Reading Tessa’s newsround from last week in my enforced absence I was surprised to read of the problem with Welsh landlords not signing up to the Rent Smart Wales licensing scheme.
What’s the problem?
For those of you living East of the Marches last November, the Welsh government introduced a scheme to licence all property managing landlords and letting agents in Wales that has to be complied with by 23rd November 2016, landlords have to undertake a short and basic training course aimed at helping them gain knowledge to run their business successfully.
The cost of the training course is £100 for the day and the cost of the licence is £33.50 and is valid for 5 years and that is per landlord, not per property and no checks are carried out on the properties in question.
Even in Wales where rents are cheaper than London, that represents probably only a week’s rent on a property for five year’s licensing.
The penalties for not doing so however, mean that an unlicensed landlord cannot serve a section 21 notice and leave themselves open to a £150 (or £250 fine depending on the offence) statutory penalty notice and if prosecuted, a fine of £1,000 (or unlimited depending on the offence).
There are also a range of other penalties for failure to comply.
So why is it, as Tessa pointed out, that only a fifth of landlords have registered with rent Smart Wales since November 2015 with only a few weeks to go?
Discussing with Welsh Enforcement Officers
I was training a bunch of enforcement officers in Wales last week and this subject came up for discussion.
The central administration centre for the scheme is Cardiff but the policing of it falls to the individual council areas.
Faced with such a massive failure or refusal to register presents them with a difficult challenge.
First of all are the resources to police a mass refusal of this kind. Councils across the country have trimmed back teams and deleted many posts leaving local authorities struggling in their day to day activities, let alone proactively seek out those failing to register for the scheme.
Then there is the political complexity of basically going to war against 80% of Welsh landlords en masse, which is the problem that this situation presents.
- Have 80% of landlords simply forgotten that they have a few weeks left to comply?
- Are 80% of Welsh landlords still ignorant of the requirement? This wouldn’t surprise me at all as 9 years in so many landlords stull don’t know about deposit protection legislation.
- Or, is it as I and the enforcement officers I was training believe, that at this late stage Welsh landlords are staging a silent protest, a work to rule, a refusal to comply amounting to a strike that the policing authorities don’t have the resources to do anything about?
Spoiling for a fight?
Nobody in the Welsh government seems to be posing this question and the Welsh landlord’s associations aren’t exactly throwing out press releases but a bit of a gang fight is brewing.
Are Welsh landlords effectively saying “Go on then. I dare you……I double dare you”? and if so what is going to be the response of the local authorities?
Nobody in the front line business is any doubt that nothing will happen. There aren’t the resources or the political will within local authorities to go to war on that level.
The best that will happen is that Solicitors, Shelter and homelessness prevention teams will concentrate on simply defeating possession claims on the basis of invalid section 21s but penalties and enforcement will be hard to find.
The main impetus for introducing the scheme is to help local authority enforcement teams isolate rogue landlords, giving them the powers to take their licence away and stop them earning a living from renting.
Admittedly there will be flaws in the system in practice but the aim is clear and yet Welsh landlords seem to be against ridding their business of the rogues who they all publicly condemn but privately have no interest on doing anything to eradicate if they have to pay for it, so you have to doubt whether or not they really care if the policing authorities take out the bad apples if it is going to cost them a day of their time and £133.50.
Ineffectual sabre rattling?
The result of this failure to register will mean that the licensing scheme will prove to be no more than a bit of government sabre rattling.
The landlord groups aren’t voicing a coordinated protest and the Welsh Government aren’t commenting on the astonishing failure of 80% of landlord to register just weeks away from the cut off date but the people who will be expected to move into action on the 24th November aren’t in any doubts that, failing a last-minute rush over the next 7 weeks the dissenting landlords have won.
NB Welsh Landlords can register here.
Note – we have been contacted by Rent Smart Wales who have asked us to add the following note:
The cost of a licence isn’t £33.50 – this is the cost of online registration. The landlord licence fee is currently £144.00 for applications completed online and £186 for paper applications.
The agent licence fee is determined by the number of properties in Wales managed by that agent and there is a discount if they are a member of a relevant professional body or a social landlord.
With regards to policing falling to individual authorities, this is actually a partnership arrangement between RSW and the 22 local authorities.
Also, local authorities will not have the ability to take licences away. This responsibility will remain with Rent Smart Wales.