Memorandum by the National Federation
of Residential Landlords (NFRL) (DHB 07)
The National Federation of Residential Landlords
(NFRL) is a voluntary organisation representing landlords' associations
throughout the United Kingdom. It has over 40 associations in
membership, which between them have over 10,500 members, many
with branch networks. NFRL is collating detailed views from members
of affiliated associations and will respond further to ODPM prior
to 9 June 2003.
GENERAL REMARKS
1. Letting property is described in the
paper as an activity, yet it is also stated that HMO landlords
can be considered to be small businesses. The current tax treatment
of landlords is as investors in receipt of unearned income. Landlords
who manage their own properties should be treated as small businesses,
with the major proportion of their income being assessed as "earned
income".
2. There are many regulations yet to be
produced with this bill, merely providing the Secretary of State
with the power to do so in secondary legislation. The detail of
the regulations will be critical to the viability of the private
rented sector and should therefore be progressed by positive resolution,
and not negative resolution as proposed.
LICENSING OF
HMOS
3. Licensing must apply to all tenures,
RSLs, Councils, etc. There must be a level playing field not only
for landlords but in the common interests of tenants. There is
evidence that some local authorities have brought in onerous HMO
Registration Schemes, when their own HMOs don't even comply with
basic fire safety standards. The basis of exemption being that
Local Authorities are not allowed to inspect themselves is unsatisfactory.
It is fundamental that a local authority must not be able to impose
requirements on the private sector that they themselves can ignore
for their own properties.
4. The requirement to be a fit and proper
person—any restrictions should be limited only to proven
and serious offences that affect property management. All "spent"
convictions must be ignored.
5. Transition arrangements are not discussed
in the paper. Registered properties under current schemes must
be passported "free" to licensing for the remaining
period of the registration.
6. Licenses in respect of a property must
be transferable, otherwise how will a sale/purchase of an HMO
be dealt with? An HMO has a value as a rental property with a
possibly significantly different value with no licence. How are
mortgage companies to deal with applications for lending on HMOs
on the basis that a license may or may not be granted after completion?
Pre-purchase inspections must be made available with the findings
to be guaranteed for a period of time. Rent must be payable for
the period it takes a Local Authority to issue a (new) licence
if a property is purchased which is tenanted.
7. Where inspections reveal significant
expenditure would be necessary in order that a licence can be
obtained, landlords must retain their right to dispose of the
property or put it to non-HMO use. Planning policies must not
be allowed to prevent deconversion, and HMOs must be allowed to
move from private residences to HMOs and back without the need
for planning approval. In such circumstances landlords should
not be required to pay a full licence fee.
8. Failure to obtain a licence—a penalty
up to £20,000 is disproportionate. The sanction of no rent
being payable by a tenant is an additional penalty. The area of
penalties needs to be considered in line with other regulation
applicable to small business and not be imposed twice for the
same offence, nor be a criminal offence.
9. Landlords cannot be held responsible
for the actions of their tenants. This is contrary to empowerment
of individuals and personal responsibility, which Government is
currently seeking to achieve, and is possibly against Human Rights
legislation. Landlords should be responsible for the control of
the tenancy. Tenants must be responsible for their own conduct,
however, landlords should be responsible for the regulation of
the tenancy.
10. Accommodation must be allowed in an
HMO without individual cooking and washing facilities in each
room. Currently, shared housing, which will fall under the new
HMO regulations will not meet many local authority requirements
for HMOs and could not reasonably be made to meet such requirements.
Student accommodation in the private sector is vital and a significant
number of student lets will be lost if no allowance is made in
this respect.
11. The requirement of compulsory licensing
of property with three storeys—Rooms in the roof and basements
must not be included: rooms in the roof, provided that they comply
with 1991 building regulations, and all basements should be excluded.
12. There must be a time limit on the time
it takes a local authority to issue a license. Once the application
is received, rent and compensation for occupation of the premises
must be allowed.
SELECTIVE LICENSING
OF OTHER
RESIDENTIAL ACCOMMODATION
13. If the main rationale of this proposed
legislation is to combat anti-social behaviour and bad landlords,
then it is totally illogical to exclude registered social landlords,
who under the criteria for designating an area of low housing
demand, satisfy all qualifications. It appears that the selection
of one group of landlords as compared with another group of landlords
is an infringement of Human Rights or Unlawful Discrimination
and must not be allowed to happen.
HOUSING HEALTH
& SAFETY RATING
SYSTEM
14. It is difficult to comment in detail
on the proposed system, as version Two is not yet available. However,
the following observations are made:
15. Any risk assessment system needs to
be easily completed to a uniform standard. It must not be allowed
to develop into a complex academic solution to what is effectively
a practical problem.
16. Environmental health officers (EHOs)
must not be the only persons who are allowed to carry out assessments.
Landlords, surveyors, professional witnesses, as well as consultants,
have a legitimate need to be able to train/qualify and be regarded
as experts on a level with EHOs. It is vital therefore that the
Sector Skills Council set National Occupational Standards.
17. Whilst the proposal will mean the HHSRS
will replace the fitness standard, it is unclear if other requirements
set by Local Authorities will be retained. For example, if a house
is found to be satisfactory under the proposed HHSRS, it is essential
that minimum room sizes previously set by LAs become irrelevant,
subject to the rooms meeting minimum sizes as prescribed by building
regulations. Not to set aside local standards would be a clear
indication that the HHSRS was not an adequate method of assessing
the property.
Richard Price
Chief Executive—NFRL
13 May 2003
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