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ARLA’s Response to the Law Commission Report - August 2008

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ARLA’s Response to the Law Commission Report August 2008 & The Law CommissionHousing: Encouraging Responsible Letting
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ARLA’s Response to the Law Commission Report - August 2008

and The Law CommissionHousing: Encouraging Responsible Letting

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Other ARLA Press Releases on this site

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The 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.

ARLA PRESS RELEASE: Law Commission Report - Great Expectations Says ARLA -14 August 2008

Much 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.

The 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.

These 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.

ARLA 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.

ARLA 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.

The 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 Standards board."

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.

"If 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.

ARLA 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.

ARLA is the Lettings and Residential Management Division of the Federation of Property Professionals.

Source ARLA

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Housing: Encouraging Responsible Letting - Recommendations

On 14 August 2008 we published our final proposals on better regulation of the private rented sector in the report Housing: Encouraging Responsible Letting.

The 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).

This 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.

The 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.

Background

On 13 July 2007 we published a consultation paper. A summary is available, together with the press release.

The consultation period closed on 12 October 2007.

The 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.

The 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).

The 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.

We also published two supplementary papers:

Supplementary Paper 1 - gives a more detailed explanation of the law on housing conditions, harassment and unlawful eviction.

Supplementary Paper 2 - deals in greater detail with estimating the costs of improving housing conditions.

Law Commission Press Release 14th August 2008

A new era for the private rented sector

As 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 way.

Based 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

  • Creating a housing standards monitor (for each of England and Wales) for the private rented sector
  • 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
  • Launching a pilot programme for home condition certificates

The Commission proposes that independent evaluation and development of appropriate incentives to make the programme attractive to landlords should supplement these initiatives.

Professor Martin Partington, who was the Commission's Special Consultant on Housing Law in charge of the project, said

"Too 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 market.

The 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."

Source: Law Commission

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See also

The Golden Age for The Landlord? Rental Demand Reaches Record High ‘Generation Rent’ must be given Regulatory Protection - October 2010

Housing Minister Grant Shapps promises 'no more red tape' for private landlords - June 2010

ARLA has appointed Sue Hughes-Thomas as president - June 2010

ARLA launches buy-to-let mortgage comparison site - March 2010

Response to FSA Paper on Mortgage Lending - October 2009

Response to statistics from NLA on rental arrear-October 2009

Demand in rental market returns for the first time since recession began - 28 September 2009

Review of ARLA Agreement Magazine on Insurance - August 2009

Property Woman of the Year ARLA sponsors young property woman award at the NLA Property Women Awards 2009 - May 2009

ARLA welcomes the Government’s “historic shift in thinking” on the private rented sector towards improved industry standards - May 2009

ARLA launches new licensing scheme to protect consumer interests - Consumer interests safeguarded by letting agent licensing - May 2009

ARLA - Research Reveals Britain’s Reluctant Landlords - April 2009

Regulation needed to protect business of residential letting - February 2009

ARLA demands an end to unregulated Letting agents - January 2009

ARLA Welcomes Rugg Review on the Private Rented Sector - 24 October 2008

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