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