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5. Passporting Arrangements
While passporting is now a historic issue there are still a number of issues regarding the practice for landlords and agents holding HMO licenses and accredited landlords and agents.
5.1 Passporting HMO Landlords
A clear finding has been a need for consistency in the process of dealing with HMO landlords, and in particular, in ensuring that landlords keep the authority informed of any additional non- HMO properties within its area.
Landlords do not require to be registered to let property, including HMOs. The do require to have applied for registration. As an HMO license application can take some considerable time to progress then landlord registration should progress in parallel. The registration fee should not be in addition to the HMO license fee.
5.1.1 Passporting Arrangements
Passporting was introduced at the outset of landlord registration to recognise that HMO landlords had already been through a 'fit and proper' test as part of the HMO licensing process. However, as landlords now require to apply for registration before they can let any accommodation within the local authority area, a check should be in place to ensure that the landlord has applied before a new HMO license is considered. Where there is a backlog of such applications this should be addressed as part of the audit of early applications recommended in 4.3.2 above.
Good Practice Recommendation
Procedures should be in place within the authority for HMO licensing teams to check the landlord registers before granting a HMO license. Where HMO landlords are not registered or have not applied this information should be shared with the landlord registration team and the landlord informed that they are required to submit a valid application in order to continue letting and before their HMO application can be processed.
5.1.2 Discount Arrangements and Registration Renewal
The issue of discounts for new HMO licences requires to be revised. At present HMO landlords and their HMO properties are registered with no additional cost to the landlord.
Good Practice Recommendation
A landlord should qualify for a HMO discount if they hold a valid HMO license at the time of their registration renewal. However there should be no discount for non- HMO properties.
If they don't have a HMO license at the time of renewal (as it is a new HMO) then they would require to register, and would receive no principal fee discount. When HMO properties become licensed they would be added to the landlord's registration records at no extra cost.
Good Practice Example
Fife Council: Here the Council stopped all passporting arrangements for HMO landlords from the 1st of May 2006. Now all new HMO landlords must apply for registration before applying for and being granted a HMO license.
5.1.3 Registering Non HMO Properties
There appears to be little consistency among local authorities in their approach to ensuring that the non- HMO properties of HMO landlords are registered. Whilst HMO landlords have been passported they still require to register their all their non- HMO properties..
A common approach adopted has been to passport HMO landlords onto the register before asking them to confirm their non- HMO property details (for which they will have to pay the appropriate fee). As a result there is little incentive for HMO landlords to comply when they are already registered.
Good Practice Recommendation
It is recommended that any passporting and discount arrangements apply only after a HMO landlord has confirmed all non- HMO properties to the authority. HMO landlords still have a legal obligation to ensure their records are regularly kept up-to-date.
Good Practice Examples
City of Edinburgh Council: The team here entered all HMO landlords onto the online system and left the applicant status as 'applications in progress'. This would therefore ensure that those particular landlords would be able to continue entering details of all their properties onto the system and therefore receive maximum discounts. Edinburgh requested these HMO landlords to then go online and check their details are correct and enter any additional properties as a priority. These landlords were then approved in bulk.
East Renfrewshire Council: HMO landlords were put on the register in the start by the team. These landlords were then sent their passwords and activation codes in order add on their additional properties. HMO landlords then pay for the additional properties they have entered onto the system.
5.1.4 Monitoring and Review of HMO Landlords
Very few authorities had any arrangements in place with their licensing sections or HMO teams to ensure they are kept abreast of any concerns or issues regarding HMO landlords whereby their HMO license may be revoked or under review.
Likewise no arrangements appear to be in place to inform HMO licensing teams if a HMO landlord's registration may be under review, revoked or refused.
Good Practice Recommendation
It is recommended that when monitoring and review of HMO landlords is undertaken there is immediate information sharing between licensing and registration sections. For example the registration team should be informed of any complaints or breaches.
It is suggested that HMO licensing teams are involved in contributing to any working group or review list framework and are likewise informed of any information that may affect a landlord's HMO license.
Good Practice Examples
City of Edinburgh Council: The Council uses the Uniform IT system for all other licensing functions in Edinburgh. Therefore, the registration team run a query to identify for renewed HMOs and this provides them with information to update the registration own records.
5.2 Passporting Accredited Landlords
Of the local authorities interviewed, Dundee, Dumfries & Galloway, the City of Edinburgh, Falkirk and Fife each have landlord accreditation schemes in operation.
Each scheme operates to a different set of accreditation criteria developed in partnership with local landlords and as a result each accredits landlords and their properties slightly differently. The guidance makes it clear that where local authorities feel that the fit and proper person test used within the accreditation scheme does not meet the fit and proper criteria used within the legislation for landlord registration, it is not required that accredited landlords be passported.
As a result, Dundee, the City of Edinburgh and Fife did not passport accredited landlords into landlord registration. It was also felt that as landlord registration is a legal requirement, it is important that all landlords meet their legal requirements prior to being accredited. In addition, these authorities wanted Landlord Accreditation to be recognised as an additional badge of meeting higher standards, usually for no additional charge.
Current guidance on accreditation schemes has as a basis that a landlord requires to be registered and comply with legislation. In order for any landlord to be accredited they require to be registered as fit and proper to let. There has been confusion by applicant landlords regarding accreditation status which has led to additional work for authorities providing clarification. For example, landlords stating they are accredited in authorities where no accreditation scheme exists.
In addition, authorities with accreditation schemes have stated that their fitness test set up prior to registration as part of the accreditation scheme does not comply with the fit and proper test in registration legislation. These authorities do not passport accredited landlords.
Dumfries & Galloway were the only authority interviewed that did passport accredited landlords and properties into landlord registration. However, as landlords are not required to submit all their properties for accreditation, they are still required to register and pay for any additional non accredited properties. This has added an additional layer of bureaucracy to the application and enforcement process which has caused confusion and slowed progress .
Good Practice Recommendation
It is recommended for the renewal stage that the opportunity of passporting accredited landlords be removed as this is not being utilised by local authorities with accreditation schemes in operation. Prior to becoming accredited, landlords should be registered.
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