Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 18th March 2013
Report of the Cabinet Member for Housing, Building Maintenance and Community Safety
Introduction of Additional Houses in Multiple Occupation Licensing for the Castleland Renewal Area
Purpose of the Report
1. To declare an additional licensing scheme in the Castleland Renewal Area in relation to private rented sector houses in multiple occupation (HMO's).
1. THAT an Additional HMO licensing scheme for the Castleland Renewal Area is declared.
2. THAT the fee structure is agreed for Additional HMO licensing in Castleland Renewal Area.
3. THAT the Head of Legal Services be authorised to sign (and seal if necessary) the designation.
Reasons for the Recommendations
1. To improve the management standards and condition in HMO private rented accommodation in the Castleland Renewal Area.
2. To enable a fee to be charged to cover the cost of administering the scheme.
3. To authorise a person within the Council to confirm the Designation of the Castleland Renewal Area additional HMO licensing scheme.
2. The private rented sector is an increasingly important part of the housing provision in the Vale of Glamorgan. However, the 2009 stock condition survey clearly identified that older pre -1919 housing, the private rented sector and HMO accommodation have an above average rate of unsatisfactory housing conditions.
3. The Housing Act 2004 introduced a number of new enforcement mechanisms for improving standards in the private rented sector, in particular, the Housing Health and Safety Rating System and two different types of HMO licensing, mandatory licensing and additional licensing. The Housing Act 2004 gives power to Local Authorities to designate areas of their Authority as being subject to additional licensing in respect of some, or all, HMO's in that area that are not already subject to mandatory licensing.
4. In April 2007, the Welsh Government issued a General Approval to Local Authorities to implement Additional HMO Licensing, subject to the Council carrying out a thorough appraisal and a consultation exercise with stakeholders. The Welsh Government General Approval guidance states that Councils may introduce an Additional Licensing Scheme without obtaining Assembly approval, providing that certain requirements of the legislation with regard to evidence, consultation with interested parties and implementation are carried out. In particular, the Council must:
· Criteria 1 - Consult persons likely to be affected by the designation and consider any representations.
· Criteria 2 - Consider that a significant proportion of the HMO's of that description are being managed ineffectively so as to give rise to, or likely to give rise to, one or more particular problems either for those occupying the HMO's or for members of the public.
· Criteria 3 - As part of this, have regard to the extent to which any code of practice approved under section 233 has been complied with by persons managing HMO's in the area.
· Criteria 4 - Ensure that the introduction of additional licensing is consistent with the authorities overall housing strategy.
· Criteria 5 - Ensure that there is a coordinated approach in connection with homelessness, empty properties and anti-social behaviour.
· Criteria 6 - Consider whether there are any other courses of action available to the Council that might provide an effective method of dealing with the problem or problems in question.
· Criteria 7 - Consider that making the designation will significantly assist the Council in dealing with the problems in their area.
Relevant Issues and Options
5. In June 2007, the Cabinet approved the HMO Mandatory Licensing Policy. The Mandatory licensing scheme applies to all HMO’s across the whole authority where five (or more) people share basic amenities in properties with three (or more) storeys. To date, the Council has issued 9 licences but currently only have 6 HMO's subject to Mandatory Licensing.
6. On the 16th November 2011, the Cabinet noted the HMO Licensing Enforcement Plan. This plan identified the Castleland Renewal Area as having the highest number and proportion of sub-standard and poorly managed properties. The report also agreed to public consultation on additional licensing for HMO's within the Castleland Renewal Area.
7. The requirements for General Approval to designate an Additional HMO Licensing scheme have been considered by the Council. Each criteria set out in the Welsh Government's guidance has been considered, and a consultation exercise with stakeholders undertaken. The outcome of the consideration made for each criteria are detailed in Appendix 1 of the report and a summary of each is detailed below.
8. In respect of Criteria 1 - "Consult persons likely to be affected by the designation and consider any representations" a consultation exercise on additional licensing of HMO's in the Castleland Renewal Area was carried out between January and March 2012. The results from the consultation indicated that overall there was support for the principles of the scheme, although some landlords and letting agents objected to the introduction of Additional HMO Licensing. The objections to the scheme were based on costs and the additional bureaucracy it would create for landlords. Below are the Council's response to these concerns:
· With regard to the cost of the scheme and it's impact upon the landlord, the additional HMO licensing scheme will only be ‘costly’ to landlords who have property that does not meet the physical standard required by legislation, or who are not currently accredited.
· The scheme has been designed to recognise landlords who meet current standards and who participate in voluntary landlord accreditation through subsidised application fees as set out in paragraph 33.
· Where the properties do not meet the physical standard required by legislation, the cost of repairing and upgrading the property would be a necessity to meet legal requirement regardless of an additional HMO licensing scheme. Therefore, this is not an ‘increased’ cost on landlords.
· Becoming an Accredited landlord is good practice, and the Welsh Government is progressing legislation to make this a statutory requirement by April 2015. To encourage and support landlords in the first year before Accreditation becomes a statutory requirement, 50 free training spaces on Landlord Accreditation have been funded for landlords operating in the Castleland Renewal Area. For landlords who take up this assistance, the cost of licensing is reduced further.
· The additional administrative burden placed upon landlords will be necessary as licensing application forms and documented evidence of safety certificates etc will need to be submitted as part of the process. To facilitate this process, the application form will be available on-line for download and an Email address provided to enable documentation to be submitted through this method in addition to the post.
9. In respect of Criteria 2 - "Consider that a significant proportion of the HMO's of that description are being managed ineffectively so as to give rise to, or likely to give rise to, one or more particular problems either for those occupying the HMO's or for members of the public" from the HMO Enforcement Plan a breakdown of key risk factors and risk assessment scores for HMO's by ward clearly identified the Castleland Renewal Area as having the highest number and proportion of sub-standard and poorly managed properties. Of the 59 HMO’s identified in Castleland, over half have a significant hazard and inadequate fire safety and over a third have unsatisfactory management arrangements. The tenant consultation during 2011 further revealed that management standards were poor:
· less than 50% of tenants have been given a gas safety certificate.
· less than 15% of tenants have been shown an electrical or energy performance certificate.
· 40% of tenants stated that they had either been provided with only battery operated smoke alarms or no smoke alarms at all, raising concerns over fire safety in these properties.
· less than 55% of tenants knew whether their bond or deposit had been protected.
· over 25% of tenants stated that the landlord fails to respond promptly to repair issues, and
· less than 35% of landlords regularly inspect the property to address any repairs.
10. In respect of Criteria 3 - "As part of this, have regard to the extent to which any code of practice approved under section 233 has been complied with by persons managing HMO's in the area," the Rent Only Residential Management Code for Wales adopted by the Welsh Assembly Government in February 2006 gives guidance to landlords & agents on their responsibilities towards each other and to various clients. The survey and consultation conducted highlighted that significant portions of the guidance is not being adhered to by landlords & agents. The code includes requirements for managers to protect any money held by them, but not owned by them, that inventories should be provided, that managers must be aware of their obligations relating to gas safety, works are completed and good communication with the tenants is maintained about the nature and timescales of works to be carried out. The evidence from the consultation undertaken shows a significant number of HMO's in the area are not meeting this code.
11. In respect of Criteria 4 - "Ensure the introduction of additional licensing is consistent with the authorities overall housing strategy" the Vale of Glamorgan Council’s Local Housing Strategy 2007-2012 highlights the Council's commitment to improving private sector housing conditions in the Castleland area with the declaration of the Renewal Area. The Housing Renewal Policy 2011 – 2013 recognised that only a limited number of the HMO within the Vale of Glamorgan are covered by Mandatory licensing and that consideration should be given to the introduction of additional licensing, initially commencing in the wards within the Renewal Area.
12. In respect of Criteria 5 - "Ensure that there is a coordinated approach in connection with homelessness, empty properties and anti-social behaviour" the Vale of Glamorgan has a number of strategies and policies dealing with homelessness, empty properties and anti-social behaviour which will be combined with the introduction of an Additional Licensing Scheme to secure a co-ordinated approach.
13. in respect of Criteria 6 - "Consider whether there are any other courses of action available to the Council that might provide an effective method of dealing with the problem or problems in question" the Council has used a risk assessment approach to target inspections and enforcement of physical and management standards in HMO's using current legislation. Over half of the HMO's in the Castleland Renewal Area have had notices served under the previous or current legislation, yet still, half of these have significant hazards due to lack of maintenance or poor management and over half are classed as medium or high risk for fire safety issues. While other courses of action are available to the Council to deal with some of these issues in HMO's, they will not provide the holistic approach that the licensing regime provides. The Council can only make a sustainable improvement to the HMO's in consideration if landlords play their part too. In November 2008, the Landlord Accreditation Wales (LAW) Scheme was launched. To date, 20 landlords within Vale of Glamorgan have become accredited since the launch of the scheme and there as been no uptake from landlords of HMO’s in the Renewal Area. While incentives to support landlords to become accredited in the area have been made available, the consultation revealed that only 27% of respondents believed that a voluntary scheme could improve standards of HMO management.
14. In respect of Criteria 7 - "Consider that making the designation will significantly assist the Council to deal with the problems in the area" the introduction of an additional licensing scheme would have the following direct benefits:
· Improvements to the physical accommodation.
· Improvements to tenant’s Health & Safety.
· Sustainable improvements to the Castleland Renewal area.
· Enable better value for money secured by a proactive approach in one area.
· Provide a consistent approach to Tenancy Management & Property Conditions.
· Improve landlords' knowledge of their legal requirements and good practice.
· Eradication of landlords who are not “fit and proper”.
15. In view of the support for the scheme and evidence of poor management and housing condition of HMO's within the Castleland Renewal Area, designating an additional licensing scheme for HMO's within the Castleland Renewal Area will assist the Council to secure housing improvements within the area.
16. It is proposed that Additional HMO Licensing be designated in the Castleland Renewal Area. The full designation for this scheme is detailed in Appendix 2 of this report. The scheme will be operated in accordance with the Housing Act 2004 and associated regulations.
17. It is proposed that the scheme will be implemented from the 1st July 2013. The area will be designated for a period of five years. The fire safety, amenity and management standards that will be applied to HMO's for both mandatory and additional licensing are detailed in the existing HMO Licensing Enforcement Plan at annex C to G.
18. The Council is required to provide a three month period before commencement of the scheme to allow for marketing and publicity of the scheme. As soon as the designation is made, the authority must publish the decision within 7 days. This will be undertaken on the Council's internet site, public notice boards and with two local newspapers.
19. Landlords will be required to submit a fee with the license application. The license and accompanying fee will normally be for a five year licence, although in some circumstances the Council may issue the licence for a lesser period. The following fees will apply for additional HMO licensing:
· A mandatory or additional HMO licence = £630
· A 10% reduction where the landlord is accredited under the Landlord Accreditation Wales Scheme = £567
· A 20% reduction where the HMO meets all licensing and management standards = £503
· A 30% reduction where landlords are accredited and where the HMO meets all licensing and management standards = £441
· A 50% reduction for a HMO licence to a new owner on revocation of an existing HMO licence = £315
Resource Implications (Financial and Employment)
20. The area-based approach to additional licensing allows the licensing and inspection of the HMO to be completed within existing resources over the five years of the scheme. Income generated from the scheme will be limited due to the low numbers. The fees will be subject to periodic review based on changes in staffing on-costs and the Council's budget process.
Sustainability and Climate Change Implications
21. The introduction of additional licensing will encourage landlords to improve and maintain accommodation. This in turn will support employment of local people, provide much needed single person accommodation within the Barry Town Centre area and increase the use of local services and investment in the local economy. It will also allow better regulation of this sector which will enable a sustainable housing stock for those persons wishing to occupy lower cost rented/shared and self -contained flat accommodation.
Legal Implications (to Include Human Rights Implications)
22. Part 2 of the Housing Act 2004 details the powers available to Local Authorities with regard to licensing HMO's. The Licensing and Management of Houses in multiple occupation and other Houses (Miscellaneous Provisions) (Wales) Regulations 2006 applies to Wales.
23. Section 56 of the Housing Act 2004 gives power to Local Authorities to designate areas, or the whole of their district, as subject to additional licensing in respect of some or all of the HMO's in its area that are not already subject to mandatory licensing.
24. On designation, the Authority must publish the decision within 7 days. Section 58 (4) of the Housing Act 2004 requires a three month period before commencement of the scheme to allow for marketing and publicity of the scheme. The full designation of the scheme is detailed in Appendix 2 of the report.
Crime and Disorder Implications
25. The introduction of an additional licence scheme will help to control the manner in which HMO's are maintained and managed, protecting the occupiers and other residents in the area.
Equal Opportunities Implications (to include Welsh Language issues)
26. There are no negative implications concerning equal opportunities from the designation of the area. The scheme will help improve housing standards for the more vulnerable tenants in the housing market.
27. This report is consistent with the following Corporate and Service objectives of the Council: Community Well Being - to make the Vale a safe and healthy place in which individuals, children and families can live their lives to the full.
Policy Framework and Budget
28. This report is for Executive decision.
Consultation (including Ward Member Consultation)
29. Consultation with all relevant stakeholders and residents is required under Section 56 of the Housing Act 2004 prior to designation of an additional HMO licensing scheme.
30. A public consultation exercise was carried out between January and March 2012 that included consultation with local ward members for Castleland, Buttrills and Court wards. The local members were invited to a number of briefing sessions on the proposals prior to the public consultation. Councillors C. Elmore, P. Drake, B. Brooks and R. Bertin attended the sessions and broadly supported action to regenerate and improve the private rented accommodation in the renewal area, and in particular, Holton Road.
Relevant Scrutiny Committee
31. Housing and Public Protection
Guidance on the introduction of additional HMO and selective licensing schemes in Wales Housing Act 2004.
Elen Probert, Principal Housing and Pollution Officer, Public Protection
Lawyer, Legal Services
Principal Finance Officer, Finance
Rob Thomas, Director of Development Services