MacRoberts Property Law e-update 13/08/07
LET THE BUY-TO-LET BUYER BEWARE
Unwary buy-to-let landlords may risk loosing their rental income by failing to comply with the landlord registration requirements introduced by the Antisocial Behaviour etc. (Scotland) Act 2004 (“the Act”).
From 30 April 2006 all private residential landlords have been under a statutory obligation to register with the local authority for the area in which their property is situated. There are some exemptions to this requirement set down in the Act, for example where the property is the only or main residence of the landlord and is occupied by no more than two additional tenants or where the property is being held by an executor pending the winding up of a deceased’s estate.
The Act, introduced as part of the Executive’s approach to tackling anti-social behaviour, imposes a duty on local authorities to assess the suitability of private residential landlords by way of a “fit and proper person” test. When conducting such an assessment local authorities require to consider whether the landlord has:
- been convicted of a criminal offence, particularly drug-related offences or those of a violent or fraudulent nature;
- unlawfully discriminated against his or her tenants’ on the grounds of ethnic background, sexual orientation, gender or disability and/or;
- previously been held to have contravened housing law or the law of landlord and tenant.
Registration lasts for a period of 3 years and is renewable thereafter. Whilst the cost of registration can be as little as £66 for a single property and £11 for each additional property thereafter, failure to comply with the provisions of the Act is a criminal offence (which could result in a £5000 fine). The landlord also runs the risk of having their rental income suspended by the Court on the application of the local authority in question.
Landlords who have opted to employ letting agents to assist them in the marketing and maintenance of the property must also take care. In such cases not only must the local authority be satisfied that the landlord is a “fit and proper person” under the terms of the Act but it must also satisfy itself that the letting agent being used by the landlord also meets that standard. Prudent landlords may wish to request confirmation that their letting agent is appropriately registered prior to entering into any legally binding contract. Landlords can confirm whether their letting agent is registered by logging onto www.landlordregistrationscotland.gov.uk or by contacting the relevant local authority in the area where their property is situated.
The requirement to register currently sits alongside the existing Houses Multiple Occupation (HMO) licensing system. Landlords who already hold a HMO license do not require to pay a separate fee in order to register with the local authority as a private landlord. A 75% discount is also available to registered landlords who are submitting an application in respect of a property in a second or subsequent local authority area.
Landlords with properties south of the border take note that the Law Commission for England and Wales recently published ‘Encouraging Responsible Letting’, a consultation paper which outlines its proposals for the regulation of private landlords in England and Wales.
The Commission appear to be taking a different approach to enforcement of the proposed legislation in England and Wales. However proposals suggest that landlords down south will also become subject to a “fit and proper person” test. The Commission’s consultation ends on the 12 October 2007 with legislation likely to follow early in the New Year.
For further information or assistance regarding private residential landlord registration in Scotland please contact Laurence Fraser or Judith Stephenson on 0141 332 9988
© MacRoberts 2007