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6. Enforcement/Investigative Action

Whilst relatively few authorities have robust processes and procedures in place to enforce landlord registration, some have began to utilise the powers to ensure compliance contained within the legislation. For example, East Lothian Council have issued rent penalty notices to landlords that have failed to pay for registration and East Renfrewshire Council cross matched the landlord register with Council Tax records and identified 600 potential landlords that had failed to register.

Generally authorities feel that pursuing court action and sanctions such as rent penalty notices or de-registration would be a last resort, and therefore would like to focus on providing the necessary support to landlords and agents to avoid sanctions being put in place. In particular local authorities were keen to receive more guidance on the types of enforcement action to be taken to identify non compliance and resolve issues. The following section outlines the six main areas where enforcement action can be pursued:

• failure to register;
• provision of false information;
• non-registered owners communicating to prospective tenants;
• failure to notify changes in circumstances;
• registered person no longer fit and proper; and
• de-registered person continuing to let property,

and outlines good practice examples and recommendations on how to implement each.

6.1 Risk Assessment

It is probable that specific combinations of tenants, property and landlords are likely to have a higher risk of non compliance than others and therefore may require a more robust framework for enforcement.

Any enforcement framework should recognise the need for different levels of intervention for different types of landlord groups and as such consideration should be given to assessing the level of risk associated with non-compliance.

Good Practice Recommendation

Whilst it is not being recommended that there is an annual review of each registered landlord and property, it may be appropriate to have a regime of review by random selection. The sample size used could be very small possibly around 2% per annum (relative to the size and scale of the sector) but targeted using local knowledge and risk assessment criteria.

For example, focus on the provision of particular information where there is a higher probability of failure to meet standards and therefore define where it would be most appropriate to increase the level of sample inspection. This could be in relation to safety issues in specific areas and therefore randomly select a sample of landlords and agents to provide the appropriate documentation. If they fail to do so, appropriate sanctions can be put in place. It may also be appropriate that landlords and tenants are aware of what a particular risk assessment is trying to achieve. So for example, should the focus be on gas safety it may be appropriate for tenants to be aware that they require to have a valid copy of the appropriate certification within the property. Raising awareness locally through local landlord forums, tenant associations, local publicity or mailing lists should also aid compliance.

Similarly random sample checks could focus on a number of areas such as;

• Gas safety certification;
• Electrical testing;
• Police or Disclosure Scotland checks;
• Communal repairs;
• Copy of lease/tenancy agreement;
• Copy of agents contract/agreement;
• Valid HMO certification; or
• Provisions for detecting fires.

Good Practice Examples:

East Ayrshire Council has a random sample system in place in the form of tenant questionnaires. If any questionnaires are returned highlighting issues of concern the Council would undertake further investigation.

Other local authorities with similar plans to implement random sampling in the future include;

• East Lothian Council;
• City of Edinburgh Council;
• Glasgow City Council;
• North Lanarkshire;
• East Renfrewshire Council; and
• South Lanarkshire Council.

6.2 Failure to Register

Failure to register whilst continuing or attempting to let a residential property is a breach of landlord registration. The sanctions available, if judged appropriate are:

• Guilty of an offence. Report to the Procurator Fiscal.
• Rent Penalty Notice may be served.

Only one authority had taken action against a landlord identified as failing to register, and this was linked to the landlord's failure to pay. However, some were in the process of developing procedures to target this particular group of landlords.

Good Practice Recommendation

Failure to register is a serious breach of landlord registration and failure to act on such breaches undermines the ethos of the legislation. The limited evidence on using the sanctions available has shown that they are effective in ensuring compliance. (Section 7 provides recommendations on implementing sanctions).

Appropriate and cost effective methods of identifying unregistered landlords should be devised and pursued as part of the enforcement process. Depending on the nature of the private rented market, some methods may be more appropriate than others, for example:

• targeting local universities, colleges accommodation offices, student representatives, student unions, attending Freshers and educational events may be appropriate in areas of large student population:
• working closely with local BME communities or religious groups to raise awareness.

It is recommended that all local letting agents, property centres, solicitors, property managers, newspapers, magazines, lettings web-sites etc are reminded that landlords require to be registered prior to advertising property to let and that they should only accept adverts from landlords with registration numbers. Likewise checks on properties that are advertised will also identify landlords who may be registered but have failed to register their complete property portfolio.

Edinburgh City Council did approach two of the large national newspapers to request registration numbers before accepting adverts from landlords and agents. They found that one as very helpful and keen to get involved, whereas the other refused to engage. Glasgow City Council also reported approaching letting web-sites such as S1 Homes.com to raise awareness of the scheme and had limited success. Both reported success however in engaging with local newspapers, however this may have cost implications. It is therefore recommended that national pressure from the Scottish Government would have a greater influence with these websites and newspapers and as the these organisations operate across Scotland it would be beneficial to all local authorities. It may be appropriate to consider re-enforcing the legislation to make it an offence to take an advert without proof of registration.

Good Practice Examples

The following outlines examples of good practice that local authorities have considered in the identification of landlords that have failed to register:

East Lothian Council: Where landlords have failed to pay for registration, despite completing an application form and receiving numerous finance reminders, have failed to submit a valid application and therefore failed to register, they have been served with Rent Penalty Notices.

East Renfrewshire Council: The team have cross checked the register against current Council Tax records and as a result identified 600 landlords/properties that may require to register. To date this has generated 40 new applications. There are also plans to appeal to the public to come forward with information although this will increase demand on the team and open up new lines of enquiry with the sector for which they require to prepare.

Orkney Islands Council: The registration officer in Orkney uses a number of methods to identify unregistered landlords or private properties:

• reports from housing officers of all private sector tenants applying for social housing and compare against the register;
• reports from Housing Benefit of all landlords applying for Housing Benefit but are not registered;
• receives information from the Advice and Support Service and Homelessness services of any private tenants or landlords coming to their attention and compare with the register;
• looks through the local property-to-let pages in the press and phones/writes to landlords to ensure that they are registered.

North Lanarkshire Council: Here the Council employed two ex-police officers to visit properties in two housing estates where there were concerns of unregistered private lets to identify landlords. These landlords were then approached to register.

Glasgow City Council: The team here adopted a wide range of methods to identify unregistered landlords or properties, including:

• consultation with Local Community Councils, Residents' Associations, Police and Shelter;
• checking local letting agent websites to identify unregistered landlords;
• checking shop notice boards and local adverts in popular private rented markets in the city; and
• working with local Housing Associations to identify private landlords using their factoring services.

In the future, Glasgow has plans to set up a text facility so that the public with concerns can easily contact the registration team and also to try and target landlords/agencies/press to only accept adverts from landlords with registration numbers.

6.3 Provision of False Information

The provision of false information or failure to include required information in an application form is a breach of landlord registration. The sanctions available if judged appropriate are:

• Guilty of an offence. Report to the Procurator Fiscal;
• Refuse registration if judged not to be a fit and proper person;
• Rent Penalty Notice may be served.

At present no authorities provided examples of sanctions taken against landlords for the provision of false information although some made suggestions of how they would determine whether landlords provided false information on their original application forms.

Good Practice Recommendation

It is recommended that the provision of false information is identified by a number of methods. This would be discovered by default if an authority were undertaking any of the checks to identify landlords that have failed to register. For example, this may uncover landlords that have registered but have failed to register their complete property portfolio.

Also it is advised that as part of a risk assessment process, a random sample of approximately 2% of approved landlords registration details are thoroughly checked against all information that the local authority holds. This could include a local police or Disclosure Scotland check if felt necessary. As included in section 6.1 above, landlords and agents may be asked to produce a sample lease, gas or electrical safety certification or properties may be inspected to ensure compliance with the repairing standard which includes the provision of appropriate fire safety equipment. This process of enforcement may therefore be closely linked to other corporate or strategic aims such as improving standards, reducing antisocial behaviour and/or public health and safety. As a result joint working arrangements may require to be put in place with other Council departments and areas of expertise if this does not exist within the current landlord registration team.

It should be noted that some authorities currently undertake a number of the checks outlined above as part of their fit and proper test. It is our recommendation that these types of checks may be appropriate for further assessment of landlords pending review (where there are serious concerns), but in the main should be reserved to the enforcement side of registration and not part of the standard application process.

For authorities that have asked for gas safety documentation as part of the application process and have found this to be a particular issue, it may be worth while investing in local awareness raising that as part of the registration process a landlord at any time could be asked to supply a gas safety certificate. Failure to provide this may therefore incur a Rent Penalty Notice until one is produced or de-registration. This may help speed up the application process.

6.4 Non Registered Owners Communicating to Prospective Tenants

Communication by a non-registered owner to a person about taking a lease or occupancy of a house is a breach of landlord registration. The sanction available if judged appropriate is:

• Guilty of an offence. Report to the Procurator Fiscal.

The purpose of providing for such an offence is to block a loophole in the legislation that would otherwise allow an unregistered landlord to have dealings with potential tenants to the extent of making a legally binding agreement, prior to the completion of a lease or occupancy agreement

Good Practice Recommendation

This is an area that local authorities have stated would be very difficult to prove and would require more information on the types of evidence to be gathered in order to pursue this matter locally and in court. This could include developing local guidelines.

It is recommended that the types of investigative and enforcement action undertaken would be similar to that noted in section 6.2 (failure to register) including checking local adverts and letting websites.

6.5 Failure to Notify Changes in Circumstances

Failure by a registered person to notify the local authority of changes in circumstances is a breach of landlord registration. The sanction available if judged appropriate is:

• review fit and proper person requirements and de-register if judged no longer to be a fit and proper person.

This is an issue that authorities appear to be discovering by default, for example when another landlord is trying to register a property they have recently purchased, only to find it is still registered under a previous landlord's name.

Good Practice Recommendation

As part of a landlord's approval letter, they should be reminded of their online user details and their legal obligation to keep their records up-to-date. It is recommended that local authorities utilise newsletters, other targeted publicity and the renewal process to remind landlords of their obligation.

Good Practice Example

South Lanarkshire Council issues a summary details letter which includes a covering note that outlines the information the Council have on file about the landlord and their properties and asks the landlord to check the details are correct. It encourages the landlord to get in touch if anything needs amended. This summary details information is downloaded directly from the IT system.

6.6 Registered Person No Longer Deemed Fit and Proper

A registered person being found to be no longer a fit and proper person is a breach of landlord registration. The sanction available if judged appropriate is:

• de-registration.

There have been concerns that it would be difficult to de-register a landlord or agent once they had been approved by a local authority. However, it is critical to the reputation of the scheme that landlords and agents continually comply and therefore where cause for concern arise that steps are taken to ensure compliance with legislation.

This is an area that is under-developed across all authorities interviewed.

Good Practice Recommendations

It is recommended that steps to ensure landlords and agents continually comply with their legal obligations would be covered by the risk assessment procedure as outlined in section 6.1 above.

It is also recommended that local authorities publicise the scheme widely to the general public and tenants and that any complaints made that may result in a breach of a fit and proper person assessment are dealt with promptly. This would link closely into the fit and proper person assessment criteria and the authorities' procedure for assessing landlords pending review.

It is also recommended that the authority would make appropriate options available to the landlord to rectify the situation before de-registration. This could be in the form of a "registration under review" status where an action plan containing conditions, timescales and monitoring procedures is put in place to ensure the landlord complies with the requirements for registration within a specified timescale.

6.7 De-Registered Person Continuing to Let Property

Where a de-registered person continues to let property, this is a breach of landlord registration. The sanctions available if judged appropriate are:

• Guilty of an offence. Report to the Procurator Fiscal;
• Rent Penalty Notice may be served.

To date no local authorities had taken steps to de-register a landlord. It is noted that this would hopefully be a very rare situation but it is an area whereby local authorities should have mechanisms in place should it arise.

Good Practice Recommendations

It was generally felt that de-registration would be the last resort and that every opportunity would be made available for the landlord or agent to comply. It is important that every step taken to ensure compliance including all letters sent, interviews held and conversations are recorded and minuted by the local authority so that should a landlord decide to appeal a decision, the authority can demonstrate the opportunities and advice given at every stage.

Where an authority has de-registered a landlord, this requires to be closely monitored to ensure that the landlord does not continue to let. Although as part of steps to ensure compliance a local authority may decide to register the landlord if they appoint an agent to manage their properties, the authority should be satisfied that the agent is registered and the authority has a record of the a formal arrangement between the landlord and agent. Should an agent be appointed, this also requires to be monitored. If the agent is no longer in place the authority may wish to review the landlords status as fit and proper and taken action to de-register.

Where a landlord is de-registered this means that they cannot let property and has major implications for the landlord and tenants. Processes should be in place to provide homelessness advice to tenants and also to inform Housing Benefit and Council Tax departments of the decision. Both Council Tax and Housing Benefit departments are useful sources of information in the monitoring of de-registered landlords.

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