Consultation on proposals for reviewing the current landlord registration fee structure and expanding the range of prescribed information applicants must provide to local authorities

Closes 7 Jun 2018

Consultation Contents

Annex A

Evidence relating to property condition

The Scottish House Condition Survey 2016 found that 48% of private rented sector households lived in houses with some disrepair to critical elements of the building e.g. roof; external walls; foundations; wet/dry rot and 24% lived in houses with problems of critical and urgent disrepair which, if not put right, would cause the fabric of the building to deteriorate further and/or place the health and safety of the occupier at risk. The survey also found that 2% of privately rented houses failed the basic requirements of the Tolerable Standard, meaning that they were not deemed fit for human habitation.

Another indicator of the problems associated with poor property condition is the   referrals made to the Private Rented Housing Panel prior to 1st December 2016 and, after then, to the First-tier Tribunal (FTT) by tenants who believe the property they rent does not meet the Repairing Standard. The Repairing Standard, contained in Part 1 Chapter 4 of the Housing (Scotland) Act 2006 covers the legal and contractual obligations of private landlords to ensure that a property meets minimum physical standards. Private landlords have a legal duty to ensure that rented properties meet the repairing standard at the start of the tenancy and at all times during the tenancy.

Table 1 gives a breakdown of 319 applications referred to the Private Rented Housing Panel in 2015, by issue type. The % figures total more than 100 as some of the applications included multiple problems.

Table 1.

Repairing Standard

Number

As % of applications received 

Wind and Watertight

201

63

Structure and Fabric

122

38

Water, Gas and Electrical Installations

179

56

Fixtures, Fittings and Appliances

156

49

Furnishings Provided By Landlord

63

20

Fire Detection Provision

94

29

Carbon Monoxide Provision

3

13

 

Annex B

Summary of current Prescribed Information for Application for Registration (Scottish Statutory Instrument 2005/558: Schedule 1)

This schedule has no associated Executive Note

1.  The date of birth of the applicant.

2.  Details of any licence, voluntary accreditation or registration held, refused or revoked in connection with letting houses in the UK by the applicant.

3.  A declaration of –

      (a) any convictions of the applicant relating to offences involving the matters listed in section 85(2)(a) or (aa) of the 2004 Act; and

      (b) any convictions of the applicant relating to offences in connection with any  matter relating to the provisions referred to in section 85(2)(c) of the 2004  Act and any finding of a court or tribunal that the applicant has contravened any of those provisions; and

      (c) any antisocial behaviour order (or interim order) within the meaning of Part 2 of the 2004 Act, and any antisocial behaviour notice within the meaning of Part 7 of the 2004 Act, that relate to matters provided for by section 85(3) of the 2004 Act.

4.  A declaration that the applicant complies with other legal requirements relating to his or her lettings.

5.  The identity of any other joint owner in relation to any property declared by the applicant under section 83(1)(b) of the 2004 Act, and–

      (a) whether that person is a member of the family of the applicant; and

      (b) which one of the joint owners is to be designated as the lead owner for the purpose of registration.

6.  Whether the applicant is registered as a charity and the relevant charity registration  number.

7.  Other names by which the applicant has been known.

8.  Where the applicant has not been resident for 5 years or more at the address provided under section 83(1)(a) of the 2004 Act, all previous addresses of the applicant in the last 5 years.

9.  Where the applicant is a company, the company registration number.

10.  Any court or tribunal judgements against the applicant under–

      (a) the Equal Pay Act 1970 (c. 41),

      (b) the Sex Discrimination Act 1975 (c. 65,

      (c) the Race Relations Act 1976 (c. 74),

      (d) the Disability Discrimination Act 1995 (c. 50),

      (e) the Employment Equality (Sexual Orientation) Regulations 2003 (S.I. 2003/1661); or

      (f) the Employment Equality (Religion or Belief) Regulations 2003 (S.I. 2003/1660).

11.  The contact address in connection with day-to-day management of the property.

 

Annex C

Information about proposed additional prescribed information

Tolerable Standard

The Tolerable Standard is a minimum standard for habitability introduced in the 1969 Housing (Scotland) Act, and updated by the 1987, 2001 and 2006 Acts. The standard has been the principal measure of housing quality in Scotland for almost 40 years. It is a "condemnatory" standard; a house that falls below it is not acceptable as living accommodation. Whilst it is local authorities that have a statutory duty and specific powers to deal with houses that fall below the tolerable standard, private landlords should not be letting houses that do not meet this basic standard.  

A dwelling meets the tolerable standard if it:

  • is structurally stable;
  • is substantially free from rising or penetrating damp;
  • has satisfactory provision for lighting, ventilation and heating;
  • has an adequate piped supply of wholesome water available within the house;
  • has a sink provided with a satisfactory supply of both hot and cold water within the house;
  • has a water closet or waterless closet available for the exclusive use of the occupants of the house and suitably located within the house;
  • has a fixed bath or shower and a wash-hand basin, each provided with a satisfactory supply of both hot and cold water and suitably located within the house;
  • has an effective system for the drainage and disposal of foul and surface water;
  • has satisfactory facilities for the cooking of food within the house;
  • has satisfactory access to all external doors and outbuildings;
  • has electrical installations that are adequate and safe to use. The
  • "electrical installation" is the electrical wiring and associated components and fittings, but excludes equipment and appliances;
  • has satisfactory thermal insulation.

Repairing Standard

The Repairing Standard, contained in the Housing (Scotland) Act 2006, covers the legal and contractual obligations of private landlords to ensure that a property meets a minimum physical standard. Landlords also have a duty to repair and maintain their property from the tenancy start date and throughout the tenancy.

A privately rented property must meet the Repairing Standard as follows:

  • the property must be wind and water tight and in all other respects reasonably fit for people to live in.
  • the structure and exterior (including drains, gutters and external pipes) must be in a reasonable state of repair and in proper working order.
  • installations for supplying water, gas and electricity and for sanitation, space heating and heating water must be in a reasonable state of repair and in proper working order.
  • any fixtures, fittings and appliances that the landlord provides under the tenancy must be in a reasonable state of repair and in proper working order.
  • any furnishings that the landlord provides under the tenancy must be capable of being used safely for the purpose for which they are designed.
  • the property must have a satisfactory way of detecting fires and for giving warning in the event of a fire or suspected fire.
  • the property must have satisfactory provision for giving warning if carbon monoxide is present in a concentration that is hazardous to health.

The Repairing Standard includes a duty to ensure that homes have smoke and fire detectors. This requires more than one alarm. Current guidance advises that all alarms must be mains wired with battery back-up. Alarms must be interlinked but this can be wireless.

Landlords also have a duty to ensure that homes have carbon monoxide (CO) detectors. CO alarms must have a battery that lasts the life of the alarm in each room housing a gas appliance (other than those used solely for cooking) and in any living room or bedroom if a flue from these appliances runs through it.

The Repairing Standard also requires landlords to carry out an electrical safety inspection which has two parts, an Electrical Installation Condition Report (EICR) completed by an approved electrician and a Portable Appliance Test (PAT) which can be carried out by an approved electrician or a landlord who has completed a relevant training course.

Private landlords should have regard to guidance issued by Scottish Ministers on:

  • satisfactory provision for detecting and warning of fires

https://beta.gov.scot/publications/fire-safety-guidance-private-rented-properties/  

  • electrical installations and appliances in private rented property

https://beta.gov.scot/publications/electrical-installations-and-appliances-private-rented-properties/

  • the provision of carbon monoxide alarms in the private rented sector

https://beta.gov.scot/publications/carbon-monoxide-alarms-in-private-rented-properties-guidance/

Energy Performance Certificates

The Energy Performance of Building (Scotland) Regulations 2008, as amended, place obligations on owners of buildings to provide prospective and new tenants with a domestic Energy Performance Certificate (EPC) when a property is rented out. EPCs are only required for a ‘dwelling’, not part of a dwelling. For example, where a lease is for a bedroom and shared access to bathroom and kitchen facilities an EPC would not be required. Any property which has been continuously left empty since before 1 Jan 2009 would not need to have an EPC

An EPC shows a property’s energy efficiency and also highlights potential improvements that could be made to save energy. An EPC has a unique 20 digit reference number and is valid for a period of 10 years. It does not have to be updated during this time.  EPCs are lodged on a central database.  If a tenant has not been provided with a copy of the certificate, they can search the central register using the postcode for the address.  Any concerns relating to the provision or authenticity of the EPC should be raised by the tenant with the relevant local authority.

Property advertisements

Details of the EPC rating must be included in commercial media when advertising the property for rent.  Building owners who fail to provide the EPC to the tenant or include the energy rating when advertising the property for rent could be subject to a penalty charge notice (minimum £500) in each case.

The Private Rented Housing (Scotland) Act 2011 requires registered landlords to include the registration number in communications to advertise a property. Where a landlord has applied to be registered, and does not yet have a registration number, the words “landlord registration pending” must be included in the advertisement.

Common repairs and Buildings Insurance

In flats and tenements, landlords share the responsibility with all owners within the building to maintain any part of the building that provides, or is intended to provide, support or shelter to any other part. The repairing standard includes work any part of the building which the tenant is entitled to use which is adversely affected by the disrepair. For more information about rights and responsibilities in relation to common parts see the guidance at

http://www.gov.scot/Topics/Justice/law/17975/CommonRepairCommonSense.

Section 18 of the Tenements (Scotland) Act 2004 imposes an obligation on the owners of flats within a tenement to insure their flats for the reinstatement value. A tenement is a building comprising two or more related flats which are owned or designed to be owned separately and which are divided horizontally. Examples of the type of properties are large houses which have been converted into flats. High rise blocks, “four in a block” and modern blocks of flats will also qualify as tenements, as well as the traditional sandstone or granite buildings of three or four storeys.

The obligation to insure will be met if the insurance cover is provided in whole or in part by a common policy of insurance. This will allow owners to have a combination of common and individual policies of insurance whether or not there was any provision for a common policy in the title deeds.

An owner won’t be obliged to insure against a particular risk, if after reasonable efforts, they’re unable to obtain insurance or the cost of obtaining that insurance is unreasonably high. The risks which owners should insure against are prescribed in legislation.

https://www.legislation.gov.uk/ssi/2007/16/contents/made

Licensing of Houses in Multiple Occupation

Mandatory licensing applies to houses or flats occupied by three or more unrelated people, who share bathroom or kitchen facilities. Houses in Multiple Occupation (HMOs) must meet physical standards set by the licensing local authority under Part 5 of the Housing (Scotland) Act 2006

The owner of an HMO must have a licence from the local authority where the property is situated. Licensing helps ensure that accommodation is safe, well managed and of good quality.

Before granting a licence the local authority must be satisfied that:

  • the owner and any manager of the property is 'fit and proper' to hold a licence
  • the property meets required physical standards
  • the property is suitable for use as an HMO (or could be made so by including conditions in the licence)

HMOs are also covered by fire safety legislation.

The local authority sets the standards required and also sets the fees charged for a licence application. Scottish Ministers have issued guidance to local authorities on the licensing of HMOs at

https://beta.gov.scot/publications/licensing-multiple-occupied-housing-statutory-guidance-for-scottish-local-authorities/

Legionnaires’ disease

Landlords have a duty to carry out a risk assessment of hot and cold water systems for Legionnaires’ disease. Under the Control of Substances Hazardous to Health Regulations 2002, landlords are responsible for ensuring that the risk of exposure to legionella in rented property is properly assessed and controlled. Part 2 of the HSE guidance published at http://www.hse.gov.uk/pubns/books/hsg274.htm  gives information on landlord’s duties. You can also get information on legionella from Scottish Water at http://www.scottishwater.co.uk/business/our-services/scottish-water-scientific/scientific-services/legionella

 

Mortgage, insurance and taxation

Private landlords should be aware of the impact of letting houses on mortgage and insurance commitments. Landlords should tell their mortgage lender about plans to rent the mortgaged property out. Some lenders have restrictions on who the property can be let to. Some mortgages may have terms and conditions that stop the property from being rented out to anyone. Letting the property without consulting the mortgage provider could lead to a break in contract.

Renting out property may also have an impact on existing buildings and contents insurance. Landlords should talk to their insurers and let them know that they plan to rent out their property. They will give advice on what steps to take regarding:

  • buildings insurance
  • contents insurance
  • property owners liability

For tax purposes, landlords will be treated as running a business if they are letting out one or more properties and so it is important that landlords understand their tax obligations. HM Revenue and Customs have a range of resources to help landlords establish the correct taxable status and what might be allowed as expenses. Further information can be found on the Renting Scotland website at

https://rentingscotland.org/articles/landlords-and-tax

and on the HM Revenue and Customs website at

https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

Tenancy Deposit Protection

When a landlord rents out a property, a tenancy deposit may be taken from the new tenant before they move in. A deposit is a sum of money which acts as a guarantee against:

  • damage to the property
  • cleaning bills if the property is left in poor condition
  • bills that are left unpaid, like fuel or telephone bills
  • unpaid rent

If any of the above happens, the deposit may be used to cover costs. If there are no issues when the tenant moves out, the deposit should be paid back to them in full.

The amount that can be charged as a deposit cannot be more than two months' rent. For example, if the rent is £500 a month, the landlord cannot ask for more than a £1000 deposit.

Once the tenant has paid the deposit for the property, it must be lodged with one of three approved tenancy deposit scheme providers operating in Scotland within 30 working days of the tenancy starting. Once the deposit has been registered with one of these providers, the following written information must be given to the tenant:

  • the amount of the deposit and the date it was received
  • the date the deposit was paid into the tenancy deposit scheme
  • the address of the property
  • a statement confirming the landlord is registered (or has applied to be registered) with the local council that covers the area where the let property is located
  • the name and contact details of the tenancy deposit scheme provider used
  • the circumstances in which all or part of the deposit may be kept at the end of the tenancy

Further information about tenancy deposit protection can be found on the Scottish Government’s website at

https://www.mygov.scot/tenancy-deposits-landlords/

 

Annex D

Processing landlord registration applications

Local authorities carry out a wide range of functions to process landlord registration applications, including:

  • clarifying and checking information provided in new and renewal applications (including use of power to obtain information);
  • clarifying details on paper application forms; requesting missing information, correcting details and adding paper applications to the online register;
  • conducting compliance investigations with a range of internal council departments and other agencies, such as Police Scotland prior to deciding an application;
  • sharing and reviewing information held by other local authorities in relation to the fit and proper person test (including complaints about the landlord);
  • provision of advice and assistance at the point of application to support landlords to be compliant, including referral to training courses and development of action plans to improve landlord practice so that the  landlord can meet the fit and proper person test;
  • seeking expert legal advice on complex applications;
  • preparation of advice and referral to committee for a decision on applications, for example where the case is complex or may be refused;
  • making and issuing decisions relating to approvals and refusals;
  • noting the register when applications are refused;
  • office costs such as printing, posting, photocopying; and
  • processing payments.

Specific tasks relating to property may include:  

  • checking information provided in relation to let property, including joint owner information;
  • requesting and checking documentation (for example, tenancy agreement; gas safety certificate etc.);
  • clarifying any address and/or ownership anomalies;
  • manually adding addresses to applications;
  • inspection of properties where there are concerns over the condition or safety of property let by the applicant;
  • cross referencing information provided on properties with a Houses in Multiple Occupation licence.

 

Annex E

Summary of current fees and discounts

 

Fee

Amount

Description

Discounts

Principal fee

£55

Paid by each landlord and agent applying for registration

 

 

10% discount (after any other discounts/exemptions):

  • available where an applicant submits an application using the internet based application system

50% discount:

  • On each application - available for on-line applications made to multiple local authorities at the same time; or
  • for an online application where currently registered, or has submitted an application to another local authority but hasn’t been notified of a decision

100% discount:

  • for joint owners who are not lead owners, Scottish charities, holders of an HMO licence

Property fee

£11

Paid for each property registered

 

100% discount:

  • properties included in an HMO licence

Agent fee

£55

Paid by a landlord where an agent is specified in the application, and that agent is not already registered or has applied for registration

 

 

50% discount:

  • where the agent acts for the applicant in more than one area and on-line applications made to multiple local authorities at the same time, 50% discount in each case ; or
  • where the agent is currently registered, or has submitted an application to another local authority but hasn’t been notified of a decision

 100% discount:

  • the agent is already registered with that local authority;
  • the agent has made a valid application to that local authority to be registered;
  • the agent would be exempt as a charity or HMO licence holder
  • the agent is a LA or registered social landlord

 

Additional fee

£110

  • Applies only after a LA has issued two separate requests for an application to be made
  • And two separate requests for the landlord to submit formal notification of appointment of an agent. (SSI 2012 No. 151 –  commenced 1/7/12)

 

None

Additional agent fee

£55

Applies when a registered landlord notifies that and agent has been appointed

(SSI 2012 No. 151)

 

50% discount:

  • the agent is already registered or has submitted an application with another local authority and is awaiting a decision

100% discount:

  • the agent is already registered or has sought to become registered with that local authority
  • the agent is a charity, local authority or registered social landlord

 

 


 

Annex F

Impact of increasing fees by Consumer Price Index 

This estimate represents the additional income across all 32 local authorities based on current fee levels and the number of transactions carried out using the online system only, in 2016.

Fee type

Proposed increase

No. of on-line transactions in 2016

Approx value of CPI increase

Principal application

£15

61,371

£920.5k

Property

£3

101,908

£305.7k

Additional

£29

2,612

£75.7k

 
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