Enforcement disciplines
In the weird world of strange property conversions and dubious outbuildings where I spend much of my time nosing around you see some downright odd stuff. Most of it illegal and unauthorised.
When discovered, several enforcement disciplines come into play:
- Environmental health may be concerned with overcrowding, management regulations, health and safety.
- Planning enforcement looks to the council’s own policies and government legislation regarding what is and isn’t allowed to be built or converted.
- Property licensing teams are looking at whether or not the property falls within national and local schemes.
- Building control are involved in signing off the quality and safety of the work within statutory guidelines and the Tenancy Relations Officers have to deal with the fallout when the illegal evictions start as a result of the council’s involvement.
Safer Renting plays their part
Often we all go out together to save time. If Safer Renting (the company I work for now) can get in before the backlash starts we stand a better chance of sustaining the tenancies and protecting the occupants, even if only by advising them of their rights before things go South.
When confronted about the unauthorised nature of the works that have been done, the rogue landlords and developers often take great umbrage, pointing out that the property in question has been banded for council tax by the Valuation Office Agency (VOA) and that it does, as a result, have the royal seal of approval.
It does nothing of the sort. The VOA has no duties or powers that they can use to rubber stamp conversions and buildings in contravention of the various statutes.
In short, the fact that a conversion or outbuilding has been banded means Jack but it results in more appeals, more emails, more complaints, more letters and more delays, all at tax payer’s expense.
Valuation Office Agency
I know why the VOA band properties but I freely admit I don’t know how they actually go about it. So I did a bit of digging and found information on Gov.uk about it. The website says the following:-
“When a new property has been built, or an existing property is converted to domestic use (for example, a warehouse conversion), the property will need to have a Council Tax band.”
So far, so good and I kind of guessed that but then it goes on to say:-
“Usually, the VOA can get all the information they need from outside, so they won’t need to disturb you. The inspector will often take photographs to save time. Generally, only 1 or 2 external pictures are necessary – much like an estate agent would use.”
Woah, woah, lets back up there for a minute.
- You mean they don’t need to do anything other than look at it?
- No checks are made?
Much as I suspected then.
Reading further in, I see guidance on how family homes can be converted into tiny micro-flats, in breach of planning regulations and yet still get banded:-
“Separately let rooms in a HMO may have been adapted, for example, so that they have their own kitchenette or separate shower/bath and WC. They will be given their own band even though may share some facilities”.
This process explained further:-
“The VOA is required by law to apply a separate Council Tax band to every building, or part of a building, which has been constructed or adapted for use as separate living accommodation”.
A statement which itself derives from guidance in the Practice notes through which we are informed:-
“If within a property there is any unit of occupation which would have formed a hereditament in its own right for the purposes of the 1967 General Rate Act, then it is a separate dwelling based on occupation, irrespective of whether or not it is self-contained.”
This is where it deviates
Now I’m afraid folks all of this can put the work of the VOA at odds with planning enforcement, who in all London boroughs I know and many outside London, have prohibitions on converting family homes into small units, not to mention creating issues for both environmental health and licensing.
And let’s not forget the housing benefit provisions, where shared facilities will mean a reduction in HB rates. Banding for council tax where there are shared facilities will create a very grey area that can be exploited, which in many cases is exactly what happens.
So we have here is a situation where the guardians of one form of government regulation are at odds with the enforcers of other government regulations.
Herein lies the solution
Of course, all of this can easily be rectified, without changing legislation and in a way that will help enforcement teams track down unauthorised conversions and out-buildings, which would only require an amendment in procedures, whereby the VOA simply contacted the local authority before rubber stamping, allowing disputes to be resolved before banding and not afterwards.
Having such simple checks in place would not only alert the enforcement teams to the existence of an unauthorised conversion or structure, bearing in mind also that in such situations very often other forms of skulduggery are taking place but would likely deter many a dodgy developer or rogue landlord if they knew there was a stronger chance they would be detected.
Of course, none of this is to the VOA’s advantage, which is no doubt why they don’t bother consulting other organisations. Corporate bureaucracy is be-dogged by demarcation:-
“not my job description, not my problem”
being the open gate that so often allows rogue landlords to crap on the lawn.
And yet another benefit
An early warning flare would also help planning enforcement, whose job difficulties are further exacerbated by a rule whereby, if a property has been converted without permission but has been there for four years, the council can’t order it to be converted back to a single dwelling, leaving the family home forever divided up, unless the owners decide to reconvert themselves, so early discovery is crucial.
The VOA can rescind it’s council tax banding just as easily as they give it but while they go about their merry way without seeing their part in a far bigger picture they will continue to create problems that could be easily resolved by a phone call or email.
This is a red council herring.
The VOA don’t need to be in the loop at all. They are independent from councils, usually they aren’t even located in the same county.
The same result could be achieved by the local authority contacting itself (the council tax department) located within the same building.
I went around the houses with the VOA over Lockdown back in 2017 and I learned a lot of interesting things regarding the same sorts of questions you were asking.
1) How does a property get re-banded? There are several routes.
a) One is a VO7455 form – a council tax proposal form – which is a public document and includes numerous details concerning the property to be re-banded;
b) Local Authorities make a request based on who the hell knows what.
I know this because I submitted FoI’s to obtain the VO7455 forms from the VoA as they related to a dozen properties in Hounslow. Initially I was refused and I had to point out that it was an offence for the VoA NOT to release these to me before they relented. Then they claimed that they couldn’t comply because there were simply no forms submitted and the properties had not been re-banded in that way. In a phone conversation with a VoA staff member it was let slip that the re-banding had been requested by the Council’s revenue department. This then is how I believe the majority of the Lockdown properties are re-banded.
What does the VoA actually mean when they re-band a property as Band A?
The VoA’s role in this is to recognise what they refer to as the creation of an ‘hereditament’. Complex legal cases have turned on what is and is not an hereditament in law and greater minds than mine have have been wrapped around the axle over this. On one level, what this basically means is whether or not a property is ‘rateable’ – capable of being rated. This definition is pretty useless to most of us. Another definition of a completed hereditament as it relates to the subdivision of a small family home is that it ‘comes into being’ “when it is capable of occupation for the purpose for which it is intended.” Again, pretty useless for most people to get a handle on.
However, this much is clear – it is NOT the VoA’s function to determine self-containment for the purposes of LHA or even to determine WHO should pay the Council Tax – they simply decide what is or is not rateable. Therefore there is NO synonymity between an hereditament and a self-contained flat. Hereditament’s are not necessarily self-contained flats, but ALL self-contained flats are hereditaments. This is to say that in the case of Lockdown the mere fact that the VoA have classified the individual rooms as rateable hereditaments speaks nothing to their self-containment – they are rateable units within an HMO and this fact has been brought about by the remodelling knowingly undertaken by the landlord and recognised by the Local Authority.
Furthermore, the established hierarchy of payments requires that an HMO owner must pay the CT on an HMO and they should be charged the FULL Council Tax for each flat, cumulatively. That the ‘flats’ are not self-contained for the purposes of LHA is a matter that is clearly addressed by the benefit rules and the LHA rate payable is properly the shared rate and NOT the self-contained rate. All of this is well-documented if not well-understood and perversely NOT enforced.
NONE of this prevents the VoA from having its own extremely broad and vague definitions of self-containment which are only ever tested in Court it seems! But they simply do NOT bear on what is or is not payable by the DWP.
Because it seems we have at least THREE separate and competing definitions of self-containment through which a coach and horses can be driven:
1) Planning Law requires lawful permission for self-contained units which precludes the cooking.preparing and consuming of meals within these Lockdown Units;
2) Valuation Office rules allow for a completely different and very vague definition of self-containment which is for the purposes of defining a rateable unit and not much else.
3) DWP have a very specific definition of what can and cannot attract the self-contained rate of LHA and by this definition a Lockdown Unit cannot qualify.
How is it then, that the VoA whose determination of self-containment relates to neither planning nor benefits is the only one that seems to be taken into account here?
The guidance on the self-contained rate of LHA is unambiguous:
Single customers aged 35 years and over, and couples with no
dependent children
2.060 Single customers aged 35 years and over and couples with no
dependent children will be entitled to the rate for a one-bedroom
property, for example a one-bedroom flat or studio or other kind of self-
contained accommodation, provided they actually rent a property
of at least this size.
2.061 If people in this category choose to live in a property where they do not
have either:
• exclusive use of two or more rooms, or
• exclusive use of one room, a bathroom and toilet and a kitchen or
facilities for cooking
they will be entitled to only the shared room LHA rate.
So when we speak of ‘perverse incentives’ we need to understand that Council revenue departments have precisely that when it comes to re-banding. But by indulging in this revenue generating scheme they are passing off the CT to the tenants and not to the landlords. All of this has the effect of warping the very rental statistics that the VoA will use when it next comes time to set the LHA rates in the Broad Market Rental Areas. This will drive up the rents payable and the Rogue Landlords win again at the cost to the Public Purse. Meanwhile the Local Authorities get a windfall from the government from the New Homes fund because all this subdivision is actually classified as home creation. You can’t make this stuff up.
So the next time you hear that a young relative of yours is struggling desperately to find either affordable rent or and affordable property in which to start a family, think of this process. Lockdown is purchasing these properties at a premium because they are little publicly funded goldmines for them and them alone. In a very real sense it is THEY who are getting a free council house! Meanwhile your LA, the VoA, the DWP are all wringing their complicit hands telling you how complicated it all is and they can’t do anything about it.
An utter disgrace and a fraud on us all that continues unabated.
See: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/324708/lha-guidance-manual.pdf (p.29)
See also: https://www.property118.com/hmo-council-tax-changed-room/
See also: http://www.council-tax.com/selfcontainedunits.html
I forgot to add that since no Council (with the notable exception of Brent) has contested the status of these properties, within four short years we really will be dealing with 5/6 self-contained flats within small family homes. This will be a fait accompli – a game-changer with respect to the kinds of homes people can expect to find on the property market. I am not at all sure that this isn’t the ultimate goal of those perpetrating this profitable fraud – it will certainly be even more profitable by then! The clock is ticking.
Jon what a quite extraordinary level of depth of investigation and detail and thanks for sharing that.
On the three TV programmes I have done on this the development process was a tortuous one as the production teams struggled to understand how to turn it into a programme that people will get and I never delved as deep as you have there, concentrating solely on the HB/planning conundrum. TV Producers always thought this was too technical and opted instead for the more televisual angle of someone living in a cell.
On your reading of the full picture I doubt I would even have been approached by a researcher in the first place, so labyrinthine are the issues involved and when you point out “. Meanwhile the Local Authorities get a windfall from the government from the New Homes fund because all this subdivision is actually classified as home creation.” The whole thing is even more of a national scandal.
As you say “You cant make this stuff up.”
Tackling the issues from my end makes me think that us enforcement bods out there are merely trying to untangle a knot we didn’t create and who nobody else has any interest in us untangling, not even the poor occupants, who if we were to close the properties down would make them homeless again.