9. 9. Short Debate: Will the Housing (Wales) Act 2014 be Sufficient to Deal with Rogue Landlords?

Part of the debate – in the Senedd at 6:24 pm on 14 September 2016.

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Photo of Carl Sargeant Carl Sargeant Labour 6:24, 14 September 2016

Thank you, Deputy Presiding Officer, and thank you, Jenny, for your contribution this evening. I welcome the opportunity to update Members on the approach to modernising the private rented sector, which has played an increasingly important role in meeting people’s housing needs.

As Jenny says, rogue landlords come in many forms. A rogue landlord may be someone who fails to comply with the law through ignorance, someone who lets a property legally but pays no attention to its condition and potentially the dangers it may pose to its tenants, or somebody, indeed, who ignores the law and uses bullying and threatening behaviour to get what they want. There are many good landlords in the private rented sector, but its reputation has been damaged by the rogue element that the Member alludes to. I am pleased to say that the measures that we have introduced under Part 1 of the Housing (Wales) Act 2014 will help to address all these types of landlords mooted.

Rent Smart Wales will, for the first time, ensure that there is a comprehensive record of which properties are being let in the private rented sector and who has been licensed to manage them. It will be an offence for an unlicensed person to manage or let properties.

The first year has been deliberately light-touch, concentrating on raising awareness of the requirements of the new legislation. By the end of August 2016, around 20,000 private landlords had already registered, with some 34,000 landlords and agents having opened accounts, which is the first step in the registration and licensing process. Any landlord or agent wishing to let or manage properties has to also pass the fit-and-proper-person test. If someone cannot be considered to be fit and proper it means no licence. No licence means it’s illegal to manage or let properties. It’s as simple as that.

All landlords, agents and employees involved in letting and managing will undertake a training course, which will remind them of their obligations and signpost them to the resources of help. Of the people who have taken the course, 96 per cent of those who have completed the required training say that it has made them a better landlord. This means that Rent Smart Wales will not only tackle rogue landlords, but it’s helping to make all landlords better landlords. Being part of the scheme will ensure that they’re updated on laws relevant to renting out a property.

Once a landlord or agent has obtained their licence, a mandatory condition is compliance with the code of practice; the code sets out many of the statutory duties that landlords or agents are required to undertake. If they fail to comply, their licence will be at risk. Any landlord or agent who hasn’t complied with the legislation by 23 November risks breaking the law and being classed as a rogue landlord. We are therefore hardening our approach on non-compliance. Naturally, someone who is at the point of clearly taking action to comply has nothing to fear. However, landlords who do not comply, or fail to, will be subject to enforcement action.

We launched the second phase of our publicity campaign earlier this summer, and we are now widening the communications and activities with our partners. I’m glad that the Member saw it on the back of a bus while she was cycling in today. It’s obviously working.

In November this year I will bring into effect the enforcement regulations, which means an increasing focus on compliance, and an even sharper focus on action to tackle rogue landlords. Any landlord or agent who breaks the law will be liable to a fixed-penalty notice or a fine. If they remain non-compliant, they could face a rent repayment order and/or, indeed, a rent stopping order. Plus, they could lose the right to serve an eviction through a section 21 notice on a tenant. I will shortly be introducing the secondary legislation to make that happen.

We are working with Rent Smart Wales and local authorities to ensure that resources are available to fully enforce the legislation, and I pay tribute to the work that has been put in today by all our local authorities, but our action does not stop there. Retaliation eviction is an example of rogue behaviour by some landlords, and I’m pleased to say that this is also being addressed under measures taken and contained by the Renting Homes (Wales) Act 2016 should a landlord seek possession through the court. Following a complaint of disrepair by a contract holder, the court may refuse to grant the possession order should it consider that it was retaliatory in nature.

Contract holders will be provided rights within the contract that a landlord cannot take away or change. This will make it far easier for contract holders to hold landlords to account should they not adhere to their obligations in the contract. I recognise fully the issue that Jenny raised about making contacts. Sometimes, a disused e-mail address or a fraudulent phone number are not helpful at all in the middle of the night when the ceiling’s coming through, and this is part of the registration process.

Her final points: I note the suggestion that Wales should follow Scotland again around a ban on agents from charging fees to tenants. I’m still to be persuaded on this argument, not because I don’t agree with the Member’s intent, but I do worry about the serious risk involved in the process of simply transferring the landlord’s—. The agents will just simply transfer the fees to landlords and that increases the rent of the individuals that the Member refers to. So, agents are now legally obliged to publish their fees and face a £5,000 fine and potentially the loss of their licence if they fail to do so. But what I will do, and I’m grateful for the Member’s—the points that she raised today. And around the ability for Wales to legislate that, I will take some further legal advice and maybe the Member would like to share her legal advice with me. But, certainly, I will look at that again, and I will look at the perceived risk to tenants in this procedure should that transfer, because I wouldn’t want to see the fees—extortionate fees in some cases—just being transferred to the tenant. It would be just a misnomer in terms of the way we operate.

I would like to learn more from the evidence, from the experience, in Scotland before deciding whether these measures are necessary, but I’m grateful, again, for the Member raising such an important issue with us here today, and I will take this up with my team, and, hopefully, I can have some further discussions with the Member, who’s brought this short debate today.