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CHAPTER 3: RESPONSES TO PROPOSALS UNDER THE EXEMPTION REGULATIONS.

The general approach of landlord registration is to provide a register of all landlords, except social landlords and the properties they let. A person requires to be registered if he or she is the owner of a residential property which is subject to a lease or occupancy agreement and is not specifically excluded.

Exemptions apply to properties rather than to people. If all of a landlord's properties in a particular local authority area are covered by one or more of the exemptions, he or she does not need to register with that authority. If only some of his or her properties are exempt, the other properties must still be registered. A full list of exempt properties is shown at Appendix 4.

QUESTION 8

Do you agree that houses held by an insolvency practitioner should be exempt from registration for 6 months?

There are a range of circumstances in which insolvency practitioners ( IP's) may take ownership of property, normally with the intention of disposing of it in order to realise the value to pay creditors of the insolvent person or company. In some cases such property may include privately rented housing with sitting tenants, meaning that the IP would become subject to the requirements of landlord registration.

The Scottish Government considers that the position of private IPs who take ownership of rented houses is equivalent to that of executors or creditors, and we therefore propose that IPs should benefit from an equivalent short term exemption.

The consultation proposed a six month exemption period for registration, bringing IP's in line with executors and creditors.

A total of 141 responses were received, of which 97 (69%) agreed with the proposal, 18 (13%) disagreed and 26 (18%) did not have a view.

64% of landlords and agents agreed with the proposal, 17% disagreed while 19% had no view.

96% of local authority responses agreed with the proposal.

100% of landlord organisations and 57% of housing organisations agreed with the proposal while 43% of housing organisations did not have a view.

The majority of local authorities agreed to this proposal stating that the 6 month timescale is in line with executors and creditors. It would also allay any fears of a sitting tenant and allow local authorities to deliver information and advice.

South Ayrshire Council said:
"Insolvency practitioners perform a similar role to executors or creditors and should therefore receive the same short term exemption". (LR 128)

There was also the suggestion that insolvency practitioners should notify councils and tenants within 7 days of their appointment in order that the professional status of the IP can be checked.

Renfrewshire Council stated:
"Renfrewshire Council believes that insolvency practitioners should be required to notify the local authority and the tenant within, say, seven days of their appointment. If such a requirement is not in place then a situation could arise where neither the tenant nor the authority are aware of who is responsible for any emergency repairs etc. On receipt of notification of appointment the authority could amend the landlord's contact details to show the landlord per the insolvency practitioners". (LR93)

However, a minority of landlords disagreed with the proposal, one respondent stating:

"A landlord is a landlord irrespective of their legal entity". (LR54)

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?

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 to the landlord withdrawing from the market. This type of letting is also often intermittent and would be very difficult to identify, since the property would show up as owner-occupied for most purposes.

The consultation asked respondents if Ministers should reconsider the exemption for resident landlords and asked for evidence to underpin responses.

A total of 141 responses were received, of which 65 (46%) agreed with the proposal, 47 (33%) disagreed and 29 (21%) did not have a view.

44% of landlords and agents agreed with the proposal, 33% disagreed while 23% had no view.

67% of local authority responses agreed with the proposal, 25% disagreed and 8% had no view.

100% of landlord organisations and 57% of housing organisations disagreed with the proposal.

Some of the respondents stated that a landlord's status and responsibility applies whether resident or not and that it could be potentially more dangerous if they are not fit and proper to let property. Some felt that tenants in this type of tenancy generally have fewer rights (including security of tenure) than other private rented tenants. It was also stated that resident landlords should have to register, but perhaps receive a discount.

East Ayrshire Council said:
"East Ayrshire has received many enquiries and concerns regarding resident landlords and their exemption from registration. Resident landlords are still required to ensure they comply with most other legislation and registration is a way of ensuring that they do. It would also ensure that they are kept informed by the local authority of changes in legislation. General information, advice and assistance could be accessed by the landlord which would increase good practice. It could be argued that tenants in ''resident'' accommodation could be at greater risk in relation to their rights and issues around privacy and security of tenure". (LR129)

East Lothian Council stated:
"East Lothian Council does agree that the exemption for resident landlords should be reconsidered by Ministers. Whilst East Lothian Council has no firm evidence to support this view, we are aware of anecdotal evidence, which would support the removal of the exemption. The local Shelter team here in East Lothian have dealt with a number of cases where tenants with Resident Landlords have been experiencing problems. Many tenants with Resident Landlords have limited or no security of tenure and as a result are often afraid to speak out or seek help with problems which they are experiencing". (LR125)

However several respondents stated that there is currently no substantial evidence of issues with resident landlords and that any evidence is anecdotal. They felt that any exemption should be kept under review until such time as reliable evidence is available to show that there is a need for registration.

Other respondents stated that registration for resident landlords is not worthwhile and will act as a disincentive for those currently renting out rooms. Some local authorities thought that this area would be difficult to administer and could create more work with little reward stating that administration costs could be high. They believe that landlords could stop offering this type of accommodation if asked to register.

South Ayrshire Council stated:
"The exemption should remain. Tenants living with resident landlords already have very limited security of tenure so it is difficult to envisage where the benefit of registration would be realised. Resident landlords avoiding registration would be extremely difficult to detect and enforce using current methods". (LR128)

CIH Scotland commented:
" CIH Scotland firmly believes that there is little evidence to support the move to include resident landlords in landlord registration. A resident landlord lives in the same property and experiences the same problems as the tenant and so is more likely to react quickly to problems of antisocial behaviour and be generally more responsive than a landlord who is not resident. In the main, tenants with resident landlords have limited security of tenure and it is possible that the burden and cost of registration could encourage landlords to leave the sector. However, if following a full assessment of the resident landlord sector there is a need for regulation via landlord registration, this CIH position would be reviewed.

Shelter said:
"Shelter has considerable doubts as to the wisdom of widening the scope of landlord registration to include resident landlords at this time. This is because if the existing system is not yet working effectively, extending the scheme to cover new categories of landlords would just compound the problem. There is still no reliable data on the number of landlords who would be affected and no review has been conducted on the impact it would have. In addition, we argue that the logistical and administrative burden involved in registering resident landlords would take resources away from the vital task of enforcing standards through the fit and proper person test." (LR105)

NUS Scotland stated:
" NUS Scotland believes that all private landlords, resident or otherwise, should be held up to a minimum set of standards. This will ensure that any student or individual who is renting in the private rented sector can be assured of their safety and security. At present there are a limited number of students who own their own property and act as resident landlords in order to help them to cover their mortgages while they are studying. It is increasingly likely that today's student will be a homeowner. In order to prevent students who are resident landlords being burdened with additional costs should resident landlord become legally required to register, the Scottish Government could consider a introducing a discount this group of landlords". (LR97)

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