications by local authorities to the PRHP to enforce the repairing standard?
We are wholly supportive of the proposals in the bill.
We think that the provision is a very positive step that would help tenants who feel disenfranchised in that respect. The provision would allow local authorities to take on their cases.
Is other action required to improve physical standards in the private rented sector?
Overall, improved enforcement of the existing legislation is needed. We see that as being the problem, largely. As we have said many times, landlord registration is not being enforced properly by our local authorities. That is often put down to a resourcing issue. Even with cases that are going to tribunals at the moment, is anybody really enforcing that regulation and taking action against a landlord as a result? We are not seeing that. We therefore need to ensure not only that people can access the legislative provisions that we have, but that the provisions have teeth and are properly enforced. That is a big issue for us.
Do you therefore agree with the Government’s intention to introduce at stage 2 a provision on enhanced discretionary powers for local authorities to designate enhanced enforcement areas to tackle poor standards in private rented housing?
Absolutely—we have no problem with that at all.
We originally suggested that approach a number of years ago in order to focus limited resources on problems that had been identified. We have no problem with the Government’s proposal.
Do you agree with Shelter Scotland’s suggestion that carbon monoxide alarms should be mandatory in all private rented properties in Scotland?
Yes.
Again, we have no problem with that. Electrical safety should be taken into consideration, too. Safety measures are recommended at the moment, but there is no legal requirement to have them. However, it is in everybody’s interest to ensure that properties are as safe as possible.
So, you would be quite happy for electrical safety measures to be made mandatory as well.
Indeed. We are on record as supporting that proposal.
Part 4 of the bill provides for the regulation of letting agents through the establishment of a register of letting agents, with the necessity for them to pass a fit-and-proper-person test. Do you agree with that general policy approach of a regulatory framework? If so, what benefits would that have for landlords and tenants?
We agree with that approach. The regulation of letting agents is long overdue. There was always a question as to whether this Parliament had jurisdiction to deal with the matter, so we are delighted that it is considered that it does and that the issue can be progressed.
As John Blackwood said, both organisations are on record as saying that we support the proposals. Landlords, as well as tenants, have suffered through bad practice by letting agents. We do not oppose the proposals at all. However, we have an issue with the definition of a letting agent. Under the terms of the Antisocial Behaviour etc (Scotland) Act 2004, a tenant farmer is deemed to be a letting agent for the head landlord. We do not want to impose duties on a tenant farmer—who, in reality, is not acting as a letting agent—because he is defined as an agent in another piece of legislation. We are talking about people who are performing a letting agent service on a commercial basis. It is those people we must target.
An additional issue is people who are acting as agents and voluntarily registered as agents through the landlord registration system who might be relatives of the landlord. An example would be a mother who is managing a property because her son is in the forces or working overseas, which may even be only temporarily, for a year. We need to look at whether that individual needs to be registered through the proposed scheme. They are not acting commercially. You could argue that that is part of their business and they are acting as the landlord, but where do we draw the line with agents and how do we define what an agent is?
A code of practice will be developed. Will some of the concerns that you have raised be covered in that code? Should that code include other elements?
All the issues to do with good practice, unfair fees and widespread bad practice are fine to cover in a code, but the issues with the definition must be dealt with through the legislation.
We welcome the consultation on the code to which the Scottish Government has committed. Our organisation has been looking at a range of things, such as whether agents should have professional indemnity insurance. That is the sort of thing that you would expect from a commercial outfit and which would be in the consumer’s interest. However, I question whether that would be appropriate in the case of a family relative who is managing a property on behalf of someone else.
What measures should the Scottish Government undertake to ensure that letting agents, tenants and private landlords are aware of the registration requirements?
It largely comes down to good publicity, to be honest. We had the same argument and the same issues with landlord registration. It is a bit easier with commercial firms, as letting agents are easier to identify—they tend to be more visible in our high streets and local communities, and they advertise their properties at some point, making them easier to access. Again, however, it is about ensuring that the information is proportionate and targeted.
Lack of awareness has been an issue with all new regulation for the tenancy sector. One of the issues has been the fact that we have a plethora of acts and new legislation of which there is a lack of awareness not just among tenants, but among landlords. The Scottish Government is to be commended for having spent a lot of time and effort in trying to raise awareness. The most success has been achieved where action has taken place at quite a local level. Scottish Borders Council, for example, really took ownership of the awareness-raising aspect and there were radio campaigns and campaigns within the letting pages of the local newspapers. That approach seems to have achieved much more success than nationwide campaigns. All of us in the sector have a role to play—it is not just down to the Scottish Government to raise awareness.
It is important to emphasise that agents, too, welcome registration, as they believe that it is a good, positive step in legitimising their businesses. Letting agents are not generally regarded by society as being the best of the bunch in providing a service to local communities, so those who are providing a good service welcome registration. We hope that it will distinguish them from others, and for the industry overall it is a positive step in legitimising what is already a very good service. We must make sure that it continues to be so and is seen to be so.
Do you think that the proposals will provide landlords and tenants with easy access to a redress mechanism that will help to resolve disputes between letting agents and tenants?
I think that it will, but as part of the system. If it was on its own, as a stand-alone measure, I would have concerns. However, if it is linked to the new tribunal, I think that it will.
Exactly. It is only a positive step. Who they feel they are contracting the service from is an issue for many tenants. They get the property from the landlord and the agent is the middle man, but the agent has not entered into any contract with the tenant. Tenants are not aware of that—nobody informs them of that and makes them aware of their rights and what they can do if something goes wrong. Equally, they could have a gripe with the agent as opposed to the landlord, just as the landlord could. Often, if the middle man does not communicate properly with both the landlord clients and the tenants of those landlords, that is where things start to go wrong. If there is a redress mechanism, at least experts can get round the table and have a really good look at the situation to see where bad practice is happening and how it can be stopped or changed.
There may be cases in which the mechanism to resolve disputes just will not do that. Should there be more penalties for rogue landlords and letting agents, to hammer home the point that they have to be up there with the best or we are not going to get any improvement in the relationship between tenants and landlords and improvements to the properties?
As John Blackwood has touched on, we do not need more penalties; we need more use to be made of the penalties that we have and more profile to be given to penalising that bad behaviour.
I think that that is true. We do not have any regulation for letting agents at present, so anything is welcome, but the point is that a number of bits of legislation are in place that are just not being enforced. There is an issue with the enforcement of that legislation and with its being publicised that it is being enforced. We could send that strong message to landlords and agents alike.
The issue about enforcement of existing legislation has come up two or three times. Is there room for the bill to do a bit more to achieve that, particularly in relation to the deposit protection system? I have honestly lost count of the number of tenants who have contacted me to say either that they are being denied information to which they are entitled—it has to be said that that is most often by a letting agent, but sometimes it is by a landlord—or that they have not been told whether their deposit has been protected. In many cases, people are told that they will have other charges or fees or so-called advance rent, but that that is not really a deposit, when it is a deposit in all but name. Apparently, the Scottish Government still cannot gauge the level of compliance with the deposit protection system. What could the Government do, through policy, the code of practice or the bill, to get the system working better and to prevent bad agents and landlords—I am sure that they are in the minority—from finding workarounds rather than complying with the spirit of the system?
There are a couple of points to pick up there. On the scale of compliance, I think that, at the outset, the Government overestimated the number and levels of deposits held in Scotland. At the time, we certainly made representations on that, because we had canvassed our members, and we knew that only about 50 per cent of them actually took deposits. However, when the Government looked at the sector as a whole, it assumed that the figure was much higher. That is why the Government is struggling to gauge the level of non-compliance. Similarly, the discrepancy in relation to the level of non-compliance with registration arose because the number of landlords in Scotland was underestimated.
Again, I concur. It is difficult for us to gauge the numbers. We still do not know how many private landlords are out there, and we are going on the basis of how many have registered. On the assumption that the majority have registered, we are saying how many have lodged deposits. Often, we come to the conclusion that all landlords take a deposit but, especially in rural communities in Scotland, we find that that is not the case and that deposits are not taken. It is always difficult to know that.
Yes, but it is pretty clear that some letting agents, including large and very professional ones, simply stop calling it a deposit and start calling it advance rent. Tenants find that they are in the same position as they would have been in previously, because in effect they have a deposit that is entirely unprotected.
Alternatively, it is called a management fee or something like that.
Advance rent is not a deposit, so I take issue with Mr Harvie on that. Advance rent covers only rent on a property and is not used for any deductions that a landlord could make for damage. However, I can understand the principle.
In some cases, it is used for that. If tenants are told that they will not be charged a deposit any more, but that their advance rent will go from one month to two months and when they leave they will get some of it back if they have not damaged the property, that is a deposit in all but name—it is a workaround.
Well, certainly, if landlords say that the tenant will get something back if there is no damage at the end of the tenancy, that is a deposit. I am talking about genuine cases of advance rent. In fairness, that happens and it has always happened; we should not automatically confuse the two. We argued that this would be a problem if tenancy deposits were brought in. We said that people would find a way round it. There will always be a way round it.
That is what I am asking. How do we stop that? How do we crack down on that kind of behaviour?
A good way could be through the new tribunals service. At the moment, it is not easy for tenants to take summary cause action through the sheriff court system. They are often not aware that they can do that. They could be made more aware of it through the tribunals service, if we get it right. It should be easier for them to access such a service. That would be a positive step, rather than having people take the cumbersome route of the sheriff court.
If they had the confidence to do it without thinking that they are going to lose their home.
Yes, although many who go through the system do not find that their deposit is not protected until the end of their tenancy. It is only when the tenancy comes to a natural end, or the tenant wants to move out, that they research everything and realise that the landlord or letting agent never lodged the deposit in the first place. Even beyond the end of the tenancy, the legislation is such that they still have three months to make a claim against their landlord.
We move on to discuss mobile home site licensing. Sarah-Jane Laing, your organisation’s response to the Scottish Government’s consultation on licensing of caravan sites indicated that it did not believe that the proposed licensing of mobile home sites would be the best way of preventing rogue operators from continuing to operate. Your organisation also expressed concerns about the fit-and-proper-person test for mobile home site owners, and about the three-year licensing period. Does your organisation still have those concerns and, if so, why?
Our concerns relate to the operation of landlord registration. They are built on our experience that the landlords who operate within the system and who are fit and proper are the first to register, and the first to reregister after three years, while the rogue landlords still have not registered. Our concern was that if a similar system is set up for mobile home parks, the ones that are already being run to standard will be the first to register and will already have reregistered before we have targeted the ones that need to raise their standards.
I have a fair bit of experience in this area and it seems to me that some local authorities are much better at registration systems and keeping tabs on mobile home sites than others are. To be fair, we are not talking about a huge number of sites throughout Scotland, so what are your concerns? The local authorities should know where their mobile home sites are and which have registered and which have not.
Certainly you would think that. When I worked in the local authority and private rented sectors, we knew where some of the bad landlords were. However, how the system was set up meant that it was hard for local authorities to target the resources where they were required. The focus was very much on licensing the landlords who came forward. It was the same during the first round of HMO licensing. I know that the number of mobile home sites is not the same as that, so, if the local authorities are convinced that they know where all the mobile home sites in Scotland are, we have no issue.
Do you have any comments, Mr Blackwood?
No, the issue does not come within our organisation’s remit, so we do not have a comment.
Sarah-Jane Laing, I suppose that this question is for you as well. What are your views on the enforcement provisions for proposed site licensing? You might have answered this question already: do you think that they are an effective deterrent to rogue site operators?
I think that the Scottish Government’s proposals do deliver. They refer to the term “the polluter pays” and the Government has developed a system of sanctions under which the person who is responsible and who should be sanctioned and fined will be.
Do the witnesses have any other general comments or anything to say about any aspects of the bill?
I have a comment to make about the costs and the impacts of the private rented sector tribunal. John Blackwood mentioned the costs of raising awareness and, when we look at the impact of legislation, we see that the costs of raising awareness are an important part of that consideration. I would also like some comfort that the cost of running a PRS tribunal in rural areas, and of allowing rural tenants and landlords to have access to the system, has been fully taken into account.
I want to add something about exemptions for letting agent registration. With the exception of the mother who is managing the property for her son, there should be no further exemptions. All agents who are operating on a commercial basis should be classed as the same.
Absolutely. Thank you very much. I suspend the meeting to allow the witnesses to leave the room. We have one more item on our agenda.
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