Hansard

I hope that the amendments would provide a route to ensure that private landlords are fit and proper and take responsibility for the important role that they play. I am sure that the committee will forgive me for lodging such a large group of amendments, which are intended to give effect to one of the recommendations in the committee's stage 1 report. I remind members that the recommendation was that "a mandatory licensing scheme should be introduced for all private landlords and that each property which a landlord holds for rent should be registered."Rather than lodge amendments that concerned only the detail of part 8 of the bill, I felt that it would be more helpful to propose a complete package to replace the existing part 8, with the exception of existing section 74, which makes a stand-alone provision. First, I will explain the overall effect of the amendments and then I will explain the purpose of each of the amendments in turn. Part 8 of the bill as published allows local authorities to designate areas in which private landlords should be obliged to register. During its stage 1 evidence sessions, the committee heard from the minister that she wanted to act urgently to deal with those few landlords whose failures encouraged or exacerbated antisocial behaviour. She recognised that there would be an opportunity to strengthen regulation when the housing bill, which we hope to see in this session of Parliament, is enacted. However, she felt that there was an urgent need to act on the landlord's role in antisocial behaviour. Therefore, she wanted to limit registration to areas in which there is persistent antisocial behaviour in private rented housing.All members of the committee were happy with the principle that stronger regulation of private landlords would bring benefits to tenants, the community and many landlords by driving out the poor landlord and by improving the quality and image of the sector. The evidence that we received from many quarters, including from representatives of landlord and tenant interests, confirmed that. However, the committee was in no way convinced that the discretionary arrangements in the bill were the best way of proceeding. We felt that the discretionary approach would leave too much to chance if we wanted to get a firm hold on problems in the private rented sector. The Local Government and Transport Committee also commented that there might be merit in replacing that discretion with a requirement.I am sure that councils would take a variety of views on how the discretion should be used, which would lead to a patchy situation that could be exploited by landlords who were determined to get round the controls. We must make no mistake: there are landlords who make it their business to exploit their tenants and the misfortunes of home owners in low-demand areas who have to sell up for a pittance. In fact, they exploit any loophole that they can.Those landlords might be few in number in Scotland, and I in no way want to stigmatise the many good landlords who provide an essential part of the housing market. However, we urgently need to confront the exploitative landlords, so that their corrosive effect on some of our most fragile communities is halted. Members have given examples of how communities are affected by the actions of irresponsible landlords, so that is already on record.We were not happy with the idea of discretionary regulation. We felt that there should be some form of national regulation in the bill, but we heard from a number of organisations that it would be wrong to rush through a full-blown scheme that covered everything to do with property conditions and tenancy management, and we agreed that to do so at this stage would be wrong. I support that view, as I do not think that such a move would allow for the level of consultation and consideration that we would want to engage in when talking about housing conditions and the many other issues that will arise in the bill on private housing. However, we felt that leaving out a provision to deal with private landlords would mean that there were areas in which the Antisocial Behaviour etc (Scotland) Bill would not be so effective. I have tried to balance the issues and to prepare an alternative part 8 that would achieve two key objectives: assurance for the public, tenants and communities that private landlords are fit and proper persons; and a list or register of all properties in the private rented sector, provided so that people who need access to that list are able to gain it. My amendments aim to use a light touch to achieve those objectives and I have tried, with experience from other legislation, to ensure that there is minimum bureaucracy in the system. If we achieve the objectives, we will give local authorities the means to act against exploitative landlords and the information that will help them to use the targeted powers available under part 7. Local authorities will also have the information that is an essential foundation on which to build the good working relationships that they should have with the private rented sector.I will not go through every detail of all the amendments, but I would like to highlight the aspects that differ from the provisions in part 8 of the bill as published and that are significant for the operation of the registration scheme. Amendment 351 sets out the scheme by making it clear that local authorities would carry out the registration function and that there would be a separate register for each local authority. Amendment 357, which is next in the marshalled list of amendments and next in the logical sequence of the package that I propose, deals with how a person would apply to be registered. As members will see, amendment 357 refers to a "relevant person" as defined in subsection (7). The intention is to require existing landlords to register, and to allow a person who intends to buy and let a property to obtain his registration before he goes to the extent of making a substantial capital investment. I think that that is a proper way to proceed. Any prudent person would want to ensure that he was registered before investing in property. Amendment 357 would also allow for an agent to apply to be registered, even though he might not own any property for letting. A registered agent would be able to assure clients that he is registered as acceptable by the local authority and the authority would not need to re-examine the agent's suitability each time he acts for a new client. Amendment 357 also provides for fees to be chargeable. The processing that would be required for the arrangements that I shall describe would be limited compared with the regime of detailed property inspection and other considerations that are part of the licensing scheme for houses in multiple occupation, from which we have all learned a lot. To avoid inconsistency and unfairness, I propose that, although fees should be set by the local authority, ministers should have powers to intervene by regulation. What I have in mind is that ministers may set upper limits for fees or may identify costs that can be taken into account in calculating those fees. I would also encourage ministers to use those powers to take account of the fees that HMO licence holders have already paid and to consider how to avoid duplication if a landlord is already accredited under a robust accreditation scheme. I draw members' attention to the fact that amendment 357 would make it an offence knowingly to provide false or incomplete information. The benefits of registration would otherwise be undermined. I turn to Donald Gorrie's amendment 357A, which seeks to amend my amendment 357. I encourage ministers to take account of the fees that HMO licence holders have already paid and to consider how to avoid duplication. I ask the minister to reassure us on that point so that Donald Gorrie can see that it is not intended that there will be any duplication. I hope that Donald Gorrie will consider the points that I am making and the minister's response.I turn to Donald Gorrie's amendment 357B. Amendment 357 would cast the net widely to give all tenants of private landlords the assurance and protection that the landlord is a fit and proper person. It is difficult to know exactly the number of different types of landlords and tenants. As far as I can establish, there are no data that identify resident landlords in the census, the Scottish household survey or the Scottish house condition survey, so it is difficult to say how many people are in that category.I appreciate Donald Gorrie's point and acknowledge that the very fact of registration, however light the touch, could have implications for the supply of accommodation with resident landlords. The task of administering registration in that more informal part of the market could be difficult for local authorities and we must strike a balance. I suggest to the minister that it would be helpful if we could have further discussions and if more work could be done on the issue. The Executive could take time to speak to the Convention of Scottish Local Authorities and private landlords and could come back at stage 3 to see whether we could take on board Donald Gorrie's suggestions. We have just discussed Stewart Stevenson's amendment 350A to part 7, which is similar to amendment 357C. Although the committee agreed to amendment 350A, what amendment 357C proposes would be difficult to implement. It would require all landlords letting holiday accommodation to register. Previously, we discussed what would happen with long lets. If a property were let over four, five or six months, the tenant would have some entitlement to a secure lease. We have to consider such issues. Holiday accommodation would be better dealt with by the tourism industry in some way. There should be some sort of quality assurance for people who are renting flats and holiday accommodation. We would be casting the net too widely if we included such accommodation in the bill. It is for the committee to decide, but I think that we are encroaching on an area that would be better handled by the tourism industry and the relevant Government departments.Amendment 358 would require the local authority to consider whether the applicant—and, if there is one, the applicant's agent—is a fit and proper person. If the answer is yes, the local authority would have to register the applicant for three years. The fit-and-proper-person test, which is outlined in amendment 359, is at the heart of the scheme. The decision would have to be a matter of judgment for the local authority, but amendment 359 would help it by setting out the main types of information that it should take into account. Subsection 3(b) of the proposed new section states that that would include information about the way in which the applicant has managed or failed to manage antisocial behaviour in the past. The judgment would rest with the authority. It might take other types of information into account and it might reach the decision that although it has some information of the types listed, that is no longer relevant to the landlord's current and future behaviour and so the landlord should be registered.The decision might be difficult as it would involve balancing different types of information and drawing conclusions about behaviour. However, as local authorities frequently have to make such judgments, they are best placed to do so in this respect. After all, their judgments would be backed up by democratic accountability and the support of professional officers in the field.Amendment 360 seeks to ensure that an applicant is informed of the decision. Although I have some sympathy with amendment 360A, in the name of Donald Gorrie, its wording gives the impression that local authorities would have to write to all their tenants and give appropriate advice and assistance. Although it would be very serious if someone's application for registration were refused, it would not initially affect the contractual relationship between the landlord and the tenant and the tenant would have the right to see out the remainder of their lease. It is important to advise tenants about what has happened and I again ask the minister to consider whether the issue could be addressed through guidance or regulations. I do not think that the provision needs to be made explicit in the bill itself, but in any case local authorities should regard it as good practice to notify tenants that the landlord's application for registration has been refused. I hope that the minister will agree to discuss the matter further at stage 3.I am aware of the time, but these amendments form a major piece of work. I will try to be as quick as I can.Amendment 361 seeks to require that the registered person notifies any changes. That is particularly important, given that property holdings and agency arrangements can change frequently. In fact, a person could register before he has bought any property. As failure to notify changes could rapidly undermine the register and would be an obvious way for unscrupulous landlords to avoid controls, I feel that it should be made a criminal offence. I have no doubt that local authorities would place an emphasis on ensuring that errors are corrected and would not seek to report cases to the procurator fiscal in which failures were inadvertent.Amendment 362 is necessary as it seeks to ensure that a landlord can appoint or change an agent while the period of registration is running and that, when that happens, the local authority will satisfy itself that the new agent is a "fit and proper person".The amendments so far have centred on setting up the register of "fit and proper" people and their properties. We must also allow for the possibility that a registered landlord or agent will do something that means that he is not longer a "fit and proper person". Amendment 363 seeks to require the local authority to remove a person from the register if it becomes clear that the person is no longer "fit and proper" under the test that I have described. That would apply to a registered person no matter whether he is a landlord, a prospective landlord or an agent.Amendment 363 also states that where a landlord uses an agent and the agent is no longer a "fit and proper person"—no matter whether the agent is registered in his own right—the landlord will be removed from the register unless he stops using that agent. Amendment 364 seeks to ensure that anyone removed from the register is told about it. I have no doubt that the local authority would also advise the person of the consequences should they continue to let property but I would be glad if the minister agreed that the point should be made in guidance to local authorities.In cases in which a person's application for registration is refused or in which a local authority decides that the person is no longer "fit and proper" and removes them from the register, there could be important consequences for the individual. As a result, amendment 352 seeks to make provision for appeal to the sheriff. I have also allowed for the sheriff's decision to be appealed to the sheriff principal within 21 days. If a person is not registered, there will be further consequences only if he then decides to let or to continue letting a property. Amendment 353 seeks to make that a criminal offence with a potential level 5 fine, which currently stands at a maximum of £5,000.That is in line with the level of fine in the bill as introduced, and with the maximum fine for letting an HMO without a licence. In individual cases, the amount of the fine would be entirely up to the sheriff—up to the maximum. I hope that, through guidance and the training that would be provided to them, we can let sheriffs know just how important an issue we feel this to be. It is vital to have the penalty specified in legislation, both as a deterrent and as a strong signal that letting by a person who is not fit and proper is unacceptable. The prime objective of the local authority should be to ensure that landlords register. If they fail to do so, either in ignorance or simply because of inertia, they should be encouraged to register. If such efforts are unsuccessful, the local authority should carefully consider whether reporting a case for prosecution is the best route, or whether the civil sanction, which I shall describe shortly, is more acceptable. I encourage local authorities and COSLA to agree suitable working arrangements with the Crown Office and Procurator Fiscal Service. While the criminal sanctions send important signals—