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Downloadable Here: London Housing Prosecutions 2011-2014 Report Three What impact is enforcement of rules and regulations having on the private rented sector? December 2016 1 About this report This report has been created thanks to the support of the TDS Charitable Foundation. The Foundation “works to advance education about housing rights and obligations in general”. In particular, the charity focuses on: • Best practice in the management of private rented housing; • Legal rights and obligations of those involved in the provision or management of private rented housing; • Using alternative dispute resolution for more efficient and effective resolution of disputes between landlords and tenants. The charity has provided a grant to Kate Faulkner who runs Designs on Property Ltd (designsonproperty.co.uk), to produce a series of reports and surveys on the private rented sector which are designed to increase knowledge on the private rented sector in England and to promote best practice. TDS Charitable Foundation Registration number: 1154321 2 About the authors Kate Faulkner Bsc (Econ) MBA CIM DipM was originally a consumer in the residential property market, buying, selling, renovating and renting property for many years. At that time she was a sales and marketing professional working with major brands such as PG Tips. Having enjoyed working in her spare time in residential property, she went on to set up one of the UK’s first property portals prior to the advent of Rightmove, then used her experience to help create on- and off-line tools designed to take the stress out of corporate relocations for employees. From here she moved to set up the Self-Build and Renovation Centre in Swindon, and subsequently helped build and professionalise a part exchange business. Kate was also a Future Homes Commissioner for RIBA. After gaining so much experience across the property market, Kate embarked on a mission to improve the way people carry out property projects, especially within the private rented sector. So whether it is banishing cowboy builders and rogue landlords, or helping the public approach a property project as simple as hanging a door or as complex as letting or building their own home, Kate is always on hand, either via her consumer website at propertychecklists.co.uk or at the property clinics she runs around the UK, to help landlords, tenants, first-time buyer, self-builders, renovators and investors carry out their property projects in the right way, using qualified people and industry experts. Kate’s consultancy, Designs on Property Ltd, provides help and support to companies and organisations that want to communicate better to the public, or to introduce new products and services which help people carry out their property projects successfully, first time around. She is fanatical that property facts and figures such as prices and rents should be reported correctly in the media, by the industry, and by organisations and policy-makers involved in the property market. Kate regularly appears in the national and local media, and comments on TV, radio and in regional and national newspapers on property news items of the day. In this way she continues to pursue her chief objective, which is to help ensure the public get an independent, honest view of what’s happening in the residential property market. This report is part of a series of reports and surveys that Kate will be producing thanks to the support of the TDS Charitable Foundation. The aim of the research provided is to improve the understanding of the private rented sector and to make recommendations on changes which will impact positively on the experience of landlords and tenants. 3 Akansha Saxena is supporting Kate in researching and writing these reports and has an interest in the real estate business as she comes from a family who have been in the property dealing business for three generations. She has experience in renting, buying and selling properties in different cities and understands what information is and is not available. In addition, she has four years of experience in IT services and, in her last role as a project engineer (enterprise integration consultant), was responsible for analysing and resolving the technical issues faced by clients in real time. She is currently pursuing an MBA from the University of Nottingham. She enjoys doing market research and data analysis, and is keen to better understand the dynamics of UK property market and help in producing the reports due to her previous experience and inclination towards real estate. She takes it as a great opportunity to learn about how the system works in the private rented sector in the UK. 4 What impact is enforcement of rules and regulations having on the private rented sector? Introduction The Residential Landlord Association (RLA) has identified that that up to June 2015, there were 145 laws with over 400 regulations that landlords need to abide by to legally let a property in England and Wales. And since then, more have been added. In addition to lettings rules, letting agents have to abide by those specific to their industry such as being a member of a redress scheme, as well as the normal rules and regulations associated with running a business. Recently, with the increase in legislation since this time, the Association of Residential Letting Agents (ARLA) has stated there are 160 lettings laws they need to abide by. Our first two reports – “Who are our Landlords” and “Accidental Landlords” – funded by the TDS Charitable Foundation show that most landlords are not professionals. They tend to have a full-time job; most have just one property and, with the majority of landlords being over 55, are heading toward to retirement. This report considers the practicalities of ‘average landlords’ and the wider market being able to keep up with current and new legislation which differs by country and in some cases by local authority, identifying: • Which are the key rules and regulations landlords (and letting agents) need to abide by; • Understanding who enforces these rules, and the fines or prison sentences that may apply if they aren’t adhered to; • How well levels of enforcement are being implemented to weed out substandard letting practices. 5 Our research and report shows that: • Many rules and regulations are not being enforced, partly due to a problem with clarity of the law; • Enforcement is being applied inconsistently; • There is a lack of leadership and funding to drive enforcement at a national level which would help to deliver a safer PRS through properties which are legally let. This leads us to conclude that, to improve the safety and legality of properties in the PRS, there needs to be a: • Review of existing rules and regulations to identify what is and isn’t working; • More co-ordinated approach to drive awareness of rules and regulations which do work well and, if known and enforced, genuinely protect both tenants and landlords; • Better, cost-effective model to provide consistent enforcement which drives out bad landlords and agents, and rids the sector of sub-standard properties. 6 Contents Section One: 145-160 laws for landlords and letting agents to abide by ................................8 Section Two: Rules and regulations introduced since 2015 .................................................17 Section Three: Who is responsible for enforcing the rules and regulations? ........................21 Section Four: How successful is enforcement of the rules and regulations to date? ...........25 Section Five: Industry views on lettings rules and regulation enforcement........................... 39 Section Six: Conclusions and recommendations................................................................... 46 7 Section One: 145-160 laws for landlords and letting agents to abide by The Residential Landlord Association (RLA) is the leading voice for landlords in England and Wales which offers help and support to landlords to run their portfolios properly. To support its work, it carried out extensive research into the number of rules and regulations that affect landlords across England and Wales and found that there were, up to June 2015, 145 to abide by. The 10 key areas that affect landlords and letting agents and require consumer (tenant) protection can be summarised as: • Energy performance certificates; • Property condition and repair; • Tenancy agreements and deposits; • Council tax and utilities; • Housing health and safety rating system; • Gas and electrical safety checks; • Fire safety; • Tenant possession and eviction; • Landlord licensing, including HMO regulation and selective licensing • Right to rent. In addition, if landlords are letting properties to those on housing benefit/local housing allowance (or the new Universal Credit) more rules and regulations apply. However, the rules and regulations for landlords and letting agents are more complex than just these 10 areas, especially if property is owned/managed across England, Wales, Scotland and Northern Ireland. With housing policy being devolved, the rules and regulations for the private rented sector (PRS) vary in each country. 8 Additional rules and regulations in Scotland For example, Scotland has much stricter rules on electrical safety via the Housing (Scotland) Act 2006. Since 1st December 2015, private landlords have needed to have an electrical safety inspection with an Electrical Installation Condition Report (EICR) for all new lets, which has to be renewed every five years by a registered electrician. This will apply to all lets from 1st December 2016. If a new or replacement
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