Gaskin v. LB Richmond and the implications for Councils

I don’t expect to have any supporters for what I am about to write [why not Ben? You are not alone in wanting proper enforcement action against the crooks. Ed] but I am setting out the situation in the sake of clarity anyway.

Yesterday David Smith reported on Landlord Law Blog on the recent case of R (Gaskin) v. LB Richmond Upon Thames.

No point in me re-telling the tale here, just read David’s excellently written and clear explanation.

Jubilation?

I acknowledge that among landlords, property licensing must be the single most unpopular law to be introduced in renting world since the Rent Act 1977.  And the Gaskin decision, whilst no doubt the source of much champagne cork popping and mirth for some in that same community is a serious problem for local authorities and as a consequence, communities.

David himself, writing in his capacity as Policy Director for the RLA also cautions:-

“This is not an immediate reason for landlords to rejoice.”

Before going on to inform us, that this matter is far from over.

Schemes may grind to a halt

Councils will indeed seek appeals against the decision. They will have to or licensing schemes, especially in large London boroughs or Unitary authorities in places like Manchester and Birmingham could well grind to a halt.

There are approximately 55 Selective Licensing schemes in the UK. Many of these may well be affected by the decision. Some like Brighton and Bexley, all set to become operational may well have to shelve their schemes. We shall have to see.

Hunting out the problem properties

The biggest problem facing all local authority enforcement teams is not in taking action but in simply finding dangerous and overcrowded slums, when according to Dr Stephen Battersby’s March 2018 report on Environmental health officers working the PRS, there are on average just 2.5 EHOs for every 10,000 PRS properties.

Have a look at the picture to the side. I took that last weekend whilst drawing cash out of a machine in a borough I don’t work in.

You can clearly see the stud walling partition running down the middle of the glass. Evidence of a sub-divided room where two occupants share two halves of the same window.

Something we see all the time and we need clues like this to identify properties where people are being bullied, ripped off, threatened, trafficked and exploited by criminals.

It isn’t just experienced old hands like me who are never really off duty, spotting these random signs on my way to the Emirates Stadium on a Sunday afternoon but we use council tax records, business rates, inter-borough intelligence sources AND Licensing data to find the criminals.

Not NLA members, not Judy and Keith with their single pension/investment buy to let property, not Landlord Law Blog readers but people working overtime to exploit loopholes and resourcing problems among the enforcement community.

We need a better system

Would enforcement teams benefit from a better system of tracking down properties in breach of standards? I think every enforcement officer I know would say yes but there isn’t wonderful magic bullet at the moment.

So tracing rogue properties is like putting pieces of a jigsaw together, using over-flowing bins, neighbour complaints, spotting signs like the stud walling in my photo, bits of data that get thrown up by housing benefit fraud investigations, planning applications etc.

I’ll tell you what would help with one element of tracing rogue properties, if the VOA, a government department, would stop automatically banding self-contained properties for council tax without first checking with the local authority that planning permission had been given to convert or build.

The problem with tracing is so widespread that some councils have employed data analysts to use every trick in the book to find properties and until there is a single data software that is used by every EHO, TRO, planning enforcement, fraud officer in every authority in the country finding out where people are being exploited is going to rely on the jigsaw approach and licensing is part of that jigsaw.

As David Cameron was always so fond of saying “Let me absolutely clear about this”, local authorities did not create property licensing. Government did.

Putting Local Authorities themselves in breach of the law

If local authorities don’t deliver government policy then they are themselves in breach of the law.

Come the 1st October 2018 the law is requiring local authorities to expand their licensing operations at the same time that the courts have made serious decision on how such work is funded and as David also says at the end of his article:-

“For local authorities grappling with the upcoming change in the definition of mandatory HMO licensing and the increased cost of licensing many more properties this decision could not have come at a worse time.”

As with the quite astonishing gas safety certificate case of Caridon Properties Ltd v. Shooltz it is likely that government themselves will re-group and re-draft to avert a crisis, where on the one hand they are requiring councils to implement their laws while the Gaskin decision raises serious issues about how they can fund the work.

In Caridon the pendulum swings entirely against the landlord, in Gaskin it’s against the councils. Things like this come up from time to time, Like Spencer v. Taylor on s21 as some readers may recall, or the recent madness with the How To Rent booklet v5.

In the alternative, the government doesn’t re-draft and leaves councils in the position of having to draw extra money from the general council tax fund to keep the service running and prevent them from breaking their legal obligations to central government.

Councils in financial crisis

Northampton council, a Conservative borough, affected by austerity cuts and trying to avoid council tax rises were declared technically insolvent just a few months ago and their predicament will be to the forefront of most local authorities minds when considering their response to Gaskin

There are other funding streams which might be drawn on, the oddly named “Controlling Migration Fund” (soon to be rebranded for obvious reasons I’m told) is the source of much money used for a variety of purposes and local authorities are old hands at bidding for government cash creatively.

Maybe gaps can be plugged that way but you can’t ask for money on a Friday and get it on Monday. These things take a long, long time, while enforcement teams meet with legal teams to discuss the ramifications and put on hold countless prosecutions while they decide if the basis for enforcement will withstand a Gaskin challenge.

The loss of such cases typically costing tens of thousands of pounds.

And in the meantime?

During that time that criminal, using the PRS in the standard Rent to Rent debacle that is almost the endemic business model at the bottom end of renting, will cram even more people into even less space without fire precautions and will increase their income enough to buy their third Merc.

NB The picture of Ben was taken at the Landlord Law Conference, where he was a speaker.