COM/S2/05/28/A COMMUNITIES COMMITTEE AGENDA 28th Meeting, 2005 (Session 2) Wednesday 23 November 2005 The Committee will meet at 9.30 am in Committee Room 2. 1. Subordinate legislation: The Committee will take evidence on the following instruments the draft Private Landlord Registration Modification (Scotland) Order 2005 the Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/557) the Private Landlord Registration (Information and Fees) (Scotland) Regulations 2005 (SSI 2005/558) the Private Landlord Registration (Appeals against Decision as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/559) the Antisocial Behaviour Notice (Appeal against Order as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/560) the Antisocial Behaviour Notice (Management Control Orders) (Scotland) Regulations 2005 (SSI 2005/561) the Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005 (SSI 2005/562) the Antisocial Behaviour Notice (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/563) from David Webster, Housing Strategy Manager, Glasgow City Council Robert Steenson, Environmental Health Manager, North Lanarkshire Council Natalie Hoy, Divisional Officer, Housing Inspection, Enforcement & Licensing, City of Edinburgh Council Derek Muir, Housing Development & Strategy Manager, Fife Council
COM/S2/05/28/A and then from John Blackwood, Director, Scottish Association of Landlords Brian Adair, Chairman of Scottish Branch and Member of National Council, Association of Residential Letting Agents Sarah-Jane Laing, Housing Strategy Officer, Scottish Rural Property and Business Association Mike Stimpson, Chair, National Federation of Residential Landlords and then from Jennifer Wallace, Policy Manager - Housing, Local Government and Education, Scottish Consumer Council Rosemary Brotchie, Policy Officer, Shelter Scotland James Alexander, Depute President, National Union of Students Scotland Jamie Ballantine, Assistant Director, Tenant Participation Advisory Service (TPAS) Scotland. Steve Farrell Clerk to the Committee Tel. 0131 348 5211 email: steve.farrell@scottish.parliament.uk
COM/S2/05/28/A *********************** The following papers relate to the meeting: Agenda Item 1 Briefing note by SPICe (private paper) Note by the Clerk Written evidence from the following witnesses: COM/S2/05/28/1(P) COM/S2/05/28/2 COM/S2/05/28/3 Scottish Consumer Council Shelter Scotland The draft Private Landlord Registration Modification (Scotland) Order 2005 is reproduced below. The other seven SSIs are available on the Office of Public Sector Information (OPSI) website at: http://www.opsi.gov.uk/legislation/scotland/s-200505.htm
COM/S2/05/28/2 COMMUNITIES COMMITTEE 23 October 2005 SUBORDINATE LEGISLATION Regulation of private landlords under the Antisocial Behaviour Etc (Scotland) Act 2004 Background 1. The Committee will be considering evidence on the eight instruments listed below which were circulated to members on 15 November 2005. An Executive Note accompanies the instruments. the draft Private Landlord Registration Modification (Scotland) Order 2005 the Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/557) the Private Landlord Registration (Information and Fees) (Scotland) Regulations 2005 (SSI 2005/558) the Private Landlord Registration (Appeals against Decision as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/559) the Antisocial Behaviour Notice (Appeal against Order as to Rent Payable) (Scotland) Regulations 2005 (SSI 2005/560) the Antisocial Behaviour Notice (Management Control Orders) (Scotland) Regulations 2005 (SSI 2005/561) the Antisocial Behaviour Notice (Landlord Liability) (Scotland) Regulations 2005 (SSI 2005/562) the Antisocial Behaviour Notice (Advice and Assistance) (Scotland) Regulations 2005 (SSI 2005/563) 2. The instruments were laid on 11 November 2005 and are intended to be considered together in relation to Parts 7 and 8 of the Antisocial Behaviour etc. (Scotland) Act 2004 on the subject of regulation of private landlords. 3. The draft Private Landlord Registration Modification (Scotland) Order 2005 is subject to affirmative procedure under Rule 10.6 of the Standing Orders. This means that a Ministerial motion recommending approval of the instrument must be moved in a meeting of the lead committee, e.g. the Communities Committee. The Committee may agree or disagree to this motion and then report to Parliament on its decision. 1
COM/S2/05/28/2 4. The other seven instruments are subject to negative procedure. Under Rule 10.4 of the Standing Orders, this means each instrument comes into force and remains in force unless it is annulled by the Parliament within 40 days of being laid before the Parliament. Any MSP may lodge a motion seeking to annul an instrument, and if such a motion is lodged, there must be a debate on the instrument at a meeting of the Committee. No motions to annul these instruments have so far been lodged. The Committee is required to report to Parliament on these instruments. Further Committee consideration 5. Following the evidence session on 23 November, the Deputy Minister for Communities will attend the Committee s meeting on 7 December to provide evidence on all eight instruments and then move motion S2M-3564 for the affirmative instrument. At its meeting on 7 December, the Committee should decide if it agrees or disagrees to the motion for the affirmative instrument and is required to report to Parliament on all eight instruments by 12 December 2005. Subordinate Legislation Committee report 6. The Subordinate Legislation (SL) Committee will consider these instruments at its meeting on 22 November. The Communities Committee must take the SL Committee s report into account before making its lead committee report to Parliament on the instruments following its meeting on 7 December. Steve Farrell Clerk to the Communities Committee Tel. 0131 348 5211 email: steve.farrell@scottish.parliament.uk 2
COM/S2/05/28/3 COMMUNITIES COMMITTEE 23 October 2005 SUBORDINATE LEGISLATION The following written submissions are attached: Scottish Consumer Council Shelter Scotland 1
2 COM/S2/05/28/3
COM/S2/05/28/3 WRITTEN SUBMISSION FROM SCOTTISH CONSUMER COUNCIL Regulation of Private Landlords under the Anti-Social Behaviour Etc. (Scotland) Act 2004 The Scottish Consumer Council s evidence to Communities Committee on the Regulation of Private Landlords under the Anti-Social Behaviour Etc. (Scotland) Act 2004 3
COM/S2/05/28/3 About the Scottish Consumer Council The Scottish Consumer Council (SCC) was set up by government in 1975. Our purpose is to promote the interests of consumers in Scotland, with particular regard to those people who experience disadvantage in society. While producers of goods and services are usually well-organised and articulate when protecting their own interests, individual consumers very often are not. The people whose interests we represent are consumers of all kinds: they may be patients, tenants, parents, solicitors clients, public transport users, or simply shoppers in a supermarket. Consumers benefit from efficient and effective services in the public and private sectors. Service-providers benefit from discriminating consumers. A balanced partnership between the two is essential and the SCC seeks to develop this partnership by: carrying out research into consumer issues and concerns; informing key policy and decision-makers about consumer concerns and issues; influencing key policy and decision-making processes; informing and raising awareness among consumers. The SCC is part of the National Consumer Council (NCC) and is sponsored by the Department of Trade and Industry. The SCC s Chairman and Council members are appointed by the Secretary of State for Trade and Industry in consultation with the First Minister. Martyn Evans, the SCC's Director, leads the staff team. Please check our web site at www.scotconsumer.org.uk for news about our publications. Scottish Consumer Council Royal Exchange House 100 Queen Street Glasgow G1 3DN Telephone 0141 226 5261 Facsimile 0141 221 0731 www.scotconsumer.org.uk The SCC assesses the consumer perspective in any situation by analysing the position of consumers against a set of consumer principles. These are: ACCESS Can consumers actually get the goods or services they need or want? CHOICE Can consumers affect the way the goods and services are provided through their own choice? INFORMATION Do consumers have the information they need, presented in the way they want, to make informed choices? REDRESS If something goes wrong, can it be put right? SAFETY Are standards as high as they can reasonably be? FAIRNESS Are consumers subject to arbitrary discrimination for reasons unconnected with their characteristics as consumers? REPRESENTATION If consumers cannot affect what is provided through their own choices, are there other effective means for their views to be represented? Published by the Scottish Consumer Council November 2005 We can often make our publications available in braille or large print, on audio tape or computer disk. Please contact us for details. 4
COM/S2/05/28/3 The purpose of the Scottish Consumer Council is to make all consumers in Scotland matter. We do this by putting forward the consumer interest, particularly that of disadvantaged groups in society, and by working with those people who can make a difference to achieve beneficial change. SCC was represented on the Housing Improvement Task Force which considered the registration of private landlords and more recently we have sat on both the Scottish Executive Registration Working Group and Community Scotland s Private Landlord Accreditation Advisory Group. In responding to the Scottish Executive s proposals on the regulation of private landlords we have taken into account the Better Regulation Executive s criteria for regulation which states that regulation should be proportionate, accountable, consistent, transparent and targeted. We welcome the opportunity to comment on the secondary legislation on the regulation of private landlords under the Antisocial Behaviour etc. (Scotland) Act 2004. 1. The Antisocial Behaviour Notice (Appeal against Order as to Rent Payable) (Scotland) Regulations 2005 AND 6. The Private Landlord Registration (Appeal against Decision as to Rent Payable) (Scotland) Regulations 2005 Each of the above regulations places a duty on the landlord to make the tenant aware of their appeal against no rent payable (either under an Antisocial Behaviour Notice or a failure to be registered) to ensure that they can set aside money that would otherwise have been paid in rent. If the landlord fails to do this, the tenant would not be liable for backdated rent. As it is in the landlords interests to inform the tenant and ensure that they understand the implications, SCC believes that the duty placed on them should be sufficient to ensure tenants are informed. However, once informed, the responsibility is on the tenant to ensure that they can pay backdated rent and SCC would welcome Scottish Executive guidance for local authorities on how to provide tenants with money advice should this situation arise. We would also welcome a clear statement about whether or not the tenant would be liable to pay interest on the amount of backdated rent. We had also previously argued for a system whereby an independent third party could hold the payments until the appeal was settled. The executive note accompanying the regulations argues that there are a range of practical problems to implementing this suggestion 1. As the Executive Note provides no further information, we ask that the Scottish Executive clearly states these difficulties to allow for open and transparent debate on the matter. 1 We note that the Regulatory Impact Assessment includes and rejects the option of a joint bank account for tenants and landlords in this situation but does not discuss other payment options that could be facilitated by the local authority. 5
COM/S2/05/28/3 5. The Private Landlord Registration (Information and Fees) (Scotland) Regulations 2005 SCC welcomes the removal of proposals to ask landlords to provide information on spent convictions. In our consultation response we, and other organisations, outlined our concerns about these proposals. We agree with the approach taken in the regulations that local authorities may ask for a standard disclosure check (which would include information on spent convictions) if they have concerns but that this will not be done as a matter of course. It is often asserted that business pays the price of regulation, in this case landlords, however the real burden is on consumers who pay through increased prices 2. The Regulatory Impact Assessment accompanying the regulations falls into this trap stating that establishing maximum fees at this stage could therefore create a cost burden on local authorities or on landlords. If the cost burden falls on landlords they will recoup the cost through higher rent, or if the cost is disproportionately high it may discourage potential landlords from entering the market, reducing supply and possibly increasing the cost of available housing. SCC argues that fees must be set low enough to ensure that they do not significantly affect the market, either by discouraging landlords or by raising rents. The approach taken by the regulations is to create a structure for fees including a principal fee, additional fees and discounts to create consistency in the approach. However, the regulations have not provided local authorities with an indication of what a reasonable principal fee would be, allowing local authorities to set the fee at an amount that allows them to fully recoup the costs of the system, rather than setting it at a level that will not affect the market. To create a check and balance on local authority fees, the explanatory notes suggest that if fees become unjustifiably high, it will be open to Ministers to regulate to limit fees. In the absence of a maximum fee set by the Scottish Executive, we would welcome a statement on what unjustifiable would mean, based on likely market impact, and a clear timetable for a review of fees, within 2 years of the implementation of the Act. Setting a 2 year timetable would allow Ministers to set further regulations in time for the second wave of registration fees in 2009. While Scottish Executive grants are to be provided these are to correct for false assumptions made by local authorities in setting their original fee levels with the implication that the scheme should eventually be self-financing. However, further consideration should be given to the proper balance between fees and core funding. While it is reasonable to expect tenants to pay a proportion of the cost for the increased protection offered to them through the new system, it is questionable whether they should pay the full cost. As the proposals will benefit not only current tenants but future tenants, and communities through the possible impacts on anti-social behaviour, it could be argued that the cost should be shared across the population by 2 Consumers and Regulation (NCC, 2005) 6
COM/S2/05/28/3 including an element of funding through taxation rather than solely through fees which will be passed on to tenants. 7. The Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 Local authorities are to be placed under a duty to provide advice and assistance to tenants and occupants when the local authority decided to refuse or remove a landlords registration or serve a no rent payable notice. SCC welcomes a specific duty on local authorities to provide advice and assistance to tenants, we would like there to be a code to explain in more detail what the general duty would entail. Our response to the Anti-Social Behaviour Bill highlighted the need for tenants to be informed of the need for registration and to have access to a fair and independent complaints system as the regulation of private landlords will rely heavily on tenants to inform the local authority if problems arise. Without a private tenants information strategy this is unlikely to be effective. 8. The Private Landlords Registration (Modification) (Scotland) Order 2005 (draft) On balance, SCC agrees that resident landlords should be excluded from registration at this time. However, we remain concerned that the protection offered to tenants renting from non-resident landlords will not be offered to those renting from resident landlords, particularly surrounding breaches of housing law, fraud or violent crimes. We appreciate the difficulties of implementing such a regulation, and are cautious of over-regulation in the private rented sector, but would welcome a commitment by the Scottish Executive to review and produce evidence on the issues within 2 years of the implementation of the current regulations. 7
COM/S2/05/28/3 WRITTEN SUBMISSION FROM SHELTER SCOTLAND Briefing for the Communities Committee on the regulation of private landlords under the Antisocial Behaviour (Scotland) Act 2004 23 rd November 2005 Over 160,000 households live in the private rented sector in Scotland. The sector, while containing some of the highest standards, also has some of the worst tenancy management practices. Effective regulation of private sector landlords in Scotland would give a much-needed boost to a sector and provide some protection for tenants. Shelter supported the introduction of a national registration scheme for landlords because it is important to have better information on the private rented sector and to be able to identify who landlords are. We are less sure, however, whether registration in itself will be effective in reducing bad management practices among private landlords. Shelter made a number of points in response to the consultation on the regulations for the registration scheme. Some of these have been addressed in the revised regulations, for example, landlords will be required to sign a declaration that they are aware of their legal responsibilities. We still have concerns, however, about the operation of registration and whether it will achieve the expectation of eliminating the worst practices amongst landlords. There are still issues that need to be resolved in order to make registration an effective means of ensuring that landlords manage properties within the law and maintain high standards: Shelter welcomes that landlords sign a declaration that they are aware of their legal duties when registering. A declaration is only effective if there is evidence that a landlord has breached a legal duty, since they cannot then claim that they were unaware of the legal requirements. Such a declaration does not give a guarantee that landlords will maintain high standards and act within the law. Shelter accepts that a self-certificated application should be taken at face value. If tenants and responsible landlords are to have confidence that people who are registered to be landlords are fit and proper to be letting houses, there should also be a requirement for a small sample of applications to be checked each year. This would ensure the integrity of the system and act as a signal for landlords to take the process of self-certification seriously. Such a system of self-certification adds significant weight to the importance of retrospective assessment of landlords conduct. Local 8
COM/S2/05/28/3 authorities should continue to monitor landlords on their register and follow-up on complaints or referrals made to them. There should be a clear indication in guidance that this is an integral part of maintaining a register. Shelter welcomes the intention in the Regulatory Impact Assessment the Executive will make information available to tenants and interested parties on the Better Renting Website. In addition to this, information should also be provided to tenants by the local authority. This information should seek to ensure that tenants are aware of their rights and responsibilities and of the procedure for informing the local authority if they believe that their landlord is not behaving responsibly. An information strategy aimed at tenants should be clearly set out in guidance. This is particularly important at a time when new rights for tenants are being introduced with the Repairing Standard. Local authorities should be required to put in place procedures for dealing with complaints from tenants and other interested parties. This is particularly important given that tenants may be vulnerable and may not easily volunteer information or report their landlord for fear of losing their tenancy. This is especially the case if tenants have not received a tenancy agreement and are unsure of their legal rights. Underpinning registration is the potential for the introduction of a Letting Code as set out in section 155 of the Housing (Scotland) Bill. There is currently no timescale for reviewing the operation of registration and it would be helpful if the Executive could indicate how the provisions in the Bill for issuing a Letting Code are to be taken forward The guidance should set out clearly the relationship between the Private Rented Housing Panel (PRHP) and the local authority. There should be a requirement for the PRHP to inform the local authority if they are taking action against a landlord who is registered in their area. This will allow the local authority to be able to take into account that a landlord is being investigated for a breach of the repairing standard when they make a decision about the fit and proper person test. It will also alert the local authority that there is the possibility that enforcement action will be taken against a landlord by the PRHP. Shelter seeks clarification on the protection for tenants whose landlord is deregistered: It is currently not clear what the implications are for the tenants of a landlord who loses or is refused registration. In particular it is not clear whether deregistration is a ground for possession. Shelter seeks clarification on what will be the status of a tenancy where a landlord is not registered and where the landlord chooses not to employ an agent to manage any existing tenancies. If a landlord cannot legally let but 9
COM/S2/05/28/3 has entered into, for example, an assured tenancy agreement, what will then be the status of that tenancy? The local authority should monitor what happens to tenants as a result of a landlord being deregistered. Tenants should not suffer as a result of the actions of the landlord and local authority, especially as the intention of the registration scheme is to protect tenants. There may be an increased potential for a landlord to seek to evict their tenants unlawfully, and the local authority should make a landlord that they deregister aware of what legal options they have in seeking to end a tenancy. The local authority should also inform the housing and homelessness department that the tenants may be receiving eviction notices and provide advice and support to tenants where necessary. 10