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SUMMARY AND CONCLUSIONS
THE FEE REGULATIONS
QUESTION 1:
Do you agree that a flat discount rate of 60% should be applied to applications made simultaneously online to more than 1 local authority? If not, what should the level of discount be?
Proposal: Applicants applying to more than one local authority simultaneously using the online system currently pay a principal fee of £55 to one 'lead' authority and a discounted principal fee (£13.75) to each subsequent authority. The discount was intended to reflect that the main burden of processing an application to multiple authorities would be undertaken by one lead authority, with other authorities carrying out a reduced level of scrutiny and therefore requiring a reduced fee to compensate them for this activity.
In practice, an application made to multiple local authorities requires the same amount of work in each area, with all authorities undertaking fit and proper activity. This has resulted in an inequitable distribution of fees between authorities. The discount has also been complex to administer.
The consultation therefore proposed that this discount is amended to a flat rate discount of 60% of the principal fee in each local authority where the landlord applies for registration online, simultaneously, in more than one area.
Response:
Agreed 60%
Disagreed 20%
No view 20%
Conclusion:
A number of respondents were concerned about the anomaly created under the new discount, whereby a landlord applying to two local authorities would pay less than a landlord applying to one. In addition, a number of local authorities were concerned about the potential loss of fee income.
In response to the concerns raised within the consultation responses, we have amended the proposal and are suggesting that a flat rate discount of 50% be applied to the principal fee on applications made to more than one local authority. This will apply to new applications made simultaneously online and to renewed applications made online. This will address the anomaly highlighted above and it will also help local authorities concerned about loss of fee income.
As a result of the change, landlords with property in 3 local authorities or less will pay either the same or less than the current rates. This accounts for the vast majority of landlords on the register. Landlords and agents with registrations in more than four local authorities will see an increase in the fee payable when they renew their application. However, the number of landlords and agents affected will be small.
QUESTION 2
Do you agree that the discount for accredited landlords should be removed?
Proposal: In addition to landlord registration, a number of local authorities also run a local landlord accreditation scheme. These schemes promote best practice in private letting through provision of training, advice and guidance. A voluntary national accreditation scheme, Landlord Accreditation Scotland, was also recently launched. The aim of the scheme is to promote best practice in private renting, increase standards and make accreditation available to landlords throughout Scotland.
Landlords who are accredited under a landlord accreditation scheme which operates a fit and proper test currently receive a 100% discount on landlord registration. There were only two accreditation schemes in Scotland where this discount was applicable as they included a fit and proper test (Dumfries and Galloway and South Ayrshire). The Dumfries and Galloway scheme is no longer in operation. In addition, Landlord Accreditation Scotland does not operate a fit and proper test.
Our view is that landlord registration represents the minimum legal requirement that all private landlords should meet. Accreditation builds on this minimum standard. The consultation proposed that the current discount for accredited landlords should be removed from landlord registration.
Response:
Agreed 47%
Disagreed 35%
No view 18%
Conclusion:
We intend to adopt this proposal. Those respondents who agreed with the proposal cited the fit and proper person test as the basis for their decision.
QUESTION 3
Do you agree that the charities discount is increased from 80% to 100%?
Proposal: Charities applying for registration receive a discount. This is currently 80% of the total amount payable (principal fee plus property fees). In practice, the application of the 80% discount has placed an administrative burden on local authorities when processing payment which is disproportionate to the fees being sought.
The consultation therefore proposed to increase the charity discount to 100%.
Response:
Agreed 72%
Disagreed 18%
No view 10%
Conclusion:
We intend to adopt this proposal. The majority of respondents agreed with the proposal to increase the charities discount. The late application fee of 200% of the principal fee (£110) will still apply and charities could still be liable to pay this if they fail to register.
QUESTION 4
Do you agree that the on line discount should be increased from 10% to 20%?
Proposal: Applicants using the online system currently receive a 10% discount on the fee payable. This discount is intended to reflect the reduced administrative burden on local authorities when applications are made online.
The consultation proposed to increase the online discount from 10% to 20% in order to encourage more applications to be made online.
Response:
Agreed 72%
Disagreed 16%
No view 12%
Conclusion:
A number of local authorities raised concerns that the proposal would have a significant impact on fee income, and that these losses would not be balanced by administrative savings. This is because applicants applying online can often require support to complete their applications. On reflection it is not clear from the responses that more people would be encouraged to apply on line to the extent that this would reduce local authority input.
In response to the concerns raised by local authorities we do not intend to adopt this proposal. The online discount will therefore remain at 10%.
QUESTION 5
Do you agree with the proposal to remove the discount for single property agents?
Proposal: When applying for registration a landlord must declare any agent who acts for them in relation to the property. An agent who manages more than one property on behalf of a landlord(s) will pay a principal fee of £55. An agent operating in relation to only one property currently receives a 50% discount. This discount was intended to encourage single property agents to register.
In practice this discount has caused confusion and an administrative burden on local authorities. The consultation therefore proposed to remove the discount.
Response:
Agreed 50%
Disagreed 34%
No view 16%
Conclusion:
We intend to adopt this proposal. This will ease the administrative burden on local authorities amending applications, chasing payments and contacting the individuals concerned for verification.
QUESTION 6
Do you support the proposal to extend the family discount to all joint owners? Do you foresee any unintended consequences of extending this discount?
Proposal: Joint owners who are family members currently receive a 100% discount on the fee payable. A lead joint owner is nominated and pays the full fee, with family members registering their details but not paying a fee. This practice ensures that each registered person is assessed as fit and proper to let property, but minimises the financial burden for joint owners of property who are family members.
The consultation proposed that the discount should be extended to all joint owners in order to reduce the administrative complexity of current arrangements and improve the efficiency of the scheme. All owners, joint or otherwise, would still need to be assessed as fit and proper.
Response:
Agreed 69%
Disagreed 14%
No view 17%
Conclusion:
We intend to adopt this proposal. The majority of local authorities and landlords/agents thought that the discount should be extended to all joint owners and see no unintended consequences of this. They thought that this would simplify matters and although there will be a reduction in fees for local authorities, this should go hand in hand with a reduction in administration costs.
QUESTION 7
Do you agree that members of an unincorporated trust, other than the "lead member" should receive a 100% discount on the application fee for landlord registration?
Proposal: In its original guidance to local authorities on landlord registration, and in information to applicants online, the Scottish Government advised that a trust should be treated as a single body, equivalent to a company. Having reviewed this issue, we now consider that this advice does not accurately reflect the current legal position as regards unincorporated trusts. Current practice is therefore for individual members of an unincorporated trust to register as joint owners, with each being liable for a full fee.
The consultation proposed that the fee regulations be amended to correct this situation, so although individual members of an unincorporated trust would still be liable to register; only a 'lead member' would be liable to pay a fee.
Response:
Agreed 67%
Disagreed 10%
No view 23%
Conclusion:
We intend to adopt this proposal. Members of an unincorporated trust will be eligible for the extended joint owner discount proposed and adopted at question 6.
THE EXEMPTION REGULATIONS
QUESTION 8
Do you agree that houses held by an insolvency practitioner should be exempt from registration for 6 months?
Proposal: The Scottish Government considers that the position of private insolvency practitioners who take ownership of rented houses is equivalent to that of executors or creditors who currently benefit from a 6 month exemption from registration.
The consultation therefore proposed that insolvency practitioners should benefit from an equivalent short term exemption of 6 months.
Response:
Agreed 69%
Disagreed 13%
No view 18%
Conclusion:
We intend to adopt this proposal.
QUESTION 9
Do you agree that the exemption for resident landlords should be reconsidered by Ministers? Do you have any evidence to underpin your view?
Proposal: Resident landlords are currently exempt from landlord registration. Lettings by resident landlords make an important contribution to housing supply for some groups such as students and temporary workers. It is generally a secondary activity for landlords and often a casual one, so that any disincentive is more likely to lead the landlord to withdraw from the market.
During the passage of the Antisocial Behaviour Bill, Ministers agreed to keep the position on resident landlords under review. The consultation therefore asked whether or not Ministers should reconsider the exemption for resident landlords and asked for evidence to underpin this view.
Response:
Agreed 46%
Disagreed 33%
No view 21%
Conclusion:
Although the majority of respondents felt that Ministers should revisit the position of resident landlords, the responses did not contain any evidence as to the extent of any problems in this sector. Therefore we do not intend to revisit the exemption for resident landlords at this time; however, we are committed to a full evaluation of landlord registration in 2010 and will look again at this issue as part of the evaluation.
THE ADVICE AND ASSISTANCE REGULATIONS
QUESTION 10
Do you support the proposal to extend the current advice and assistance regulations to require local authorities to provide advice to tenants where they discover their landlord is not registered but they believe they should be?
Proposal: Local authorities have a duty to provide advice and assistance in a number of circumstances in relation to landlord registration, including advice to landlords on what constitutes good letting practice and advice to applicants if the local authority propose to refuse registration or de-register a landlord/agent.
In addition, local authorities have a duty to provide tenants with advice and assistance in particular situations, where the local authority:
- Refuses to register a landlord
- Removes a landlord from the register
- Applies a rent penalty notice
The consultation proposed to amend the current advice and assistance legislation to require local authorities to provide advice to tenants where they discover their landlord is not registered but they believe they should be.
Response:
Agreed 74%
Disagreed 11%
No view 15%
Conclusion:
Many local authority respondents said they already provide advice and assistance to tenants on a broad range of subjects and see this as standard practice and a valuable service. The proposal to extend the advice and assistance duties of local authorities will therefore be adopted but will be a general duty so that where a tenant or prospective tenant contacts the local authority enquiring about letting practice or landlord registration, the local authority should provide general advice on the law in relation to letting houses and landlord registration processes.
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