Registration of Landlords - briefing note

Part 8 of the Antisocial Behaviour etc (Scotland) Act 2004 is due to come into force next year. The rules affect private landlords. Under the rules the landlords must register with the local authority in the area in which they rent out property. The rules make it a criminal offence for any unregistered person to let out residential property.

The registration process
Each local authority will compile and keep a register of registered landlords for its area. Registration is by landlord rather than by property. In the application for registration landlords must give details of any properties in the area that they are renting out and must tell the local authority of any changes at any time thereafter. Therefore if someone buys a new property to let it out or sells a property which he had let out he must tell the local authority.

Prior to a local authority registering a particular landlord the authority has to be satisfied that the applicant is a 'fit and proper person to act as a landlord'. The new rules set out the factors to be taken into consideration by the local authority in deciding whether a person is a fit and proper person. Has the person ever breached the criminal law, ever exhibited racist or sexist behaviour or ever broken any provision of the law relating to housing or landlord and tenant law? The rules set out that a local authority may remove a person from the register if the local authority no longer considers the landlord to be a fit and proper person.

The system is to be operated by each local authority in its own area. It is understood however that there will be changes introduced to these new rules to minimise the impact on good landlords and the burden for local authorities. The actual registration process is still to be finalised after a consultation period has ended. Guidance on the application process will be released along with the draft regulations later this year. This is expected to streamline the process as follows:

• Online and paper applications will be acceptable.
• In order to avoid duplication of process where a landlord operates in more than one area, it is intended that an on-line processing system would act as a central hub. Landlords can therefore apply to every local authority while only giving their details once, and view the registers for every authority
• Where a landlord already holds an HMO (Houses in Multiple Occupancy) licence or accreditation under a suitable voluntary scheme the landlord will already have been assessed a “fit and proper” person and so re-assessment is unnecessary.

The Executive predict that a reasonable fee for principal applications is likely to be £50 (payable every 3 years) but it is intended that there will be proportional discounts for landlords with large portfolios.

Consequences of not registering
As well as the landlord committing a criminal offence if he fails to register, the local authority can also serve a notice ending the landlord's right to collect rent. A landlord will however not be committing a criminal offence, nor can the local authority serve a notice ending the landlord's right to collect rent, if the landlord has made an application to the relevant local authority to register but the application has not yet been determined.

The Act does not say what an existing landlord is to do if his application for registration is refused. Presumably he must end the tenancy or sell. Both will take time. In the meantime he would seem to be committing a criminal offence if he continued to collect rent. The same issues would arise if a landlord was de-registered by the local authority or if an unregistered person inherited leased property.

Why have registration?
Part 7 of the Act allows local authorities to serve 'antisocial behaviour notices' on the landlord it appears to the local authority that an occupant of the property is engaged in antisocial behaviour. These notices will force the landlord to take action to deal with antisocial behaviour. Failure to comply with the antisocial behaviour notice is an offence leading to a fine. If the local authority takes further steps for a failure to comply then It can also mean that

• the landlord loses the right to collect rent
• the local authority can take over the management of the property for up to a year
• the local authority taking such steps as it considers necessary to deal with the anti social behaviour described in the notice at the expense of the landlord.

Conclusion
It is important that landlords are aware of their obligation to register. Landlords who think they may be affected by the new rules should take advise early to ensure that the necessary steps are taken to submit their application for registration at the earliest possible date.

What you need to know

• The Act applies to trusts, companies and partnerships as well as individuals.
• It makes it a criminal offence for an unregistered person to let out residential property.
• If a landlord does not register, the local authority can serve a notice ending the landlord's right to collect rent.
• If someone buys a property to let it out he must tell the local authority or if he sells a property which he had let out he must intimate this to the local authority.
• The local authority has to be satisfied that the applicant is a 'fit and proper person to act as a landlord'. A local authority may remove a person from the register if the local authority no longer considers the landlord to be a fit and proper person.
• The Act allows local authorities to serve 'antisocial behaviour notices' on the landlord requiring him to take action to deal with the antisocial behaviour of an occupant. Failure to comply is an offence leading to a fine and further orders against the landlord.
  
  For further guidance please contact Deborah Lovell
• This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.