« Previous | Contents | Next »
Listen
A REVIEW OF THE FIRST YEAR OF THE MANDATORY LICENSING OF HOUSES IN MULTIPLE OCCUPATION IN SCOTLAND
CHAPTER ONE SETTING THE CONTEXT
This chapter sets the context for the research by identifying the early concerns that arose about the operation of the mandatory licensing scheme. A more detailed review of the mandatory scheme and its antecedents is provided in Chapter 3.
INTRODUCTION
1.1 For many years, policy and legislation for Houses in Multiple Occupation (HMOs) have focused on the private rented sector in Scotland. Many HMOs provided satisfactory standards and management but concern about persistent poor conditions, the vulnerability of many private tenants and failing management by private landlords, shaped the political perspective of central and local government that legislation and regulatory intervention were essential. Decades of public health and housing legislation reflected attempts by successive governments to improve the housing and health standards and protect tenants in multiply occupied, privately rented accommodation. No matter the very small size of the private HMO sector, this has not proved a straightforward task. Success has never been more than partial.
1.2 The most recent and most radical response by government to the problems of HMOs came on 1 st October 2000 with the introduction by Scottish Executive of a duty on all local authorities to establish a scheme for the licensing of HMOs (Scottish Executive, 2000a). For owners to obtain a licence, their HMOs had to meet certain standards. Without a licence, a HMO could not operate and would have to close or at least cease to be a licensable HMO.
1.3 Compared to previous government interventions, the introduction of mandatory licensing explicitly broadened the HMO policy framework. No longer was the sole focus of regulation to be driving up standards and management in the private HMO sector. The national licensing scheme required HMOs across the private, public and voluntary sectors, unless specifically exempt (see para3.23), to be licensed in a phased implementation of the scheme. The aim remained the same - to secure improved living standards and safety of tenants and residents not living in self-contained accommodation. However, the beneficiaries of this broader regulation included not only private tenants but public sector and voluntary sector residents living in a wide variety of shared accommodation from woman's aid refuges to very sheltered housing schemes.
SETTING THE SCENE: INITIAL REACTIONS TO THE MANDATORY LICENSING SCHEME
1.4 Despite the consultation that preceded the introduction of the mandatory licensing scheme, it quickly became the subject of much debate and some dispute. Three major issues arose - the scope of the scheme, the standards for HMOs to meet and the extent of evasion of the scheme.
1.5 In response to representations about the potential impact of the scheme on particular types of HMOs not located in the private rented sector, particularly Abbeyfield Homes, the Social Justice Committee of the Scottish Parliament held an inquiry into the early operation of the licensing scheme. The committee heard a number of conflicting views about inappropriate inclusions of certain types of HMOs and about the costs and inconsistency of implementation of the scheme. Its interim report recommended 1, amongst other issues, exemption of Abbeyfield Society homes, Scottish Woman's Aid refuges (although it is local woman's aid organisations that manage refuges), university accommodation and " similar for which a clear definition would be required" (Scottish Parliament, 2001: para.5). However extending exemptions is not straightforward. Issues such as equity of treatment, equivalence of alternative regulatory regimes, proportionality in relation to safety risk and the appropriateness of licensing standards for certain types of tenants are not easy to resolve or around which a consensus can easily be achieved.
1.6 The second major issue that arose concerned the standards that HMOs had to achieve. The Guidance (Scottish Executive, 2000b) accompanying the Licensing Order set out the recommended standards that all licensable HMOs should attain. Again, these had been subject to prior consultation and drawn up by a task group involving external organisations as well as Scottish Executive officials. The guidance provided statements on appropriate property standards and in the case of fire safety, very detailed standards, for different sizes and types of HMOs. The Guidance also set out a range of recommended standards for how owners of HMOs should manage their tenancies. The debate largely centred round the appropriateness of the recommended fire safety standards, the advisory nature of all the standards and the consistency of application of the standards across local authorities and regional fire brigades. Underlying this debate have been complex issues involving technical analysis of risk and building structure but also professional judgement and, at times, subjective opinion about risk, lifestyle and the behaviour of those who live in HMOs.
1.7 The third main issue that arose as the scheme unfolded was a growing concern by local authorities, shared by some organisations and by owners who came forward to licence their properties in the first year that some landlords with larger HMOs were not coming forward to have their properties licensed. Hard evidence on numbers was difficult to come by and no more than anecdotal, but there was general acknowledgement across interested parties that there was a problem and one that could become much more serious as the scheme encompassed smaller HMOs in future years. Whether non-licensing was due to ignorance or conscious evasion, the consequence was seen to be unfair by the owners who had licensed their HMOs. The consequence for government and local authorities was that it could undermine the credibility of the scheme if not resolved.
THE RESEARCH INPUT TO THE DEBATE
1.8 A commitment to carry out a review of the first year of the scheme was made by the Minister for Communities before the mandatory licensing scheme was introduced. This research report provides a preliminary review of the first year of operation of the mandatory licensing scheme. It will consider the national scheme's early effectiveness and operational efficiency but acknowledges that the political objectives for mandatory licensing - to raise standards and protect tenants - and the expectations for its success belie the complexity of the environment within which the scheme has to operate. The constraints of civic government legislation, the multi-tenure framework of the scheme, the problems of knowing where HMOs are located and who owns them, the dynamics of buying and selling decisions in a free market, the evasion of obligations by some private landlords, the criticisms of inclusion by some non-profit landlords and the vested interests of different 'key players' - all make for a very difficult operational environment. As the review of the discretionary HMO licensing schemes in 1997-98 noted:
" Licensing of HMOs is a complex activity. It triggers a variety of other enforcement regulations, requires contributions from different professional sources, deals with people as well as property, has a political dimension and involves a balance between public costs and private costs. Arguably, it is the most difficult type of licensing activity to organise and process through the civic government licensing procedures…." (Currie, et al, 1998: 37)
1.9 As the Convention of Scottish Local Authorities (COSLA) remarked more recently in respect of the mandatory scheme:
" From the outset, those involved in the development and introduction of the HMO framework were never in doubt that it would be complex and difficult" (COSLA, 2002: 1).
1.10 In such a context, this review cannot deliver definitive conclusions about its longer-term effectiveness or impact of the national framework.
STRUCTURE OF THE REPORT
1.11 The following Chapter sets out the aims and methodology for the research. Chapter 3 locates the mandatory licensing scheme in its historical context by presenting an account of the key milestones in the development of recent HMO policy and legislation. Chapter 4 presents an overview from the different perspectives of the key participants, on the perceived effectiveness of the first year of the scheme what impact it appears to have had on HMO supply and rent levels. Chapter 5 considers how local authorities promoted the introduction of the scheme together with the views of different contributors. Chapter 6 identifies the rate of progress in approving applications in the first year and the administration and joint working arrangements adopted by local authorities. Chapter 7 looks at the issue of data collection about HMOs and methods used by local authorities to monitor their performance in operating the mandatory scheme. Chapter 8 identifies costs and licence fees. Chapter 9 reviews the diverse views about the benchmark standards and particularly the fire safety standards. Chapter 10 reviews the operation of the tenancy management standards. From the perspective of different participants in the research, Chapter 11 considers the issues of extending exemptions, extending the timescale of implementation of the scheme and changing the minimum occupancy threshold level to exclude 3 person HMOs. The final Chapter provides an overview of the first year of scheme and considers what practical improvements and changes could be made to the Licensing order and the Guidance to increase its efficiency and effectiveness.
« Previous | Contents | Next »