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Government landlord licensing scheme branded a failure

Rebecca Rutt
by Lovemoney Staff Rebecca Rutt on 31 January 2013  |  Comments 6 comments

The landlord regulation scheme created by the Scottish Government has been a costly mistake says one MP.

Government landlord licensing scheme branded a failure

In the five years since a multi-million pound scheme was introduced to crack down on rogue landlords in Scotland, only 11 individuals have been reported.

The Landlord Registration Scheme, set by up the Scottish Government, has cost landlords and the taxpayer nearly £18 million since its creation.

But the scheme has been a costly failure, says the Scottish Conservatives who obtained the data, who argue that it has completely failed to weed out rogue landlords.

A costly failure

Since the creation of the scheme, landlords have paid £11.2 million in fees, the Scottish Government has contributed a grant of £5.2 million and fees for running the website have come in at £300,000.

But during this time only 40 landlords have been refused registration, while 200,000 have been allowed onto the list.

The scheme was set up to protect both tenants and landlords. It requires landlords and agents to pay a fee of £55 to each local authority they apply to, while landlords also have a further fee of £100 per property. All members need to prove they are “fit and proper persons to let property” before their registration will be accepted.

But these figures highlight the problems with trying to regulate landlords and suggest the scheme has become a cash cow for the Government.

The details were revealed through parliamentary questions by the Scottish Conservative MSP Alex Johnstone.

Rogue landlords

The scheme reports that there have only been 40 rogue landlords since 2006 in Scotland, but in reality numbers are significantly higher.

“This farcical programme, introduced with the best of intentions, is failing to deliver at a tremendous cost to the taxpayer,” argues Johnstone.

He said responsible people with aspirations to get into the property business are being hit in the pocket because of this inadequate scheme.

Landlord regulation

There is a real lack of regulation when it comes to landlords.The last Government planned to introduce a landlord register though this was dumped by the Coalition. Opponents of such regulation will be buoyed by the fact that the Scottish scheme hasn’t worked, which raises questions about similar attempts at regulation, such as one in Newham in London.

Throughout the rest of the UK there are several industry bodies for the private rental area, but most of these are self-regulated. The most respected are the Association of Residential Letting Agents (ARLA) and The Property Ombudsman.

However, neither are Government-regulated. That means tenants can only complain about lettings agents or landlords who have chosen to register with them. This means if a tenant falls prey to a rogue landlord, or letting agency, there’s very few options around apart from going through a small claims court. Read Small claims court: get the money you are owed.

Tracy Kellett, spokesperson for BDI Home Finders, believes that tenants do need some form of protection. However, she points out that any scheme needs to be properly managed, checks need to be robust and well organised and cannot rely on tenants complaining as they are often scared of punitive retribution and losing their homes. 

“To be successful, councils need to be carrying out spot checks diligently. A costly, time consuming process,” she adds.

Full regulation may not be the answer, but it seems that self-regulation isn't either. So what should be done to clean up the private rental sector?

More on landlords and renting:

Landlords: What to do if your tenant won’t pay!

Tenants: Know your rights

New websites allow landlords to review their tenants

How to pay less rent as a property guardian

The lessons I've learned since becoming a buy-to-let landlord

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Comments (6)

  • EmmasMum
    Love rating 0
    EmmasMum said

    Getting off lightly in Scotland. In selected areas of Hartlepool you have to pay £500 per property for registration that lasts five years.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • r
    Love rating 98
    r said

    Ha! The joys of "Self-rule for Scotland"!

    r.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • DJEJ
    Love rating 1
    DJEJ said

    HUH,

    Tracy Kellett, spokesperson for BDI Home Finders, believes that tenants so need some form of protection.......................who re you kidding Tracy!

    I'm a landlord ,thought I'd do good by having a DHSS tenant that wasnt a laugh it takes up to 3 months to remove them at my cost when they dont pay & I cant touch the deposit * another great scheme to protect bad tenants ......................then there are their squatting rights ................I guess I'm sick ot tenants rights - let them live in a cardboard box . Tracy does not rent out any places ?

    Scotland has WAY MORE than 40 unscrupulous land lords believe me ask any student in Glasgow !

    I guess I need to get instruction on how to be the" perfect landlord" from an MP and screw the system properly !!!!!!!!!!!!!!!!

    Report on 31 January 2013  |  Love thisLove  0 loves
  • CuNNaXXa
    Love rating 410
    CuNNaXXa said

    As with everything in life, you'll have good landlords and bad landlords, as well as good tenants and bad tenants.

    I rented out a room a few years back, through the local council, who provided me with someone who, it turned out, had mental problems, which wasn't disclosed to me upon application. The threat to my family and pets was substantial enough to warrant me to ask him to leave immediately.

    We don't need another layer of licensing. Straight forward legislation that offers protection for both sides should be enough, with effective policing should one side breach legislation.

    So, why doesn't the current system work? Well, it probably has something to do with the simple fact that when one side breaches legislation, there is no effective mechanism or policing to protect the interests of the damaged party. The damaged individual is left to try and claim back what they have lost using a civil system rather than a criminal system.

    (and I thought breaches of legislation passed by Parliament was criminal in nature).

    Report on 31 January 2013  |  Love thisLove  0 loves
  • sodit
    Love rating 135
    sodit said

    Contribute generously to your local flute band, and then whenever you get trouble with a tennant, ring up your local paramilitary organization.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • tuttogallo
    Love rating 99
    tuttogallo said

    As a landlord, I would like protection from bad tenants, but I am unlikely to get this.

    If I am forced to register, I will simply add the registration cost to the rent and inform the tenant that this increase is due to official action.

    I have always done repairs promptly and provided good quality accommodation, but have in the past ended up with bad debts. I have also been lied to quite blatantly and had my property left dirty and damaged.

    These problems have diminished greatly since I employed the top estate agent in the area and went for middle class and professional tenants. Yes it is a question of class. Sad isn't it

    Report on 17 February 2013  |  Love thisLove  0 loves

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