Selective licensing report Nottingham did not want you to see

Below is a report from Nottingham Council they didn’t want you to see. The one several of us contributed to.

They agreed to send it to us voluntarily, but they didn’t. They paid an external barrister to issue a report on homelessness and they didn’t expect it to be so widely linked to Selective Licensing. So they wanted that bit (below) taken out and separated, and thought we’d forget about it. We had to fight to get this.

ANNEXE – COMMENTS SPECIFICALLY RELATED TO THE SELECTIVE LICENSING SCHEME MADE AT THE TIME OF THE LISTENING TO LANDLORDS PROJECT – OCTOBER TO DECEMBER 2018

During the consultation for the project referred to above, the Council had recently embarked on a Selective Licensing programme for all the private rented properties within Nottingham City.  As such, although the main report provided focusses on the homelessness issues related to private sector accommodation and what landlords can do to help prevent this, there were many comments received regarding the selective licensing process and it was felt that this should be included as a separate annexe, not least as consultation for the review of the Homelessness Strategy with private landlords, which had instigated this project, had identified that private landlords felt that they were not being listened to.

Readers of this Annexe should not that the following comments come from only those landlords and agents who were involved in this project and that all the landlords and agents spoken to had submitted their applications for selective licensing.

I would also say that at the time of this project, only one third of all privately rented properties had had their licence applied for.  The consultation took place between October and December 2018 and the requirement to make the application for the licence was that it was to be done by August 2018.

I have headed the areas where the most comments were received for ease of reference, namely:

Consultation with landlords prior to the introduction of the Selective Licensing Scheme

In 2017/18 the Council undertook two consultation events which many private landlords attended to notify them of the proposed selective licensing programme and the requirements that would be expected of the landlords in order to achieve a licence.

One agent that I spoke to said that many of his landlords could not attend the consultation events as they were on work days within working hours.

The Council’s website also set out what would be required from landlords in order to obtain a licence.  Initially, this included an up to date NICEIC Certificate and floor plans of the properties including sizes as well as wired in smoke detectors.

Taking this on board, landlords who attended the event started to look, and in some cases, get their properties ready to be able to make their licence application when the Scheme went live.

They told me that in order to obtain just the NICEIC Certificate, without any works having to be done was a cost of approximately £150 per property.  Added to this, to draw up floor plans was costing the landlords time and/or money.  They approximated it at £40 per property.

They said that many of the properties due to their age and construction did not make installing “wired” smoke detectors a viable option.

Several of the landlords involved in the project advised that having looked at the requirements for the NICEIC Certificate and/or the significant cost in order to meet those Regulations, due to the age and character of their properties, and the inability to wire in smoke detectors, decided to sell those properties as they would not be financially viable to continue to let on current rental incomes.

One landlord I spoke to said that he had let properties for many years and very rarely had to serve notice on his tenants but as a direct consequence of the requirements for selective licensing as they were indicated at the initial consultation stage, he had had to serve 10 notices and had to evict a tenant purely due to the selective licensing requirements and the fact that they could not be met at this property.

A second consultation event was held in June/July 2018, literally at the point where the landlords could make their applications for licence prior to the Scheme going live on 1^st August, 2018.

At this meeting, which was very well attended by private landlords operating within Nottingham, they were advised that, that having taken legal advice, the Council were not going to pursue the NICEIC certificate requirement to wire in smoke detectors.

But many of the landlords that I spoke to during the consultation told me that they had already done this or had taken measures to get rid of those properties that could not meet the requirements.

There was no comment from the Council about when the legal advice had been obtained or for how long they had decided that they would not pursue this.

The landlords accept that, obviously, to have a property meet these standards is always good but this did come at a cost which has to be met, particularly for those landlords where income levels are low and therefore rent had to be increased to meet this.

Another point made during the original consultation was that a requirement would be that all the landlords would have to have an address or managing agent in the UK.

Comments were made that some landlords felt therefore that they had to sell up as a consequence of this as they had retired to America and Spain but had kept their properties in Nottingham with tenants that they had had for many years.  As they did not want to evict their tenants, they had sold properties, at a reduced price, with sitting tenants to protect them.

Those who consulted with me accept that properties need to be kept to the highest of standards when being rented out and accept that this does cost money to install and upkeep but are unhappy that having been told of what would be required, the Council changed their mind, following legal advice, resulting, for some landlords, in significant amounts of money being spent to obtain something that was no longer necessary for the type of property being let.

The Selective Licensing application process

Although the Scheme went live on 1^st August, 2018, landlords were able to apply and many did apply in June and July 2018 so that there was no chance of them getting penalised by way of a Rent Repayment Order for not doing so.

In fact, having attended the first Landlord Forum following the introduction of the Selective Licensing Scheme, I noted that some 12,000 licence applications had been made at that time, representing approximately one third of the total number of private rented properties that needed to be licensed.

The first comment that landlords made regarding the application process was the way in which the Council had notified, or as they stated, not notified the landlord of their responsibility.

Even though the responsibility to obtain and pay for a licence fell to the landlord and/or their agents, and accepting that two consultation events had been undertaken and information had been placed on the Council’s website, the Council chose not to write to the landlords, to whom the responsibility fell, to both make and pay for the licence, but to their tenants.

It has to be said that this “incensed” the landlords that I spoke to.  Firstly, why did the Council not write to the landlord directly at the property but also the tone of the letter that was sent seemed to imply to those who were involved in this project that the landlord was a “rogue”.  They advised that the tenants had received emails stating in large bold print “REPORT YOUR ROGUE LANDLORD”.  The emails even stated that the Council would work with the tenant to take the landlord to Court.

The people involved in this project do not deny that there are some bad landlords out there for whom the Council should assist tenants to prosecute but they feel very aggrieved, although not surprised, that the Council would appear to think that ALL private landlords are “rogues” and should be pursued to Court.

They indicated that at least 12,000 might not be as, although their properties might not be perfect in terms of the requirements for Selective Licensing, at least licences for these properties had been applied for.

Those involved feel that there is a real atmosphere from the Council that private landlords are not wanted in the City and as a result there is an abject mistrust of the Council by the landlords.  Comments made regarding this included the fact that Councillors never attend any of the events held for private landlords and agents.

Communication from and with the Council is a massive issue for those involved in this project.  Firstly, they feel that they are some sort of “second class citizen” and/or some sort of “oligarch” as all press releases from the Council and, in particular, Councillors make them all out to be bad people who are just interested in money.

They accept that there are some bad landlords out there but reject that all private landlords treat their tenants badly, make them live in bad conditions whilst charging astronomical rents in order to keep a “certain type of lifestyle.”

There were also comments made by those involved in the project regarding trying to apply online.  One of the landlords that I was put in touch with was Mick Roberts.  He said that he has a significant portfolio of properties in the city.

He works with Housing Aid at the Council to provide privately rented properties to some of their clients.  He is a member of DASH.  As such, and as part of the Licensing Scheme he benefits from the reduced fee.

However, he, as just one example of the comments raised, does not understand why, if the Council, through their DASH Accreditation, already hold the majority of the information required for the Selective Licensing Application, cannot transfer it to the Licensing application, particularly as those who are DASH members enjoy reduced fees.

Another issue that he and others who hold or manage more than one property was that the computer system utilised for the Selective Licensing process does not have the ability to reuse the documentation that has to be provided for verification purposes such as passports, proof of no convictions, no County Court Judgments, etc.

One agent who I was asked to speak to by the Council, told me that he had spent the last three months making 172 selective licensing applications.

Also, he and others don’t understand why the application requires so much information regarding the household composition of their tenants around disabilities, etc.  Obviously, they are only getting the snapshot at the time when the application is made but what if, during the process, the tenants leave or their household composition changes eg they have a baby?

There are other issues in that although drop down lists are provided to help landlords, they don’t include all the “mortgage lenders” for example and there is no capacity to put in one that is not on the list.  This then means that the landlord has to put in something that is not correct in order to complete the application but then runs the risk of an additional charge from the Council when they do their checks and find out that it is not the right mortgage lender.

Another comment made was around the floor plans.  As they pointed out, these are provided as part of the EPC rating for the properties which is now required by law under the Deregulation Act 2015 for all landlords wishing to utilise s21 notices.  However, once again, there is no way of transferring this information into the Council’s computer system.

Added to the issues with the actual computer system, there were also comments and issues raised with regard to some of the requirements that were being imposed within the application.

One of these was training for landlords.  The first question they asked was, what sort of training and who was going to do it.  Secondly, for those landlords who did not and had not ever let a property without the use of a letting/manging agent they did not see the need for them to have it.  One agent, who is ARLA registered said that he was aware of some large landlords, who utilised agents, getting rid of their investment properties in Nottingham for this very reason and investing their money elsewhere in the country, where these restrictions were not imposed.

Also, comments were made about the 10 pages of conditions that the Council wanted for tenants that had already moved in.  One landlord said that these conditions were twice as long as his actual tenancy agreement.

Also the need to have an ASB policy to manage their tenants.  One of the letting agents that I spoke to said that he has drafted it for all his landlords as there wasn’t a template available for landlords to use.  It is accepted by landlords that they have a responsibility to manage their tenants and deal with issues as the occur but in terms of anti-social behaviour this is a city wide issue with resources available to the Council and the Police to assist and deal with issues as they arise eg if the tenant is committing a criminal offence then the police should intervene and the landlord should deal with removing the tenant using the correct legal procedure.  The feeling that landlords had with regard to the ASB policy and procedure that was required was that they were on their own.   A comment from one of the letting agents sums it up for all the comments raised by the other landlords that “private landlords take all the risk with no support”.

Many of the requirements to enable landlords to be considered for a licence needed to be done within a month.  Several of those involved in this project said that even though Government Legislation was giving landlords 2 years to get some things done in terms of electrical testing, etc, they were being given a month.

Another issue was that there was no specific officer dealing with applications.  One of the landlords said that eventually he was given a designated officer to look after his applications but felt that was just because he made a “nuisance” of himself.  Added to this where there are discrepancies, such as having to put in the wrong mortgage lender as there the right one is not in the drop down box, the application gets rejected and landlords are given 14 days to rectify it otherwise there are additional charges incurred.  Using the example I have just given, one landlord said he did not know what to do to rectify the problem but was not given a solution either.

Given the serious nature of this process and the implications if it is not complied with, those involved in this project felt that it would have been better if landlords could automatically be given a point of contact or designated person who would help them to alleviate any problems with the applications in the first place.

As indicated on the website, the Selective Licensing Team advised that they would be checking a certain percentage of properties to ensure that they were meeting standards and the information provided within their applications.   Properties included within the DASH accreditation would not be inspected, hence the lower fee.  One of the agents that I was asked to speak to by the Council said that several of the properties that he managed had been inspected and that he felt that the approach to repairs and issues were far harsher than those imposed by DASH.  He showed me examples of letters from the Selective Licensing Team requesting remedial work to properties otherwise licences would not be granted.   As an example one of these included a historic stain to a ceiling from a water leak which had been repaired.  Under DASH the landlord would have been required to repaint that as part of a relet process before they let the property again.  However, for the Licensing Scheme the agent was told that it would need to be done within a certain time frame otherwise it could affect the licence application and/or may result in further action.

Added to this, issues were raised about the ability to track works that were required.  Basically, the landlord is given a sheet of paper with the works required.  The landlord then has to advise once this work is done.  Issues have been raised with this.  One of the agents I spoke to said that he had raised this with the Selective Licensing Team in that there could be an issue if, potentially, landlords lost the list and secondly in being able to report and track when works were done.  The system is paperless and there appears to be no way of varying the licence when things are done on the computer system.  However, when he raised this issue with the Council he was told that as a “large agent [he should] have a way to manage disrepair and works, so maybe [he] could just add it to this system and then it would be monitored in the [same] way as [he] manage[s] general repairs.”

The agent’s issue was not about his ability to monitor repairs and Housing Health and Safety Rating System works but the Council’s ability to monitor and the landlord’s ability to be able to let the Council know and/or vary their licence application to show that they had done it.

The cost of the Licence

Throughout all the consultation events and meetings that the Selective Licensing Team have had with the private landlords they have constantly reiterated to them that the licence fee should not be passed on to their tenants by way of a rent increase.

Landlords, both themselves and through the Landlord Associations they are involved with, are aware of other selective licensing schemes across the country.  However, they feel that the cost of the licence in Nottingham is far more than many of the other schemes are charging.  Admittedly, if landlords are DASH registered the fee is reduced and they accept that only half has to be paid initially with the other half becoming required at the point the licence is issued but even so, again, for some landlords where margins are very tight, the fee together with the cost of remedial works can make the property unviable financially.

What landlords don’t understand is why the fee is so much.  They don’t know what they are paying for.  Other than checking through the online application that each landlord has to make for each individual property, checking a small percentage of the properties and issuing licenses, they are not sure what else the Council is doing for them individually.

Their opinion is that they are being penalised for being good landlords and making their application as required by the Council.  Effectively they believe that they are having to pay for the Council to investigate those landlords who don’t make their applications although one of their issues is that they don’t see any action being taken in this regard at the current time

Contrary to public opinion, and that of the Council, such profit margins are not large and although landlords will be asset rich they may be money poor.  Therefore, the impact of the removal of the tax relief added to the selective licensing fees and related costs may remove the vast majority if not all the profit or income from the property for the landlord.

To put it into context, I have undertaken research through Zoopla and Which buy-to-let mortgage calculator to show the financial implications for those whose “business” is being a landlord ie those almost 40% of private landlords operating in the City.

Looking at house prices as at 3^rd January 2019, I looked at the amount of money that would be lent on a buy-to-let mortgage on current market rent and the local housing allowance for 2016/17 (this was the most up to date figure I could find on your website).  The findings are set out below:

There will also need to be money set aside for landlord insurance and to deal with general repairs as well as statutory obligations such as an annual gas safe test, etc.

Several of the landlords involved in this project had assisted the Council with providing accommodation to their customers at lower than market rents to make them more affordable to their customers due to such low and fixed Local Housing Allowance rates.  Several of those landlords said that they had not put their rents up for many years.

However, with the cost of the licence fee, the time spent by landlords making the applications, providing the documentation, dealing with the inspections, getting the works done, developing the required policies, etc, the cost has to be found from somewhere and where margins are tight, several of the landlords have had to put their rent up.

They say they are not passing the licence fee onto their tenants but all the stuff that they need to do in order to get the licence.  One landlord said that he has had to put up some of his rents but all of his tenants, when he had explained why, said that it was OK and would pay the new charges.

One landlord was planning on a scheme of works for some of his properties but had had to put it on hold in order to find the money to pay the first half registration fees.  He showed me an email from his tenant, which he had received after he told them why he could not put the new kitchen in yet and they were rightly upset.  I understand this has already been shared with the Council.

The point of those involved in this project’s issues in this regard is that even if the landlords are not putting the rent up, the impact on tenants will be felt as the money has to be found from somewhere and it can impact on improvements that the landlord might have wanted, although not needed, to do to maintain their investment but also make their properties nicer places for their tenants to live.

As stated above, those involved in this project believe that there is an impression of the Council that all landlords are “loaded” and make massive profits from their properties.  Where a property is inherited then that might be the case but, in general, many of the landlords, are investing in property to achieve margins that are better than putting the money in the bank but not necessarily large amounts in percentage terms.

Granting of a Licence

The biggest issue for landlords in this regard was when is this actually going to happen.  The project and consultation that I undertook was done around Christmas 2018 and even though all of those involved in the project had applied for their licences in June/July, 2018, none of them had received a licence at that time.

The landlords accept that approximately 12,000 applications had been made and there were only so many staff to check them but on paper they should have had upwards of 30,000 applications.  How would they have coped with that?

Added to that, several of the landlords involved in this project were accredited with DASH and given that none of those were to be inspected they thought that they would have got their licences back almost immediately.

Given that landlords were being given very short time frames to make applications, get works done, respond to queries and upload documents, why was this not the case for the Council.

As most of those involved with the project said, “this is dealing with landlords who are bending over backwards to comply and get their licences, what about the ones that aren’t”

What about the “bad” landlords?

Those involved in the project know that it is a 5 year programme for licensing and that the Council can’t do everything straight away but they don’t see the Selective Licensing Team targeting either the landlords who have not applied and/or the landlords that they know are bad.

Landlords and Agents that I spoke to told me of areas in the city where there are bad landlords who don’t look after their properties or their tenants.  One agent had been asked to take on a property and upon inspection had found it lacking in terms of the Housing Health and Safety Rating System.  The landlord had not applied for their licence and so the agent referred it to the Selective Licensing Team but nothing was done about it.

Those involved in this project had applied for their licences and they felt like they were being persecuted for doing it rather than being thanked, when they see that those that haven’t applied are not been chased or pursued by the Council at all.

All those involved in this project want bad landlords eradicated from the city not least because they give all landlords in the city a bad name.  They accept that something needs to be done about it but don’t think that the Selective Licensing Scheme is the right way to go about it.  They refer to civil penalties available to the Council through recent legislation which could be used to fund enforcement action against those landlords that the vision for the Licensing Scheme is trying to achieve.  However, those involved in the project say that when they have broached with this the Council they are not listened to.

In conclusion, those that I spoke to and those who responded to the questionnaire had many comments to make about selective licensing.  I have endeavoured to collate these and give you an overview of their issues and opinion.  However, below is a selection of the  actual comments made which I feel is representative of the feelings that private landlords have around the Scheme.

“End selective licensing.  Use the pre-existing powers granted to the Council to tackle with the tiny minority of rogue landlords.”

“Stop penalising good landlords.  I have sold one already in Nottingham as s24 and selective licensing made it run at a loss.  The Council already has the powers to deal with bad landlords and needs to spend some effort finding them.  They are unlikely to be those who have applied for a licence.”

“Would avoid working with the Council at all costs as they are punitive to landlords and unprofessional.”

“Stop bothering us with unnecessary licensing.  I wouldn’t want anyone to live where I wouldn’t be prepared to live.  We look after our property, we don’t make any money out of it, we hope our tenants are happy there.  The licensing is entirely unjustified in the Park where our flat is situated.”

“Having been a landlord for 10 years plus and have always had managing agents looking after my flat, I don’t see why I need a licence from Nottingham City Council to show I am a good landlord.”

“The Licence fee has just caused me to increase the rent for the first time in 4 years.  I gave the same paperwork that I already give to my ARLA registered letting agent.  It seems a pointless duplication of effort to the detriment of the tenants.  Still heard nothing back since application in August.  I am minded to sell the house as it is all becoming too much trouble.”

“The Council should stop penalising the good landlords which there are a lot of.  Landlords in the past have worked with Nottingham City Homes and Housing Aid to secure tenancies for social housing tenants.  Now landlords are being targeted in the form of emails in large bold writing “REPORT YOUR ROGUE LANDLORD” and informing tenants that they work with them to take the landlord to court.  It is very unlikely that landlords will want to work with such organisations that are current the throat of landlords.  If the Council would like private landlords to offer their accommodation to their clients they shouldn’t bite the hand that feeds them.”

“… crucial areas need to be addressed to support landlords, control rogue tenants and the local authority to identify rogue landlords so they can provide safe affordable homes.”

“Work towards removing the atmosphere that landlords are not welcome in Nottingham.”

Mel Cant LLB (Hons) CIHM

Specialist Housing Advisor

Local Government Association

September 2019

Any of you Landlords or tenants on Twitter fuming about this, please have your say.
Licensing are @NottmRenters
This is the link.
https://mobile.twitter.com/NottmRenters/status/1204441654154944512

https://t.co/Dj5plThJEY

Licensing are back to saying Landlords can pay £3 a week for the License.

Share this to all tenants who have been evicted because of Licensing or living in hotel or hostel or homeless or who’s struggling to get a house or paying extortionate rents because private Landlords are now having to charge to pay for these ridiculous fees.

The council for 18 months has denied Licensing has caused rent increases, yet in this post they now admit it.

My words below:

Please show the tenants of Nottingham where the landlord can pay £3 a week?
Why did u take off me over £17,000 for the License fees alone? Which as we know, rent pays everything. If not enough rent is in for that, rent has increased.

What about the accreditation cost which is £800 every 3 years?
Does your phone contract charge you £1800 up front? Cause that’s what your Licenses do. If there was a gym, and u charged 5 years up front for the gym, there would be no gym.

What about landlords you’ve pushed over the edge with your conditions that have to now leave with only a Letting agent could comply with. Are they free?
The tenants who already had a good house, why have they had a rent increase to pay for this?

What about the electrical certificates u made everyone have and then backtracked after all Landlords paid, in my case £12,000. Tenants of Nottingham have had enough of your lies.

What about the people we’ve had to pay to get the license applications done as instructed to by your staff-You will have to pay someone he said.

What about American landlady’s and their Nottm tenants of 7 years who were perfectly happy with each other, now Licensing here, she can’t run the house from USA. Letting Agent free is it? That tenant now homeless.

At last count, you’d had over £9 million pounds in and done 176 inspections. That’s £51,000 an inspection. That’s totally taking Nottm tenants for a ride.
What about tenants u now making us kick out cause they’ve had a baby and now in your eyes overcrowding?

What have u ACTUALLY done for Landlords and tenants that already had good houses? Why have they had to pay this extortionate charge out when they didn’t have a problem pre-Licensing?

Some Landlords were actually trying to look after tenants charging less than market rent, but can no longer now you’ve whopped these excessive fees on them.
www.selectivelicensingtruth.co.uk

Again tenants please email the below. They don’t listen to Landlords and if u don’t shout out, they don’t think there is a problem with u paying extortionate rents.

Please send em all.

Please email:

Councillor who responsible for Licensing fee increase
linda.woodings@nottinghamcity.gov.uk

Nottm Council Labour boss who supports Licensing
david.mellen@nottinghamcity.gov.uk

Licensing email
selective.licensing@nottinghamcity.gov.uk

Mick Roberts

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