Kerching! Birmingham City Council Decides to Cash-in on Landlords

Here we go again as yet another local authority, this time Birmingham City Council (BCC), decides to get on the gravy train which is selective licensing, with what is being touted as the largest selective licensing scheme ever attempted.

As always, this is being brought in under the misnomer of ‘improving housing quality for local residents’.

“The new scheme, if approved, would ensure that all privately rented properties in the designated area are of a satisfactory standard… would ensure landlords operating illegally are identified and enable those properties to be targeted for inspection … [and] would also provide a level playing field for good landlords and reduce the risk of exploitation of tenants.” Trots out the council in the usual hyperbole put into press releases by every council PR department.

In reality, as all Landlords now know, it will do very little to improve housing quality, but an awful lot to increase council revenues because, in fact, this is a tax on landlords.

Not only is it a tax, but it allows the council to introduce a lot of licence conditions that any landlord failing to comply with commit a criminal offence.

These licence conditions, and therefore the criminal offences, are being created by relatively junior council staff.

Do you remember voting to allow laws to be created by unelected junior housing officers? No, neither do I. But here we have it and if you as a landlord are crazy enough to accept their licence conditions without a fight and proper legal representation against your draft licence then you are walking zombie-style into their trap.

The trap; also a revenue collection scheme, is to be able to issue you with massive civil penalty fines and for breaking the “criminal laws” created through the back door by these unelected housing officers.

The fee that Birmingham City Council will charge you to impose these laws upon you will be £670 per property. That’s the licence fee for ‘up to’ 5 years.

It’s split into £375 for the application and processing and £295 for enforcement against you.

Words put into the mouth of councillor Shabrana Hussain, cabinet member for homes and neighbourhoods, by the City PR department, included this indication of the true purpose: “This scheme will contribute to the City Council’s priority of introducing more enforcement and licensing within the private rented sector.”

There you are.  Her ‘actual’ words in the press release.  And enforcement is where they make the real money.

There are hundreds of examples of councils fining landlords between around £3,000 and £20,000 for failing to apply for a selective licence. This is essentially a fine for tax avoidance since licensing is essentially a property tax.

Now, let’s do a little sum.  It is highly noticeable in the selective licensing report to council and consultation documents that they don’t mention the actual number of properties and the revenue to be generated. Everything is in percentages to make it difficult for us to know.

We did find this hidden away in the detail:  The total number of residential properties in Birmingham across all tenures is estimated to be 468,048, of which the Private Rental Sector is now estimated at 104,941 properties, which include 6121 HMOs. So that’s 98,800 which are not HMOs.  Let’s call it 100,000 to make the maths easy.

We can see that  BCC is proposing to make 28 out of 69 wards subject to selective licensing tax – so that’s 40% of wards and let’s assume roughly 40% of the 100,000 properties.

So there we have the licence tax: 40,000 properties at £ 670. A cool £26.8 million. Kerching!

And then they say that they expect only 75% of landlords to apply. So they will be aiming to fine the other 25% for avoiding the selective licensing tax.

So that’s 10,000 landlords and let’s say the average fine for non-licensing is £6,000 even though it’s often up to  £20,000. That’s another £60 million. Kerching again! And in addition to that, they will be spending a good chunk of your money on recruiting the new breed of bullying, arrogant and frankly evil ‘Housing Enforcement Officers’ who are indoctrinated that ALL landlords are criminals and must be punished.

Their job is to assess strip your properties by imposing massive Civil Penalty Fines on landlords not only for licence evasion, but they’ll then go on to find ‘compliance failures’ in your properties for which they can issue fines of up to £30,000 each.

And then, in the public-spirited manner of the horrible nasty people who enjoy these enforcement roles, they will advise the tenants of any unlicensed property to make a Rent Repayment Order to make you pay back 12 months’ rent to your tenants, so they will have lived free for a year at your expense.

BCC states they expect to enforce against 1,000 landlords a year. Experience shows that councils don’t target the worst landlords. They look into your financial circumstances and target the ones most likely to be able to be bullied into paying to prop up their coffers.

Let’s say they aim for £30,000 in civil penalties (just one or two compliance breaches) so that’s another £30 million.

And there you have it, ladies and gentlemen. Selective Licensing is going to bring in at least £120 million for the poor impoverished Birmingham City Council. Except. Like every other council, they’ve forgotten to mention that in any of their documents and press releases.

And they also state they expect to improve 1,000 properties a year by their helpful scheme of fining Landlords out of existence.

1,000 out of 40,000 properties, that’s not much of an impact for all of this revenue generation, is it?

If you are a Birmingham Landlord, fight for your lives and your business by completing the consultation document here https://www.birminghambeheard.org.uk/place/selective-licensing-consultation/

Oddly that’s not the link in their press release which takes you to a general page where the selective licensing ‘consultation’ is the 16^th entry on the second page.

If I was cynical, which god forbid, I would say that this was a deliberate attempt to stop people being able to find it. What a good job we can have total faith in councils to do the right thing for the electorate whom they are supposed to serve. Not.

Any landlord needing assistance to avoid enforcement action by ensuring that their property is fully compliant with the hundreds of applicable laws and regulations, assistance with applying for licenses and fighting nonsensical criminal-liability conditions in draft licenses and in defending against unreasonable council enforcement action should seek urgent professional assistance from a firm like Landlord Licensing & Defence.

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