The Government has rejected calls by MPs to allow local authorities to confiscate properties of rogue landlords but has backed the possibility of further funding for enforcement, particularly to ensure the tenant fee ban is enforced. The ban is set to come in next April.
An official response to the Housing, Communities and Local Government Select Committee recommendations on reforming the private rental sector, says councils already have powers to take over the management of a privately rented property in place of a landlord through the use of a management order.
The Government says: “Management orders provide local authorities with almost all the rights of a landlord including: collecting rent, setting rent levels, a right to possession of the property (subject to the rights of existing occupiers), and a right to grant new tenancies subject to the landlord’s agreement.
“They are permitted to use the income from the property to cover their management costs and can retain any surplus, provided it is used for private sector housing enforcement purposes. Whilst this stops short of the local authority being able to sell a property, management orders allow local authorities to take the place of the landlord in the management of the property.
“For cases where debts are owed by a rogue landlord, the local authority may also place a charge on a landlord’s property which enables the recovery of costs when the property is sold.”
The response also pledges more support for local authority enforcement strategies such as allowing councils to retain financial penalties.
The Government said it was working with local authorities to understand any additional resource needs, including options for funding informal enforcement activity, such as in the first year of the introduction of the tenant fee ban to enforce the legislation.
The response says: “The Tenant Fees Bill provides additional funding to local authorities in the first year of the policy to support implementation and education to enforce the legislation.”
MPs had made several recommendations, such as extending the time limit on issuing Section 21 notices to beyond six months. This was also rejected by the Government, stating: “We believe the current legislation strikes the right balance between the interests of landlords and tenants and we have no plans to change the legislation in this way.”
However, the Government recognised more awareness of tenant rights was needed as well as more support for local authority enforcement.
It backed the creation of a national benchmarking scheme, publishing data on the number of complaints local authorities receive and how these are resolved, whether through informal routes or more formal enforcement mechanisms, while local residents should be able to compare enforcement levels in their areas with similar authorities across the country.
The response also says the Government intends to require private landlords to join a redress scheme to ensure tenants who do not use an agent have access to independent redress without going to the courts.