ARLA’s Response to the Law Commission Report - August 2008
Law CommissionHousing: Encouraging Responsible Letting
ARLA Press Releases on this site
Law Commision have produced the report on the Private Rented Sector. Some of their
recommendations reflect views expressed in the Carsberg Review and others areas
ARLA have lobbied in the past.
PRESS RELEASE: Law Commission Report - Great Expectations
Says ARLA -14 August 2008
of The Law Commission report, "Encouraging Responsible Renting," just published
(Thursday 14 August) has been welcomed by the Association of Residential Letting
Agents, ARLA, but believes that the Commissioners expect more from local authorities
for the implementation of their proposals than many they will be able to deliver.
Law Commissioners call for the regulation of letting agents, industry wide standards
and accreditation schemes for landlords, although a high proportion of mainstream
lettings agents are already members of regulatory professional bodies.
organisations have already implemented one of the most significant recommendations
of the Carsberg Report and set up the Industry Standards Board. This draws on
the codes of practice of ARLA, NAEA, RICs and the Ombudsman for Estate Agents.
has sees the Commissioners report as an opportunity to bring all lettings agencies
under the provisions of the Consumer and Estate Agents Redress. This provides
powers for compulsory redress while the Estate Agents Act provides for the banning
of unprofessional and dishonest Estate Agents from trading. This, ARLA has always
said, should apply to all lettings agents.
has mandatory housing standards and codes of management practice for landlords
called for in the report all relate to provisions currently existing with the
2004 Housing Act under the Housing Health and Safety Rating System. Unfortunately
the approach of many local authorities has not been uniform due to lack of resource.
Commission has suggested that the Office of Tenants and Social Landlords could
operate for the private sector and proposed separate housing standards and separate
monitors for housing standards in England and Wales, and ARLA would express concerns
because of the level of expertise available for the PRS as opposed to the Social
Sector. These are two completely different issues.
"We must start with
a single code and a single set of standards, otherwise we will end up with different
monitoring for different standards," commented Ian Potter, Head of Operations
for ARLA. That is why the professional bodies have already set up the Industry
The same reservations over implementation and monitoring apply to landlords' registration
where it will up to the local authorities to monitor accreditation and home conditions.
The lessons being learnt in Scotland from Mandatory Landlord Legislation must
be used to ensure any system is capable working equitably in practice.
we are not careful, we will end up with each local authority setting and implementing
its own rules, its own monitoring practices and its own cost structures,." said
Ian Potter. "We have seen this already with Housing, Health and Safety Standards.
This legislation exists but in many areas has already failed due to lack of action
by the local authorities." ARLA believes that the most practical method to improve
standards where necessary is to treat the letting of residential property as a
business and allow for capital allowances and for other fiscal incentives to bring
about improvements in the rental stock.
see this report in conjunction with all the other reports on the PRS recently
published or due to be publish as an opportunity to create an environment that
will allow a well regulated Private Rented Sector to expand and flourish with
a balance between the requirements of the providers and the consumers.
is the Lettings and Residential Management Division of
the Federation of Property Professionals.
Encouraging Responsible Letting - Recommendations
14 August 2008 we published our final proposals on better regulation of the private
rented sector in the report Housing: Encouraging Responsible Letting.
project, which arises out of our previous work on housing law reform and tribunals,
aims to identify and address regulatory challenges in the private rented sector.
This is the first project undertaken jointly with the Welsh Assembly Government
(housing is a policy area devolved to the National Assembly for Wales).
project is not proposing major changes to the law. Rather, it examines ways in
which the current law can be made more effective. There is a great deal of law
that applies to the sector, but much of it does not work as Parliament intended.
As a result, the standards set by the law are often not met, particularly in relation
to the physical condition of housing. In turn, these failures contribute to the
sector suffering from a poor reputation which, arguably, gets in the way of it
playing as full a part as it should in providing housing.
report recommends a programme of staged reforms based on principles of smart regulation.
Following responses to our consultation paper, we propose a system of self-regulation
designed to enhance voluntary initiatives already in place, leaving open the option
of future reform to create a compulsory system. It is intended that implementation
of our proposals would harmonise and simplify of the current system in an affordable
way, with benefits to both landlords and tenants.
13 July 2007 we published a consultation paper. A summary is available, together
with the press release.
consultation period closed on 12 October 2007.
consultation paper surveyed the development of regulation of the privare rented
sector and anlysed recent developments in regulatory theory and practice. The
paper then presented provisional proposals aimed at encouraging better management
of rented property.
central proposal made in the consultation paper was for a scheme of "enforced
self-regulation". Landlords would be required by law either to belong to an accredited
self-regulatory organisation, or to let through an agent who is a member of an
accredited agents' organisation. The self-regulatory organisations would be the
existing or new national and regional landlords' associations or local authority
schemes. Accreditation of organisations would be undertaken by a central regulator,
which would oversee their codes of practice and disciplinary proceedings. The
aim was that this scheme would replace courts and tribunals as the first port
of call for disputes between landlords and tenants, and would remove incentives
for landlords to keep property in poor repair (and evict tenants who object).
paper considered, but provisionally rejected, an enhanced version of voluntary
self-regulation on the one hand, and a compulsory licensing scheme on the other.
As an alternative, or additional, mechanism, the paper considered property certification,
like an MOT test for housing.
also published two supplementary papers:
- gives a more detailed explanation of the law on housing conditions, harassment
and unlawful eviction.
Paper 2 - deals in greater detail with estimating the costs of improving
Commission Press Release 14th August 2008
new era for the private rented sector
the third and final part in its series on housing law reform, the Law Commission
today announces its proposals for better regulation of the private rented sector.
The report, Housing: Encouraging Responsible Letting, follows wide
consultation with both landlords and tenants. It focuses on improving the overall
coherence and stability of the current private rental framework in a cost-effective
on the principles of smart regulation, the Commission recommends a programme of
staged reforms designed to promote self-regulation and enhance voluntary initiatives
already in place in England and Wales. The proposals include
a housing standards monitor (for each of England and Wales) for the private rented
Establishing an associated stakeholder board to which representatives of all sides
of the private residential rented property sector are appointed
Developing a single code of housing management practice for landlords
Making landlord accreditation schemes available in every local authority area
a pilot programme for home condition certificates
Commission proposes that independent evaluation and development of appropriate
incentives to make the programme attractive to landlords should supplement these
Martin Partington, who was the Commission's Special Consultant on Housing Law
in charge of the project, said
much privately rented property is in a poor condition and poorly managed: the
law does not operate as Parliament intended. An increasing number of people are
deciding to rent in the current economic climate making it more important than
ever that the private rented sector takes its place effectively in the housing
recommendations in our report are aimed at benefiting both landlords and tenants
by enabling them to use existing legal processes more productively thereby more
fully realising the intended impact of housing legislation. Implementation of
these reforms would not only improve rental conditions for tenants, but also help
to build the reputation and professionalism of landlords. More broadly, it would
encourage institutional investment in the provision of rental accommodation, enhancing
the important role of this sector in the wider economy."
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