Official Report 277KB pdf
Private Landlord Registration Modification (Scotland) Order 2005 (Draft)<br />Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/557)
Private Landlord Registration (Information and Fees) (Scotland) Regulations 2005 <br />(SSI 2005/558)<br />Private Landlord Registration (Appeals against Decision as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/559)
Antisocial Behaviour Notice (Appeal against Order as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/560)<br />Antisocial Behaviour Notice (Management Control Orders) (Scotland) Regulations 2005 (SSI 2005/561)
Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005 <br />(SSI 2005/562)<br />Antisocial Behaviour Notice (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/563)
I open the 28th meeting of the Communities Committee in 2005. I remind all those present that mobile phones should be turned off. We have received apologies from John Home Robertson, who is unable to attend.
We in local government were concerned about the proposals at the outset, because we could see what a big administrative task it was going to be to implement landlord registration. However, the Executive has been co-operative and consultative in its approach. We are almost fully satisfied that the Executive has taken our concerns on board and that the consultation has been thorough.
The Executive has been keen to ensure that the regulations have a light touch. Has that been achieved?
The challenge has been to have a light touch, while achieving the form of regulation that was envisaged when the amendments that introduced the registration scheme were made to the bill. That was a challenge for the Scottish Executive, but it has achieved the aim. I cannot speak for private landlords but, from the point of view of local authorities, the approach has as light a touch as I would wish in the circumstances. Given the scheme and the issue with which it deals, there could not have been a much lighter touch.
I must state that the view that I will express is not necessarily that of the Convention of Scottish Local Authorities; it is the view of Fife Council, as a contributor to the COSLA response. Fife Council has concerns about the light-touch nature of the regulations, particularly with regard to the fit-and-proper-person test. We feel that onerous duties are being placed on the council, that the competence tests go beyond what should be covered through self-certification and that the landlord will still be in the position of power in the relationship between landlord and tenant. A person who is included on the council's register of private landlords will be regarded as council approved, which may expose the council to an unfair risk should problems occur subsequently.
Several of the issues that you raise will be covered by members during our questioning.
Mr Muir, when you say that all owners of property that is subject to let should be approved and registered, what type of property are you talking about?
I am talking about owners of property that is subject to private let.
Are you talking specifically about housing property, or do you mean commercial property, too?
I mean housing property.
So you disagree with the exemptions.
We have a range of views on the exemptions, most of which align wholly with COSLA's response, and I suspect that they could be drawn out through discussion.
Are you satisfied with the list of exemptions? Should there be more of them or do you believe that some of those who are exempt should not be?
COSLA is comfortable with the exemptions that have been set out. I am not sure what the Fife perspective is, but COSLA is satisfied.
We accept that holiday lets are exempt, pending further information being made available. We are looking for a timetable to be set for that information to be gathered. Ultimately, we would like holiday lets to be incorporated into the registration arrangements. Where I come from in Fife, a number of the holiday lets quickly translate into mainstream lets between September and May, so we do not wish holiday lets to be treated any differently. We would also like properties linked to employment to be incorporated fully into the scheme.
I understand that the Executive decided to exclude holiday lets from registration until further evidence had been gathered. We have heard Mr Muir's views about that, but do COSLA and the other councils share Fife's concerns about holiday lets?
We share concerns about exemptions overall. When one class of property is exempted from a registration scheme, that could be perceived as being disadvantageous to those property owners who are brought into the scheme. We have to remember that a brand new regulatory scheme is being introduced that will catch in its net the vast majority of landlords in Scotland. Local authorities do not have a difficulty with administering the scheme for those landlords who are not exempted, but we want to monitor the effect that the exemptions have on the overall scheme and review it at the end of three years.
From Edinburgh's perspective, I agree with my colleague that we are looking for some timescale to be set out by the Executive for a review of the exemption for holiday lets.
The act and the regulations allow the Executive to give the power to local authorities to give advice to landlords. Is the advice and information that the Executive envisages will be given by local authorities adequate?
Although the regulations state that the advice given and the finance raised from fees must be confined to what is required for the purposes of administering the registration scheme, which is right and proper, there will obviously be pressure on local authorities to deliver a more comprehensive advice service. For example, the possibility has been raised of providing advice to tenants via the address list that we will acquire as a result of the registration scheme. There will be no finance for that from the registration scheme, so the question arises how local authorities will be able to respond to the demands that will be made to deliver more comprehensive advice.
Do local authorities give advice to private landlords at the moment?
In Edinburgh, we provide a range of information to tenants and landlords and it is quite a resource-intensive undertaking. We would welcome some consideration of additional resources for that. We would provide information to tenants and landlords in the form of model leases, training programmes and so on. However, it takes a lot of staffing and resources to do that.
But you do that anyway, so the regulations should not put much of an extra burden on local authorities.
What we do at the moment is in a limited capacity. The potential numbers of landlords and tenants to whom we would have access through the new regime and any other actions mean that additional resources would be required.
Most advice and assistance will be common sense, and people would rightly expect a local authority that is administering a scheme to provide advice and assistance. However, at the moment, we do not provide detailed advice and assistance to people who are subject to enforcement under the regulations. What I am referring to is more than the broad advice and assistance that would be given to a private landlord operating in a regulatory regime; it is the advice and assistance that we are required to give if we serve notices on the landlord, or refuse or revoke their registration. The service that we want to provide to landlords would be resource intensive because the whole purpose of the regulations is not to prosecute and penalise people but to bring them back into line and get them to operate as responsible landlords. We feel that it is important to put the resource into providing such a service.
Mr Muir, I did not pick up your point about disclosure checks. Are you suggesting that every landlord should go through the disclosure check process with Disclosure Scotland? I might have misunderstood what you were saying. How many pieces of paper do we need landlords to obtain? There has to be a certain proportionality in our regulations. Forgive me if I misunderstood what you said. Could you amplify the point that you made earlier?
There is no misunderstanding. Fife Council is asking that disclosure checks are undertaken on landlords. We are concerned that the information that is currently required for registration through the self-certification process is not enough. The onus is being put on the local authority to use its own resources and those of its partners to check whether there is any failure to disclose accurate information on the part of the landlord at the point of registration. That is an extremely time-intensive and onerous task for the local authority and if it is not properly undertaken, it could leave the council exposed if there is subsequently a problem with the landlord. It might even leave the council liable for its actions in approving a landlord. Certain tests should be incorporated as standard, and the Executive should regulate for them. A disclosure check is one of those tests.
Is that COSLA's view or is it just the view of Fife Council?
It is not a common view in COSLA.
It is not the view of COSLA. COSLA's view is that the system needs to be kept as administratively simple as possible. Naturally, different local authorities have different perspectives. Particularly in Glasgow and Edinburgh, the private rented sector is large and dynamic. In Glasgow it has been growing at the rate of 2,000 a year. We know that it will be a big job keeping the registration exercise manageable for both sides. We do not want to complicate it unduly or do anything to obstruct the growth of the private rented sector, which is playing a constructive role in regenerating the city.
There is a view, to which I do not necessarily subscribe, that we all ought to be disclosure checked, because people are calling for disclosure checks for virtually everything these days. However, Disclosure Scotland is having difficulty coping as it is, so to hear that landlords would all have to be disclosure checked is something to comprehend, particularly given the numbers of landlords that may have to go through the process. It is an interesting view, but I do not share it.
I will pick up on that briefly. To an extent, I see where you are coming from, Mr Muir, but the concerns about the pressure on the disclosure system are serious. Would having the facility to require a disclosure check when there was reason for concern about an individual go some way to addressing your concern?
That would go some way towards addressing the concern. The other issue that we ask the Executive to consider is whether it could specify in clearer terms the aspects of the information that landlords are required to submit and certify to that are subject to follow-on checks and those that are considered more straightforwardly acceptable on a self-certified basis. That would help to bring a degree of consistency to the national position and would help to overcome some of Fife Council's concerns.
Information is one of the major issues that tie in with resources, bureaucracy and the time that councils will have to give to this. Many of you mentioned the light touch in your opening statements. What is needed is a balance between the light touch and getting sufficient information to weed out rogue landlords. I will continue with Euan Robson's line of questioning, while not repeating anything. We have been informed that a local authority can ask an applicant for a standard disclosure. As things stand—forgetting the idea of everyone needing a disclosure check—what is your understanding of the circumstances under which you could seek a disclosure check?
It is important to realise that a local authority has sources of information other than the form that comes in from the landlord. There is quite a high level of interest among elected members in the registration scheme in Glasgow, as a small minority of tenancies are giving cause for concern. It is unlikely that a disclosure check would be asked for, except when some other reason has come to light why registration should be queried—that is, if the property is causing concern to complainants, who may be the police or a local community council.
Is the current system capable of delivering that information to you in circumstances in which you may seek a disclosure check? Do you have access to sufficient information?
Yes. The arrangements that are set out in the regulations are satisfactory and will enable us to follow up concerns.
Does Mr Muir agree with that?
We remain concerned that the council will be exposed to the risk that at a later date it will be perceived that it would have been reasonable—what is "reasonable" is difficult for a local authority to define—for the council to have followed through and requested a check against the self-certified information. I agree with my colleague that a council, through its own resources and those of its partners, has a significant array of sources of information on which it can call. However, there are issues regarding the ways in which the different sources of information communicate with one another and can be relied on to throw up the right information at the right time, which is at the point of registration. That is a difficulty for us.
Scott Barrie will address the issue of fees, so I will not stray into that area.
I am conscious of the fact that the views that have been expressed by colleagues in COSLA differ in their emphasis. Fife Council has expressed the view—to COSLA and to the Executive, through the consultation process—that there are risks associated with directors of companies operating their landlord business through agents. We do not think that it is unreasonable, in addition to the measures that you have outlined, to ask the directors of companies to be incorporated into the registration framework.
Cathie Craigie has given the example of some people in her constituency who have earned money through selling drugs investing in properties and renting them out. They are not what we would call good landlords. Are you saying that the statutory instruments that we are considering today will not stop that? Are you saying that there is not sufficient information to weed out the landlords whom we are hoping to weed out, who exploit vulnerable tenants? Do you want further information to be made available in addition to what is required in schedule 1 to SSI 2005/558?
I refer back to my previous statement. We would like the owners of property and the directors of companies—notwithstanding how they manage their landlord business—to be incorporated into the registration framework.
In other words, you are saying that we are not achieving what we are setting out to achieve. You are saying that the information that we have may not be getting at the people whom we are attempting to get at.
Yes.
So you are saying that we are not achieving our objective. You are saying that there could be an agent or front man who would act for a company that has earned its money through illegal means, and the people behind that company can stand back and have the operation done by an agent without us being able to get at them.
That is Fife Council's view, but our view—in emphasis, anyway—is at variance with the view submitted by COSLA.
Your answer has been helpful. It is a matter of concern and we have to think about achieving balance and about how light a touch we want to have.
Before we move on, we need to be clear that that is the view of Fife Council. Do any of the other council representatives take a different view from that which has been expressed by Mr Muir?
We do. It is a question of what level of guarantee a local authority gives to the public in granting registration. It is important that people understand the process. We cannot guarantee that nobody will give us false information and acquire a registration that we would not otherwise have given. However, I reiterate that most of the information that will trigger refusal of registration or deregistration will come from knowledge about what is happening in specific properties. A case would be taken from there and all the relevant information would be acquired starting from that point, going into what the landlord did and did not disclose. We would then decide what further information we need about the landlord. We do not foresee any particular difficulty in carrying out that process in Glasgow, based on the regulations that the Executive has drafted.
City of Edinburgh Council supports that position.
Offences are only a small part of the fit-and-proper-person test. There is a lot of other information that a disclosure check would not divulge to us, and to require a disclosure check of the vast majority of landlords—who are law-abiding people who run businesses renting out property—would be to use a sledgehammer to crack a nut.
As Mary Scanlon did, I want to explore the fees in the registration scheme. The Executive's intention is that the scheme will be self-financing. Will it be?
The intention is that the scheme will be self-financing, but it is clear that it cannot be self-financing from the outset. If it is to be self-financing, it will have to be dependent on fees from registration. A huge amount of preparatory work will have to be done before we will receive a single penny in fees, so start-up funding from the Scottish Executive will be essential.
Is that a common view?
The City of Edinburgh Council agrees that fees for landlords need to be kept at a reasonable level and that the knock-on effect on tenants should be minimised. However, it is essential that local authorities be supported and that resources made available to implement the scheme. As my colleague Robert Steenson indicated, a lot of work is required before implementation, including gathering of information and assessment prior to registration of landlords. That work is resource intensive, so we are keen for the Executive to support local authorities on the matter.
On consistency, there is unlikely to be a flat-rate fee. Local authorities will determine their own fees within the framework that has been set. COSLA says that the fees must be seen to be fair to large landlords and to small landlords and between neighbouring local authorities. Will the framework help us to achieve that, or should it be more prescriptive?
The biggest problem is that there are a number of uncertainties, particularly about revenue. On the cost side, it is not too difficult to work out a reasonable level of staffing and a reasonable cost, but the revenue that will come in from the fee structure is more unpredictable.
Mr Steenson, when you responded to Scott Barrie you said that the scheme will not be self-financing in the first three years. The Executive has been in discussions with local authorities about meeting the start-up costs. Did those discussions take into account the first three-year period?
Yes. The grant that the Scottish Executive has alluded to is to cover the first three-year period. In the main, the discussions have been about start-up costs and, latterly, about funding to cover the uncertainty of the 75 per cent discount fee. We are in discussions with the Executive about that, but we have had no discussions about the level of support that we will get for start-up costs or for the costs that we cannot reasonably estimate over the initial three-year period. As has been stated by both my colleagues, it is essential that we keep the registration fee as low as possible. However, we also have to ensure that we can cover the costs to each local council. The scheme has to be set up to be self-financing. We certainly want the Scottish Executive to ensure that the uncertainties are covered, and not to expect us either to include them in the budgets of individual councils or to pass them on to landlords in the first three-year period.
Do you have any concerns that the fee structure as proposed may disproportionately affect some types of landlords, or will it adequately encompass the vast range of different landlords in Scotland?
The fee structure has been set to get as small a principal fee as possible. The fee will then be built up based on the number of properties a person has, which should minimise the impact on smaller landlords. A large principal fee and a small fee for property would unfairly penalise the smaller landlords. The fee structure goes some way towards addressing such issues.
I support my colleague's comments. The initial concern was that a high principal fee might discourage landlords from coming in to private renting. The Scottish Executive has been able to strike a balance that we hope will encourage landlords still to come into the market.
Other schemes that local authorities have to run for licensing regulation are self-financing. Why should private landlords be treated differently from other people who are in business?
I think that we are agreed that in principle they should not. We are just saying that the uncertainties of running the registration scheme mean that it is quite difficult to change the theoretical objective at first try for the first three years.
I move to the part of the regulations that will give local authorities powers in dealing with penalty notices as a result of registration or antisocial behaviour. Are the obligations that will be placed on landlords clear and appropriate? Do the proposals ensure that adequate support will be given to tenants who may be involved in the appeal process, particularly tenants who find themselves financially excluded?
The provisions in the regulations place a fair amount of responsibility on local authorities to ensure not only that they assist the landlords but that they assist the tenants of those landlords whenever we impose some form or regulatory control. From our point of view—and that of the working group that has been considering the registration schemes—action in respect of a rent penalty notice, for example, would only be taken after consultation of all the agencies that deal with housing benefit and debt advice. The effect on the tenant would also be considered carefully, because imposition of a rent penalty notice can be as much of a penalty on the tenant as it is on the landlord. No one would treat that lightly and no one would consider that the regulations were too onerous in the burden that is put on councils to advise people, to give them direction and to put them in touch with all the relevant agencies before that action was taken.
We have no idea whether the rent penalty notice will be at all effective in cases where the tenant is not receiving housing benefit. In such cases, it would be up to the tenant to withhold the rent from the landlord. Although the notice would say that no rent was payable, it would not automatically follow that the tenant would withhold the rent—some tenants might decide that they do not want to get involved. Most of the concern about the position of the tenant relates to tenants who are receiving housing benefit and whose housing benefit will be cut off. As soon as the notice goes out, housing benefit is cut off and the tenant is in the thick of a conflict. Local authorities recognise that in such situations they will have considerable responsibility to advise and support tenants. The scenario may play out completely differently in cases where housing benefit is not involved.
As Mr Steenson said, that situation is a long way down the road. The issue would have to be serious before a council would press for a notice to be issued. I presume that it would give the tenant advice on how they should proceed, so that the tenant supported the council's action.
It would depend on the reason why registration was being withdrawn. A person might have such a bad criminal record that it was felt that they could not be registered, although their tenancies were not giving rise to problems. A tenant might be unaware that the landlord had a criminal record and might be wondering what the action was about. In such a situation, the tenant would have to be given quite different advice from that which would be given if they were the subject of complaints about antisocial behaviour and so on and were about to lose their housing benefit. Diverse situations could arise.
I am sure that we will want to discuss that with the minister when he or she gives evidence in a few weeks' time.
I will say my piece before I hand over to my colleagues. There is a weakness in the regulations as drafted. Glasgow City Council suggested that, in the circumstances that you have described, the proposed national rent deposit scheme should be used as the repository for rent payments. That scheme would include all the administrative structures and procedures that would be required to hold rent securely under guarantees. It is unsatisfactory that there is no clear way in which the tenant will be protected from a situation in which they run up a lot of debt and have considerable subsequent problems.
I will throw another question at you. You are all experts in housing. The Scottish Executive is telling us that there will be difficulties, but we do not yet know what they might be—we will question the minister. How could you work a scheme whereby a third party held the rent?
Tenants would have to co-operate in such a scheme—a tenant could just refuse to pay their money into the scheme. Ideally, we would offer the tenant an easy system for depositing the rent, so that they would not notice anything happening. It would be awkward and expensive for each local authority to set up some kind of fund or trusteeship to hold rent in the circumstances that we are talking about; there would not be many such cases. We cannot see why the national rent deposit scheme should not be used. It would be an open door. It is, as they say, a no-brainer.
There is scope to interpret the parameters of some management control orders. Are you content with the definitions in respect of improvements to bring a house to the tolerable standard? I want to hear your preliminary views on that before I ask you a few more questions about the tolerable standard.
We had a bit of debate about the tolerable standard. It is simply an option for the local authority to bring a house up to the tolerable standard. That has been included to avoid a situation whereby the local authority has responsibility for a property but is operating it in a condition that is not acceptable to the public. In such circumstances, the regulations give the local authority the option to raise the house to the tolerable standard.
That is intriguing, because the Housing (Scotland) Bill will be debated at stage 3 tomorrow and the time to lodge amendments has passed, so I am not able to address your point specifically.
It is right and just for local authorities to have the power to bring a house up to the tolerable standard, which is, after all, a minimum standard. As for the example that you highlighted, the council would not be required to replace the central heating system. Instead, it would be required—quite rightly—to make the system safe, which might mean decommissioning it, and then to provide a different form of heating such as space heaters in a room. It would simply bring the house up to a minimum standard in order to make it habitable.
I agree entirely that you must be able to recover costs and that you are required to raise the house only to the minimum standard. However, do you believe that—how can I put it?—the definitions not only give you flexibility in certain circumstances, because after all each situation is different, but ensure that you are not drawn into refurbishment issues? In other words, are the definitions sufficient to ensure that there is little ground for dispute over what a council has or has not done in a house?
The definitions are certainly sufficient at the moment. After all, the landlord can challenge our decisions, because we cannot carry out works without his knowledge or without providing him with information about what we intend to do.
I do not know whether it is just me, but I am getting confused about the whole subject. We are discussing management control orders that are made under antisocial behaviour legislation. The authorities can apply for a management control order only when a landlord fails to comply with an antisocial behaviour order. Given that the management control order is expected to last for only 12 months, is it reasonable to expect the local authority under the terms of the order to carry out repairs in such a short time to bring a property up to the tolerable standard?
The order will last for 12 months, so, no, I think—
The thrust of my argument is that the issue centres on antisocial behaviour, not on the standard of a property. Other legislation will deal with the latter issue. Is it reasonable to use a management control order made under the terms of antisocial behaviour legislation to improve radically the standard of a property?
First, I should say that we think that the regulations have been correctly drafted and that we need them. As you say, the object of introducing management control orders is to deal with antisocial behaviour. However, if the local authority is responsible for managing the property, it cannot be open to criticism that it is running a totally unsatisfactory property. We cannot run substandard properties, except in circumstances that are clearly beyond our control. If we are responsible for a property, we must take reasonable steps to make it reasonably habitable. That is why there are such provisions. In practical terms, I do not think that we foresee any difficulties in operating them.
I am sorry to dwell on the point, but the Executive's note on the regulations states:
Yes. We do not think that there will be many disputes. We must see things in context. Unlike many other local authorities, Glasgow City Council still has a substantial number of properties that are below the tolerable standard anyway, so nobody is expecting everything to be dealt with overnight.
Is the range of actions that local authorities can take to recover costs under the Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005 sufficient to address the nature of antisocial behaviour?
COSLA's general view is that the range of actions would be sufficient to recover costs, particularly with the local authority providing professional witnesses, for example. The provisions would be reasonable if a landlord was not providing assistance to the local authority.
You believe that recovering costs through the normal debt process is okay.
Yes.
I have questions about the Antisocial Behaviour Notice (Advice and Assistance) (Scotland) Regulations 2005. Will the advice and assistance that it has been proposed should be provided to landlords be sufficient to allow them to address antisocial behaviour before there is an obligation on, or the need for, a local authority to introduce an antisocial behaviour notice?
I think that the answer to that question is yes. Before a local authority serves a notice, the regulations put an obligation on it to work with and try to advise and assist the landlord. Any responsible local authority would do that anyway, so the regulations merely state what our good practice should be.
I agree with the comments of my colleague in that most landlords with particular problems whom the City of Edinburgh Council has approached have been keen to be provided with information or to attend any training sessions that we might be able to provide. There is a commitment that, in the majority of cases in which the local authority provides support, landlords will benefit from having access to that support.
In my experience, the antisocial behaviour unit in North Lanarkshire is highly effective, so I assume that it would have the capacity to provide effective assistance to private landlords when antisocial behaviour issues arose. If North Lanarkshire Council had sufficient capacity to do that, would COSLA say the same about all Scottish local authorities?
If we are talking about capacity, the first point of contact for a landlord in that position would probably be the team that deals with registration, which would give the landlord advice on properly managing their lets. North Lanarkshire Council would have sufficient capacity to deal with cases involving antisocial behaviour. Most councils have antisocial behaviour teams that are dealing with rogue landlords at present, without the back-up of the proposed regulatory regime, so I think that the new regime will bolster the action that councils are already taking.
I think that Tricia Marwick has some general questions.
They are about holiday lets, which I dealt with earlier. Are you content that the subject of holiday lets will be left to consultation or do you think that there are issues that need to be addressed in the short term?
COSLA's view is that we are satisfied that there will be a review of the holiday lets situation and that any loopholes that might be created by their exemption will be closely monitored. Local authorities will assess whether landlords are using the definition of a holiday let to avoid registration and will report back. If there are any antisocial behaviour aspects to such practice, they will be monitored and reported on, too.
The panel has suggested ways in which the regulations could be improved. However, the committee and the Parliament can only agree to the regulations or disagree to them. From your experience, do you think that it would be better to agree to them now and have the review in three years or to hold out to have the minor amendments made?
The concerns that we have are probably not about the wording, so we would support the regulations and urge the Executive to continue to be as good as it has been up to now in listening to and responding to our concerns. We emphasise that implementing the registration scheme will be an on-going problem. The scheme will not be signed and sealed simply as a result of the completion of the legislative structure; that is when the implementation problems will start. We will need continuing support from the Executive.
In most cases, the devil is in the detail. The detail will emerge in the guidance that is provided to local authorities on how to apply the regulations. It is important that the Executive should acknowledge that by ensuring that the guidance is clear and explicit and that it takes on board the comments that we have made today.
Shelter Scotland has suggested that the guidance should clarify the relationship between the private rented housing panels and local authorities. What is your response to that? Do you share Shelter's concerns?
There is some concern about the matter. We will need to liaise closely with the panels because, in instances of disrepair in which health and safety are involved, local authorities will still have some powers to take immediate action. There is certainly an issue about routeing—we do not want a situation to arise in which tenants go through the lengthy and complicated process of going to the private rented housing panel when they could get immediate action from the local authority. Excellent signposting will be necessary, which will involve the panel and the local authority working together closely.
I thank the members of the panel for attending today's meeting and for the evidence that they have given to us, which we will reflect on before the minister appears before us on the same subject. I suspend the meeting to allow for a changeover of witnesses.
Meeting suspended.
On resuming—
On our second panel of witnesses, we have: John Blackwood, director of the Scottish Association of Landlords; Brian Adair, chairman of the Scottish branch of the Association of Residential Letting Agents and the chairman of its national council; Sarah-Jane Laing, the housing strategy officer for the Scottish Rural Property and Business Association; and Mike Stimpson, the chair of the National Federation of Residential Landlords. I thank them for joining us this morning.
Yes.
It has been said by the Executive and by those who have expressed an interest in this area, including our last panel of witnesses from COSLA and individual councils, that it is important that the regulations are not overly onerous and that there is a light touch. Has that light touch been achieved?
No. The last panel described the scheme as onerous and as requiring extensive staff time and resources. That demonstrates that the light-touch approach that the Executive intended to take has not been achieved.
Members of the panel might have said that there will be resource implications for local authorities, but that does not mean that there will not be a light touch in how the regulations operate for the private rented sector in Scotland.
The sanctions and the proposed fee structure in the regulations and the guidance cannot be referred to as having a light touch either. The SRPBA has always contended that landlord registration and regulation was to have a strict aim and that a light-touch approach would address that. I do not think that having a mandatory register with severe sanctions for non-compliance can be viewed as being a light touch.
In the opinion of the National Federation of Residential Landlords, a light touch would involve dealing with problems, not with everyone. If we are talking about issuing 100 antisocial behaviour notices a year and registering a minimum of 40,000 landlords, in no way is that proportionate or a light touch.
Will you expand on that? I cannot understand why you say that the approach is not a light touch. Is it because there is a fee attached to it?
There should be a fee, but the proposed fee structure does not reflect a light touch, especially the supplementary fees per property.
How much are they?
The supplementary fee is 20 per cent of the principal fee, so it depends on what the principal fee is.
What is your idea of what the principal fee would be?
If it were, say, £100, each supplementary property would have a fee of £20. Some of our larger members, who might be involved in accreditation schemes, have 350 or so properties, which means that they will pay quite a substantial fee.
Constituents of mine who are bothered by the fact that they are unable to find out who a private landlord is and who know that the private landlord is getting something like £375 a week in rent would say that even £100 or £150 a year is not a lot to ask a landlord to pay to enable us to police the private landlord sector better.
That goes back to a point that we made during the consultation process. If there are specific problems in specific areas, a selective licensing approach could be taken. That would be a light-touch approach because it would concentrate on areas in which bad landlords exist. A tougher line could be taken against them and a lighter touch could be taken throughout Scotland.
I see the regulations as giving private landlords protection from the rogues who are dragging everyone down. In the area that I represent, people see private landlords as a beast that they want to drive out of town. We have been unable to make rogue landlords—who I accept are in the minority—comply with their obligations under the existing regulations. The regulations will give us a way of doing that, but your organisations feel that having to pay £100 or so every two or three years is heavy handed.
That is not what I said at all.
That is how what you are saying comes across.
I apologise. Perhaps I should go back and answer the original question, which was to do with whether I view the approach as being a light touch. As I said, the representatives of local authorities said that the approach was onerous and will use an extensive amount of staff resources.
Obviously, you have given your view that the approach is not light touch. That is your answer to the question that we asked. However, I think that you heard only part of the evidence that the previous panel gave. I point out that, when the representatives of COSLA were asked a similar question, they did not at any point say that they did not believe that the approach was a light touch. Later, they said that they had concerns about the burdens that it would place on local authorities, but they did not say that they did not believe that the regulatory burdens were a light touch. They said that they believed that the Executive had got the approach right. You have a legitimate right to disagree with that, but you do not have a right to put words into the mouths of a previous panel of witnesses. We need to clarify that point and to get it on the record.
The concept of a light touch has been lost when it comes to allowing local authorities to interpret the conditions for their registers. Landlords throughout Scotland who have properties in different authorities tell us that they will have to jump through many different hoops in different authorities simply to register. The line is blurred on the issue of a light touch. The measures come across as being onerous; whether they will be at the end of the day has yet to be seen, but that is the concern, and we must reflect it.
On the Executive's figures, we are talking about 100 antisocial tenants out of 170,000 tenants, which is about 0.04 per cent, and, one presumes, the figure will decrease when the legislation begins to bite. Given that figure, we suggest that a light touch is required. We sympathise with the problem of landlords who are difficult, but the local authorities will likely know who they are. Therefore, it seems unnecessary to go into landlords' backgrounds in terrific detail.
I think that you will find that local authorities often do not know who the landlords in their areas are, which is one reason why the regulations have been produced. The committee will have to take a view on whether that is the case.
I want to ask Mrs Laing about landlords who have multiple properties. Intuitively, I know that some landlords will have two or three properties, but how many have more than 50? I am thinking of rural communities, where the bill for a registering landlord might not be as high as one would expect because a number of their properties might be exempt if they are holiday cottages or tied cottages or houses. Can you give us a sense of how many of your members have multiple properties that will qualify and of the scale of the bill for them?
No. One of the prime benefits of the landlord registration scheme is that it will give us a much better handle on the scale of the portfolios that landlords hold throughout Scotland. Information on the private rented sector is not available at present; the provision of such information will be a benefit of the scheme.
So there is a benefit in registration. The fee element is a difficulty, but it does not detract from the necessity of having a scheme.
Yes.
There seems to be a view that the cost of registration is the matter that concerns many landlords, but it is not the only one. Where possible, that cost will be passed on to tenants. That must be clearly understood and has been explained. However, the regulatory impact assessment makes no comment on the effect of complying with the regulations—such as the work that will be required on application forms—nor does it compare the measures with what happens in England and the rest of Europe. Landlords who invest in property do not generally invest in a particular place; they look for a good return and a good atmosphere. The message that is coming from Scotland will not create such an atmosphere. The issue is about not just money but what the regulations will require landlords to do. They will have to register as a fit and proper person before they buy a property in Scotland while, in many other areas, that will not be necessary. People will not turn to Scotland to invest. The issue is whether the committee wants that to happen.
Do you predict disinvestment, in that case? What will all the landlords in Scotland do—migrate? Will there be no rented sector? What are you implying?
Many landlords in Scotland will have to comply with the regulations, and they will still be landlords in Scotland. However, if you wish to encourage new landlords, better landlords and buy-to-let investors, the regulations in Scotland should be no more onerous than they are elsewhere in the world, particularly in Europe. They should be fair, reasonable and proportionate.
The committee must judge, Mr Stimpson, whether the regulations are reasonable and proportionate and what is in the best interests of the people of Scotland. After all, that is why we are democratically elected by the people of Scotland and why we sit here today. I also ask panel witnesses to respond to the questions, because that will allow the committee to consider the matter effectively.
I thought for a moment that we were returning to the arguments about the legislation—it is a fact that a registration scheme will be required. We are discussing now the regulations that will put that into effect. Is the panel satisfied with the types of properties that the regulations exempt from registration?
We have considered that in depth, and we consulted on it a lot as part of the working group. We feel that the provisions are adequate at the moment. However, landlords in rural communities in Scotland have different issues, such as agricultural tenancies. The Scottish Rural Property and Business Association might be better versed in that. There are some discrepancies, but we concur with the previous panel, which felt that the provisions should be left as they are.
I feel that the regulations have addressed the agricultural tenancy issue, which was raised during the consultation. Possibly some authorities will need further guidance to identify which tenancy is which. Obviously, the agricultural holdings tenancy laws are not always known to housing professionals, and further guidance on that is needed.
Have any groups been excluded that you would have liked to have seen included? I am thinking particularly of holiday lets. That was an issue for the previous panel. Do you have any views on that?
Originally, we were concerned about holiday lets being excluded, for a number of reasons; we are conscious that a lot of private landlords invest in property to provide holiday accommodation, especially in built-up areas such as Edinburgh. There are numerous reports from dissatisfied neighbours about rowdy parties and stag and hen parties, which are becoming more common, particularly in Edinburgh. However, on consultation, we felt that those periods of tenancy—or occupancy, if that is the best way to perceive it—are very short and the accommodation is not the tenant's principal home. Negotiation, perhaps with the local authority and the particular landlord, might address that situation; including such properties in the registration scheme might not work.
So you are quite happy that holiday lets are excluded from the regulations. The Executive will consult further and you will make your views known during that consultation period.
Exactly.
We believe that the exclusion of such groups is necessary to ensure the introduction of a reasonable registration scheme that does not apply to a greater range of properties than is necessary at the first stage. Therefore, we are in favour of the Executive's recommendation.
I have no wish to reopen the discussions about whether the Parliament was right or wrong to pass the legislation—which I supported—but I want to ask about the place of the registration scheme within what is now the Antisocial Behaviour etc (Scotland) Act 2004. As the committee discussed at the time, registration has the purpose not only of tackling extreme forms of antisocial behaviour but of providing other, wider benefits. I think that the Scottish Association of Landlords agreed with me on that point at the time.
I agree that discrimination is discrimination regardless. That certainly needs to be taken into consideration in the regulations.
The National Federation of Residential Landlords has noticed that a number of the accreditation schemes that have been introduced in Scotland require a landlord not to discriminate against those who receive housing benefit. That means that landlords cannot refuse a housing benefit tenant accommodation if that tenant is suitable in other respects. We believe that housing benefit has nothing to do with discrimination and should not be included within such schemes. The type of tenant that a landlord takes should be a matter for the landlord. Obviously, we agree that the usual discriminatory matters should apply, but we believe that using housing benefit as an indication of discrimination is taking matters too far. We believe that the Executive should reconsider any regulations or accreditation schemes in which housing benefit is used as a measure of discrimination.
Before I let Cathie Craigie move on to the next line of questioning, let me clarify that I would be grateful if all witnesses who want to respond to a question would indicate that they wish to contribute. As convener, I will then use my judgment in deciding who will speak. We need to get through our lines of questioning in the time that is available.
The Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 will require local authorities to advise on good practice for letting and to provide advice to any landlord who has been refused an application for registration or whose registration the authority seeks to remove. Do the regulations go far enough, or should local authorities be required to provide further information? At the outset, there was to be a light-touch approach.
This is a major concern for us and for our members. We have branches throughout Scotland, including three in the central region, in Stirling, Clackmannan and Falkirk. Over the past couple of weeks, we have held meetings with landlords and at each meeting the same issues have been raised: landlords have asked us, "How do we know what to do, as landlords?" and "What information is available to us?" The previous witnesses said that local authorities will try to engage positively and proactively with landlords, but the reality is often quite different. There are good local authorities that provide a lot of advice and information, but others do not, and many landlords join organisations such as ours to get that advice and information.
I assume that you will be involved in discussions with the Executive through your membership of the working group. Are you confident that that work is moving in the right direction?
We have made it clear to the Executive that such a requirement is not in the regulations or that there is not enough of a requirement in the regulations. The Executive has said that the regulations are not the place for that and that the matter should be stated in guidance for local authorities. The Executive has taken on the point and has said that the requirement will be made more explicit in the guidance, but I will not know whether that is enough until the guidance has been produced.
I agree with what John Blackwood has said: the regulations do not go far enough. However, if the Executive gives a commitment to deal with the matter in guidance, that might go some way towards allaying the fears of landlords.
We manage people's properties to a code that is more comprehensive than most local authorities' management schemes, so we do not have any problems.
Can we see a copy of your code?
Yes.
Not today, but perhaps you could get a copy to the clerk.
That would be helpful.
I share Patrick Harvie's concern that the Executive's guidance for local authorities should be equality proofed, including proofing against discrimination on the ground of sexual orientation and religion or belief. The matter is covered in schedule 1 to the Private Landlord Registration (Information and Fees) (Scotland) Regulations 2005.
We offer an information and support service to our members as well as to the public in general—to tenants as well as to landlords—and our statistics show that in the past month we received around 1,000 inquiries by e-mail, telephone or letter, 15 per cent of which were inquiries from landlords who were concerned about registration, largely because of the lack of information that is available at this early stage. Landlords are asking, "How can I sell up and when do I need to do it?" They are looking to get out of the market. In previous months, that sort of query would account for 1 or 2 per cent, because generally we get some such comments or questions from landlords. It is alarming that the incidence of such questions has increased so noticeably.
What is the main reason for so many landlords wanting to come out of the market? Is it the information that is being sought?
That relates to an earlier question. The bulk of our membership consists of small-time landlords rather than large corporate landlords. They perhaps own only two or three properties, which are near each other but are in different authorities. The biggest concern that landlords express is that there will be different rules in different areas and that there will be an onerous fee structure for only three properties.
Is it fair to say that their concerns are about the administration, the cost and the resources involved rather than the information that is being sought?
Yes, but again there is no information about the registration process at this stage. A lot of scaremongering is taking place. We are trying to alleviate that but it is very difficult, especially when we are seeing more and more about the fee structure—I am sure that we will come back to that. Landlords look at the fee structure and say, "Why should I do this?" They can understand the principle of registration, but we seem to have gone beyond that. Why do we need to take further steps? Why should there be differences between authorities? They feel that it is unfair that owing to the geographical location of their properties they have to go through various different tests. I think that that feeling is justifiable.
When the HMO regulations were introduced, we did some research into why clients left us over a two-year period. The research showed that 16 per cent left because of the HMO regulations. There is no evidence of landlords leaving us now, because they do not know what the regulations will mean. However, there is always a general fear among landlords who look to the past, when tenants had security of tenure and the value of their property was decimated. It is possible that landlords might leave us, but there is currently no evidence of that happening.
That is very helpful.
I believe that it will be sufficient. The regulations are fine as they are.
As I said to the previous panel, what we are trying to get at is whether the landlord has earned their money illegally and is investing it in houses, exploiting vulnerable tenants and so on. Can you confirm that the legislation will be sufficient to identify exactly who the landlord is?
Yes.
Do the other panel members agree with that?
Are you asking me whether I agree?
I am asking whether anyone else wants to comment.
If someone wants to get round the rules, they will do so. We have to deal with the law as it is.
The prescribed information that is listed in schedule 1 would be enough to identify who the private landlord is, but my worry is that the landlord might not register in the first place so we would not get that information. The landlords whom we may have to chase for registration are the very landlords to whom you refer.
Our concern is that there should be the lightest of touches in ensuring that one person is responsible for the property and that that person signs a declaration that he is so. There should be severe penalties if that person tells untruths. The way to take a light touch is to make random checks. The lighter the touch, the more random checks there could be. Then local authorities would be able to devote their time to looking for the landlords you are talking about, who will find ways around the regulations. We should not spend too much time dealing with them; we should do so in another way.
I have picked up from the panel's earlier comments that there is some concern about the fee structure for the registration scheme. Will you articulate those concerns?
There are a couple of points in principle. I will give you an example to put the issue in real terms. An individual landlord might own three properties. Because of the way local authority boundaries are drawn in Scotland, it is perfectly possible for three properties, perhaps within a 4-mile radius, to be in up to three different local authority areas.
I agree absolutely with Mr Blackwood on that point. On a positive note, I refer to the 100 per cent discount to holders of accreditation status and HMO licences. My organisation supports that fully.
I agree that landlords who are accredited should not have to pay any fees, because they will have been checked out already, but landlords whose properties are managed by professional firms that are members of the ARLA, the Law Society of Scotland or the Royal Institution of Chartered Surveyors should also be passported and not charged fees.
I note that the regulations provide for the local authority to charge an additional fee when it has made two separate requests of the landlord to register, and that that fee is 200 per cent of the principal fee. Have you had any thoughts about that? I realise that the Executive is trying to encourage good practice, but I wondered whether that provision was a concern. For example, in Moray, many Ministry of Defence personnel might rent out their houses while they are away in other countries. I thought that that provision might be a bit frightening. Do you think it is reasonable?
It is certainly a concern. There is also a knock-on concern. When it determines the principal fee, the local authority can take into account a percentage or nominal amount for enforcement. We believe that it is fundamentally wrong that a proportion of the fee that is paid by law-abiding citizens—landlords who agree to be on the register and do everything they can—should be used to catch those who are not.
Mr Barrie—
I—
I remind Mr Stimpson that I am chairing the meeting.
I am sorry—I did not hear you. I thought that you nodded to me.
No—I invited Mr Barrie to speak.
Sarah-Jane Laing said that she thinks there should be an upper limit. What do you think the limit should be? How would it be calculated?
We have said that there should be a cap on any additional fee. You might decide that the fee should be capped at 50 properties. That would be 50 times 20 per cent of the principal fee, which would still be a substantial fee.
So the additional fee would be capped, instead of a payment being made for each house.
Yes.
I move on to the regulations that deal with appeals against decisions on rent payable. The regulations place certain obligations on landlords. Do you think that those obligations are clear and that the regulations are understandable? Do you believe that there will be enough support for landlords in dealing with their obligations?
If we as management had a tenant who was antisocial, we would go to see them, give them a written warning and point out that, if the problem was not resolved, they would receive notice to quit. That is all that we can do to bring such problems to an end. We do not have to deal with many cases of that sort. Unfortunately, when we have given tenants notice, the local authority has not been supportive in any way and has encouraged the tenants to remain in place. That is odd. If antisocial behaviour is such a problem, why are local authorities not helping us to sort it out? There is nothing in the regulations that would help landlords to do that. They provide landlords with no powers to deal with antisocial behaviour.
Other regulations encourage local authorities to work much more closely with private landlords and to support them by providing advice and assistance. Is that not to be welcomed?
If they do not have agents, that is fine. However, we can help landlords to comply with the law—that is what we are trained to do.
I echo the point that was made earlier—the regulations are not clear enough and something needs to be done about that. The principle is fine, but it does not come across in the regulations.
You are saying that the principle is fine, but that it must be made clear in guidelines. Presumably, it would help if the Executive issued some material in plain English to landlords. Earlier you indicated that people do not quite understand what is happening. Perhaps the Executive, rather than local authorities, should take on the role of providing that clarification.
The Executive can do it quite easily. A range of media are now available to the Executive. Many landlords use the "Better Renting Scotland" website, and we can direct them to it. I am afraid that we are seeking step-by-step guides to all the legislation. At this stage, there is a lack of information and clarity. Unfortunately, that causes confusion and disarray in the sector and gives rise to the feeling that no one is doing anything to help us. That problem could easily be addressed.
If a landlord fails to carry out specific instructions, the sanctions—
There is a problem with the sound. I suspend the meeting until the problem has been sorted out.
Meeting suspended.
On resuming—
Mr Stimpson was about to make a point.
The point that I was making is that the sanctions in the act are all criminal sanctions against the landlord. It therefore follows that the regulations by which landlords are to abide must be clear, so that people understand exactly what they are required to do. The regulations should obviously be the same throughout Scotland; they cannot differ from one area to another, because there is a criminal sanction. We would like there to be clear instructions as to what is expected of a landlord in relation to acts of antisocial behaviour by a tenant, so that there is no misunderstanding.
I have a final point relating to the earlier evidence given by the COSLA witnesses, who raised the issue of rent payable. Concern has been expressed about how a tenant who was financially excluded would cope. Some witnesses—perhaps also those from whom we shall hear later—feel that there should be a scheme whereby a third party is involved to take rent. Do you have any views on that?
I have concerns about circumstances in which an appeal may take place. Tenants need to be fully aware of the implications of the outcome of an appeal. That might be a situation in which a holding account would be entirely appropriate.
There could be different scenarios. For instance, there could be a tenant who is involved in antisocial behaviour and a landlord who is doing nothing about it. A common symptom of antisocial behaviour is that the tenant does not pay rent; the two issues often go hand in hand. If the landlord is failing to do anything about it, creating a rent abatement notice or order might not necessarily help, because the tenant might not be paying the rent anyway.
In practical terms, if there is antisocial behaviour, the landlord or agent will give the tenant notice. He will want to get his property back so that he can relet it. He is unlikely to face a situation where his rent stops and he has a problem with a tenant who is in place, so the question is slightly academic.
I hate to come back on that point, but there is a potential issue that I would like to mention. If the landlord is subject to an antisocial behaviour notice, that notice must, under the regulations, be explicit as to the action that is to be taken by the landlord. If the landlord begins that action, the tenant, quite rightly, would seek advice from the local authority as to what their rights are, and the local authority could advise them that the best option for them is to stay put in the property, even though a notice to quit has been issued. The period between issuing the first notice and the time when the landlord, through the sheriff court, regains possession of the property could be months, or even the best part of a year.
You probably heard the earlier discussion on management control orders. I would like to return to the definitions. I appreciate that management control orders are used at the end of the process when everything has gone wrong and the local authority comes into the property, but can you say from your side of the debate that you are confident about the definitions and parameters that describe when your members have to pay for the repairs that local authorities carry out to bring the house up to a tolerable standard? Are you content that the regulations, as proposed, are proportionate and workable?
To be honest, it will be difficult for local authorities to use management control orders. As you rightly say, they will be a last resort. Local authorities will be reluctant to use them because they will not want to take on the responsibility. Technically, within the 12-month period of the order, the tenant could insist on repairs being done to the property—you alluded to that when you asked the first panel the same question. If the tenant were properly advised, they could go to the private rented housing panel and ask it to address the situation and the local authority would be dragged before the panel to justify why it had not done the repairs or to explain what it was doing about the situation. I foresee a conflict, so I do not think that the system will work in practice. Management control orders will be a last resort for local authorities.
They are an unworkable last resort. Councils will not want to use them because of their liability for the work. Is that a fair comment?
That is a fair and reasonable deduction.
I do not know what practical problems local authorities have, but in Edinburgh a statutory notice on a building can take more than a year to be sorted out. We are just getting licences for houses in multiple occupation that we applied for a year ago. Given that those things take a year and that councils have only 12 months to deal with management control orders, it seems to me that they are not practical.
As Mr Blackwood said, management control orders should be a method of last resort, but if a situation has deteriorated to the extent that a last resort is required, we support the necessary costs being incurred by the local authority. The schedule to the instrument clearly identifies the permitted expenditure. However, I have some concerns about the operation of the recovery of costs from the landlord and I suggest that a vehicle such as a charging order should be incorporated in the instrument to deal with that.
Mr Blackwood mentioned the fact that, when a landlord fails to comply with an antisocial behaviour notice, the local authority may take the steps that it deems necessary to deal with antisocial behaviour. That is described in the Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005. What is your view on the provisions in that instrument?
We worked with the Executive on those regulations for obvious reasons of information dissemination. We said that the regulations needed to be clear and we are confident that they are. It is now a question of moving the provisions from the regulations into good practice. That is where our concern lies, but the provisions are enshrined in the regulations.
Do you think that, if there are problems, local authorities will not take direct action at an early stage but will work with the landlord to try to improve tenants' behaviour? Do you agree that the regulations are there to aid that process rather than to be used as a hammer at any opportunity?
Yes. Every local authority now has an antisocial behaviour team, so there are people in post who are trying directly to address antisocial behaviour in local communities. From our experience of running SAL branch meetings, dealing with landlords and bringing along people who are involved in antisocial behaviour teams, we are clear that they are saying, "Listen, don't come to us only when the situation is out of control. We are here to give advice and assistance." The teams are trying to be proactive. They are saying to landlords, "If you have a suspicion about a tenant or something is not going quite right even though it is not out of control, call upon our expertise and our experience." That is invaluable. Landlords are saying, "Great. For the first time, we are actually getting positive co-operation from antisocial behaviour teams."
That is an encouraging response, given some of what was said during the passage of the Antisocial Behaviour etc (Scotland) Bill. Your aim was the intention of the measures.
Although the reality might be quite different.
But it is useful to hear that that is what your members said and that you want to work with local authorities to achieve it. The difficulty in the past has been that we have come across situations only when they have gone on for a long time. It is great to hear what you say.
Before, there was a them-and-us situation between the private rented sector and local authorities. Engagement resulted from desperation on the authorities' part to provide accommodation to people in their locality. The good thing is that we are moving beyond that now. All the legislation is forcing both sectors to work together. I hope that that will continue to be the case—I am an eternal optimist.
I back John Blackwood. Our organisation believes that we should work in partnership with local authorities to stop or reduce antisocial behaviour. The problem is that if you read the consultation paper, the police and local authorities are described as partners, but landlords are not. The message needs to go out from the Scottish Parliament and the Executive that most landlords want to work with local authorities to deal with problems. The message needs to be clear that we are partners, not simply targets for antisocial behaviour notices.
Thank you for your attendance. Your evidence will be reflected upon. We are grateful to you for giving up your time to assist us with our deliberations on these matters.
Meeting suspended.
On resuming—
I welcome our final panel of witnesses. We have been joined by Jennifer Wallace, the policy manager for housing, local government and education in the Scottish Consumer Council; Rosemary Brotchie, the policy officer for Shelter Scotland; James Alexander, the depute president of the National Union of Students Scotland; and Jamie Ballantine, the assistant director of the Tenant Participation Advisory Service Scotland. Thank you for joining us, particularly those of you who sat through our earlier evidence-taking sessions.
I thank the committee for inviting me to give evidence today. Shelter has been very happy with the consultation process so far.
Initially, the Scottish Consumer Council had some concerns about including the regulations in the Antisocial Behaviour etc (Scotland) Act 2004. However, I was a member of the working group and I must say that I think that the regulations reflect the fact that the Executive has listened to what all its members had to say, so we are very happy.
I echo the thanks from Shelter Scotland. We feel that we have been adequately consulted.
As far as I am aware, my organisation is happy with the consultation. My only observation is that I asked the clerks whether the Scottish Council for Single Homeless had been invited to give evidence.
There has been contention over the issue of light touch and whether the regulations guarantee that a light touch will be taken. What views do your organisations have on whether that light touch has been achieved in the regulations?
The Scottish Consumer Council views the regulations as taking a light touch. We are concerned that regulation in this area should be proportionate and we feel that self-certification, backed up by further checks if a local authority thinks that that is necessary, is a light touch that should protect tenants.
I agree with that comment. Suffice to say that if registration is to achieve the numerous objectives that have been set out for it, only a few of which have been mentioned during the meeting so far, we will have to come back and consider, review and monitor it.
Those panel members who were present for the previous panels' evidence will know what my question is. Are you satisfied with the exclusions to the registration scheme?
Yes, I think that we are satisfied with them, particularly the exclusion of resident landlords. However, as we said in our written evidence, we hope that the position of resident landlords will be reviewed within, say, two years of the scheme's implementation.
Again, I echo that. Because of the complexity involved in identifying resident landlords in the first instance, we are very happy with the logic of excluding them at this point, just to get registration up and running smoothly. However, we would not want that issue to be lost. The consultation paper made the point that there is an increased potential for tenants of resident landlords to experience problems with their tenancy. We are concerned to ensure that such tenants do not become second-class tenants who do not benefit from rights that are afforded to others.
Is the exclusion of resident landlords a particular issue for the National Union of Students?
Not really. Most students live in accommodation that is provided through a letting agency or private landlord. We are keen, as Shelter suggested, that the issue be looked at in future, but at the moment we are happy with the arrangements.
We echo Shelter's view. For the purposes of getting started and in the spirit of the light-touch approach, it is a good idea not to involve resident landlords at this point. However, the position could be reviewed in three years.
The working group reflected on the possibility of non-resident landlords pretending to be resident landlords. Apparently, there have been instances of that; they have locked rooms in flats and so on. One reason why we would like a strategy for monitoring implementation is to make sure that that does not happen.
The Executive is also committed to taking evidence on and to reviewing the situation of holiday lets. Is there any particular issue that the panel would like to raise about the exclusion of holiday lets from the scheme? Do you see any potential problems for tenants?
We need to be careful about making a licensing or registration regime such as this cover all sorts of different purposes. There may be problems with holiday lets that would be better dealt with in a different way than through registration. However, we will look at the experience of HMO licensing, which was introduced originally as part of more general licensing powers. We need to gather more information on holiday lets before we decide whether it is appropriate to include them in the registration system.
Is the requirement on local authorities to provide advice and information to tenants when they decide to take action against a landlord adequate?
Are you asking specifically about tenants?
I am asking about advice and information to tenants.
Advice and information are essential to the success of the scheme. I would even go as far as saying that it would be good to have a national information campaign as well as local ones. If the registration scheme is to be a success, private tenants need to be aware of it from the outset. Rather than a tenant finding out about the scheme from their landlord, there should be a solid information campaign to make people aware of the scheme and to enable them to make inquiries locally.
We are satisfied with the provision on advice and information where registration has been refused or removed or a no rent payable order has been issued. However, we are disappointed that it does not go wider to include a general duty to provide information and advice to tenants. We would like such a duty.
Tenants should be informed about all their rights under the new registration scheme. That is particularly the case with regard to any dispute or potential loss of licence, so that tenants are fully aware of exactly what is happening and can make a judgment.
I would like to pursue the question of information. The Scottish Consumer Council and Shelter have raised the issue of what happens when rent is not paid directly to a landlord. There was concern that a tenant who was financially excluded or who did not have the wherewithal to manage their money might find themselves owing a great deal of money if an appeal by a landlord was successful. In their submissions, both organisations raised the fact that it is not proposed that there should be a rent deposit scheme or that a third party should be empowered to hold that money. The Scottish Executive says that there are difficulties with such proposals, but we do not yet know what they are. We will ask the minister about that, but before we do, would you like to put on record what you think about rent being held separately?
I echo the concern that the local authority representatives on the first panel expressed, which I think the landlords also mentioned. The regulatory impact assessment considered only one method of holding the rent in a separate account, whereby the money would be put in a joint account for the tenant and the landlord, unless there were practical problems with that. I think that we recognise what those problems are, but I am curious about why the Executive did not investigate other options. A tenancy deposit scheme or a scheme in which local authorities would hold the rent as a third party could be considered. Such solutions might not be appropriate in every case, but they should be an option for some tenants to ensure that they do not lose out as result of action involving the local authority and the landlord.
I echo that. I think that we were concerned that, as the Executive note explains, consideration was given to joint accounts, but not to third-party accounts or alternative solutions to the problem. We want such suggestions—especially the idea of a national rent deposit scheme—to be given further consideration.
We certainly agree that it is crucial that tenants are aware of the possibility that they might have to pay back-dated rent. In future, we would like the Executive to set up a system such as the one that Shelter has described, whereby tenants could pay their rent to the local authority or to another third party.
We agree with that. It is essential that tenants should have a scheme into which they could pay their rent while issues were being resolved. They should not be left in a position in which they have to make their own arrangements.
If such a proposal were not included, would you reject the rest of the regulations or would you be happy for the matter to be examined in future, as James Alexander suggested?
As they stand, the regulations are very comprehensive, but local authorities should consider offering as an extra a scheme such as the one that we propose.
I want to ask about the information that will be required under the registration scheme. Bearing in mind the scheme's light-touch approach, should any other information be prescribed?
Shelter accepts that the system should use self-certification if it is to run smoothly, but I echo some of the points that were made earlier. A check should be carried out on a small proportion of the applications that are made to ensure that the system is credible in the eyes of tenants and responsible landlords, who will have something to gain from registration. There must also be confidence that registration will pick up cases in which bad landlord practices take place and that the landlords concerned will be excluded from letting.
But you are quite happy with the information that will be sought from landlords—you do not think that any further information should be provided.
That is right.
We are quite happy with the information that will be sought, but in the consultation paper, reference was made to the importance that should be attached to complaints from tenants. Given the particular difficulties in the relationship between tenants and landlords, we would like further information to be provided, perhaps in the guidance rather than in the regulations, so that local authorities have a model complaints system for tenants.
Do you think that the information that will be sought and the scheme itself will protect tenants from the minority of bad landlords?
The information that will be sought is a minimum to ensure that registered landlords have no serious criminal convictions, and it will give the local authority the ability to apply a fit-and-proper-person test on grounds that it will establish. However, the process cannot just end there. Because registration will be self-certified, the retrospective analysis and assessment of landlords will be very important. Tenants should feel that they can come forward if they have complaints about or problems with a landlord. Although registration is a one-off process, it will have to be renewed every three years. If a tenant has a problem with a landlord, they should feel that they can complain and that mechanisms are in place to allow them to do that.
So you think that tenants, rather than take up their problem with their landlord, should be able to let the local authority know that the landlord may not be a fit-and-proper person. Should the scheme go that far?
It is not an either/or situation—a balance must be struck. With some landlords, the tenant should go to them in the first instance if they have a problem, but that will not be appropriate in some instances. If a landlord is bad and has been accused of harassment, the tenant might need to seek the intervention of a third party.
A practical difficulty that occurred to us is that, as the registration scheme will be dependent on people's co-operation, it is not clear what course of action tenants should take if they think that their landlord has not registered with the local authority.
That is a good point—it was also raised earlier.
What comments do you have on the proposed general framework for fees for the registration scheme? Will it allow the scheme to achieve what it is designed to do?
We heard concerns earlier about the impact that the fees will have on rents and on the market. The Scottish Consumer Council has concerns about that, too, but the estimates that we have heard so far that the fees will be between £50 and £250 per landlord per property do not seem to us to be unnecessarily high. However, a maximum has not been set. The Executive note suggests that, if ministers feel that fees are "unjustifiably high", they will make further regulations. We would prefer to have information on what that phrase means, particularly in relation to the possible effect on the market.
Registration should not be so expensive that landlords have a disincentive to register, as the system will rely on landlords coming forward to register in the first instance. We support fees if they are set at a level that the market can support, but we are not happy with the concept that registration should be entirely self-funded or self-financing. In our experience, HMO licensing gives local authorities a strong incentive to pursue landlords who are easy to contact, which means that they do not concentrate their efforts on landlords who seek to avoid registration. One justification for the scheme is that a better-quality private rented sector will take pressure away from public funded housing and give better value for the housing benefit that is channelled into the private rented sector. In effect, that means that registration is a public good, so the Executive should support the cost of running it.
Shelter's response to the consultation states that there is a need
Landlords who are aware of their responsibilities and are keen to be established as good, responsible landlords will register voluntarily. The fees as they stand are not a great disincentive, but some landlords will seek to avoid registration. Others will seek to self-certify and pass through into registration in the hope that their past practices or record will not emerge. The onus will be on local authorities to investigate landlords and to be aware that some landlords might not have a clean record and that tenants might complain about them.
The panel may have heard the earlier debate on management control orders, which will probably be few and far between. As representatives of tenants, do you have any views on what local authorities ought to be doing if they find, for example, heating systems in the houses that they take over under such orders to be either dangerous or manifestly substandard? On bringing properties up to the tolerable standard, do you wish local authorities to take more initiative than is set out in the regulations or to take the same sort of initiative as is set out in the regulations, or should there be no regulation in that area?
Tenants have a right to live in accommodation that is above the tolerable standard. If a landlord is responsible for a property and receives rent for it, they should be responsible for ensuring that it is above the tolerable standard.
In this context, therefore, you think that the local authority should have that responsibility when it takes over a property under a management control order. At what level should the tolerable standard be set?
We do not have a policy on that.
I understand that the tolerable standard is an absolute minimum standard below which a house is not habitable. Therefore, it is entirely reasonable that if a local authority takes over the management of a property that is below the tolerable standard, it should bring it up to the tolerable standard as quickly as possible.
Under no circumstances should tenants live in an unsafe property, such as the one that Euan Robson described with a dangerous heating system that needs to be repaired. It is perfectly reasonable for the local authority to ensure that the property is safe and habitable for the tenants who live there.
I agree with all those comments. In addition, I suggest that the guidance points to the need for joined-up working and thinking between council departments and housing associations. There might be circumstances in which, rather than do up a particular property, the most appropriate solution would be for the local authority to encourage people to apply to join the local authority housing list or a local housing association waiting list. The guidance should point to situations in which such a solution might apply. It might not apply to student accommodation, but if someone has lived in a property for a long time, it might apply to them.
I have a question for Mr Alexander. Let us imagine a gas central heating system in student accommodation that presents the risk of carbon monoxide poisoning. That property clearly does not meet the tolerable standard. Is it appropriate for the local authority to replace the system or, as was suggested in earlier evidence, simply to provide an individual appliance for each set of rooms? Which would you prefer? Where does the balance lie?
Where students have moved into a property that has a certain heating system, that system should be retained and maintained. The local authority, as the body responsible for the property, should ensure that the heating system is of an adequate standard and poses no risk to the tenants who live there.
I do not know whether the witnesses wish to comment on this, but we asked the previous two panels about the Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005.
It appears that none of the witnesses wants to comment on that, in which case I will ask a general question about antisocial behaviour. Under the regulations, local authorities will be obliged, if tenants are antisocial, to provide information to landlords on how they can address the situation before an antisocial behaviour order has to be considered. Are you confident that the information that local authorities will have to provide will assist landlords sufficiently?
I was encouraged by the comments of an earlier panel of witnesses on landlords and local authorities working together. I support the regulations and those comments.
Any group of young people living on their own for the first time will need time to adjust to a new way of living. In such cases, most, if not all, problems or examples of antisocial behaviour can be resolved through speaking to those people. In very few circumstances will formal procedures be necessary.
If a local authority is planning to serve an antisocial behaviour notice on a landlord because of a particular type of behaviour, the regulations say that that would normally be in addition to action—such as an antisocial behaviour order—from the local authority that is aimed directly at the antisocial behaviour. Would the antisocial behaviour notice on the landlord have to be accompanied by legal action against the tenant? Alternatively, could it be accompanied by one of the other options in the toolkit for dealing with antisocial behaviour, such as an acceptable behaviour contract or a course of mediation? If so, that might be a point for the guidance.
In its evidence, Shelter Scotland made a point about the private rented housing panel. You suggest that guidance is required on the interaction between the private rented housing panel and the local authority. Why do you believe that that would be necessary and helpful?
For registration to be effective, an effective way will have to be found of increasing confidence in the private rented sector. Tenants need to feel that their concerns are being addressed. We welcome the proposed amendment to the Housing (Scotland) Bill that would require the private rented housing panel to inform the local authority if it was taking action against a landlord.
That concludes our questions. Thank you very much for taking the time to come along. We are very grateful to those of you who sat through all the evidence this morning.
Meeting closed at 12:23.