This page has been prepared by the House of Commons Library to provide information on the Local Government Finance (Tenure Information) Bill 2015-16 which is scheduled to receive its Second Reading on 22 January 2016 (initially 30 October 2015).
The Bill’s purpose
Dame Angel Watkinson’s Bill will require tenants to provide tenure information, including their landlord’s address, when completing Council Tax registration forms. The aim of disclosing this information would be to make it easier for local authorities to identify and carry out enforcement activity, where necessary, against private sector landlords.
How will it achieve this?
The Bill is seeking to insert a new section into the Local Government Finance Bill 1992 to place a duty on billing authorities to request tenure details when residents supply information for Council Tax purposes. Residents, owners or managing agents would be required to provide tenure information unless it had already been supplied, or the authority already holds the information, within 21 days of the billing authority’s request. There would be provision for circumstances where the details requested, e.g. the landlord’s name/address, are not in the tenant’s possession.
Failure to provide the information could result in the imposition of a financial penalty. The Bill provides for the information supplied to be used for purposes ‘including but not limited to’ housing.
Comment on the Bill
To date, the main comment on this Bill has come from the landlord associations.
The Residential Landlords Association (RLA) supports this measure as an alternative to licensing schemes operated by local authorities. The RLA argues that criminal landlords do not seek a licence and, therefore, these schemes fail in their central purpose while the cost of licensing places a ‘burden’ on ‘good’ landlords.
The RLA’s Election Manifesto 2015 proposed:
Collecting the information in this way would greatly assist local authorities to enforce all regulations pertaining to the private rented sector. It could also support HMRC’s work to clamp down on the minority of landlords who fail to fully declare their income. We understand that information obtained through licensing is already being used by HMRC to support enforcement activity in this way.
The RLA’s briefing in support of the Bill identifies the following potential benefits:
- Collecting the information in this way would greatly assist local authorities to enforce all regulations pertaining to the private rented sector. It could also support HMRC’s work to clamp down on the minority of landlords who fail to fully declare their income. We understand that information obtained through licensing is already being used by HMRC to support enforcement activity in this way.
- Local authorities would also have an up to date picture about the size of the private rental market in their area enabling better, evidence based policy to be developed. It could also be used as an invaluable tool to communicate with landlords.
- This proposal would make it much more difficult for criminal landlords to avoid being identified since it would be the tenant disclosing where their properties are and who the landlord is.
- If either the landlord or managing agent is not identified by a tenant because they are not known, the tenanted address could be checked against the land registry database and the property owner identified. This would provide local authorities with the intelligence to target their finite enforcement resources on these properties.
Is legislation required?
The Housing and Planning Bill 2015-16, currently before Parliament, is seeking to introduce a database of rogue landlords and letting agents for use by local authorities. The Bill is also seeking to make information on landlords held by mandatory tenancy deposit schemes accessible to local authorities to assist with their private sector enforcement work under Parts 1-4 of the Housing Act 2004. The Explanatory Notes to the Housing Bill make it clear that data held under Part I of the Local Government and Finance Act 1992 (related to Council Tax) can currently be used by a local authority in exercise of its functions under Parts 1-4 of the 2004 Act. It seems that few councils actually use this facility.
During the Housing and Planning Bill’s Second Reading debate (2 November 2015) Dame Angela spoke in support of a register of ‘rogue’ landlords and referred to measures in her Bill:
… as local authorities do not know which properties in their areas are rented privately, or who or where the landlords are, it would be difficult to compile such a register, except after the event when a rogue landlord has been brought to their attention.
A simple, low-cost method of acquiring the necessary information would be to add a question to council tax registration forms seeking information about the owner of the property. That is proposed in my private Member’s Bill, the Local Government Finance (Tenure Information) Bill. The proposal would facilitate the implementation of clause 22 by providing a database of privately rented properties and landlords from which to root out the unscrupulous ones. The information would be readily available for the effective enforcement of existing regulations affecting the private rented sector and the taxation of landlords. It would help with housing-related issues, such as investigating illegal sub-letting, unregulated houses in multiple occupation and benefit fraud, as well as planning enforcement and public health issues. It would help the police when criminal offences are committed, and Her Majesty’s Revenue and Customs when rental income is not being declared for taxation purposes.
Councils may add such a question already, but they are not required to do so.
She went on to say that she would seek to table an amendment to the Housing and Planning Bill to require the addition of a question on tenure to Council Tax registration forms.
DCLG wrote to all local authorities on 4 November 2015 to remind them of their existing powers in this area:
This Information Letter reminds local authorities in England of the existing powers they already have through the Local Government Finance Act 1992 (“the 1992 Act”) to collect data for the purposes of council tax administration. It is a matter for local authorities to decide what type of data the provisions cover.
Section 237 of the Housing Act 2004 allows data that the local authority has collected for housing benefit or council tax purposes to be used for the exercise of the local authority’s housing functions under Part 1 to 4 1of the Housing Act 2004. Councils therefore, may wish to consider whether to utilise data collected for council tax administration purposes, to assist them in their housing compliance functions. For example, we are aware that some authorities already use the powers in the1992 Act to collect information on tenanted properties and landlords. This data could help local authorities to get a better understanding of tenanted properties and landlords, which in turn could help enforce housing standards.
Landlord details – tenants’ rights
Landlords are required to provide tenants of residential premises with an address in England or Wales for the purpose of serving notices under section 48 of the Landlord and Tenant Act 1987.
Section 1 of the Landlord and Tenant Act 1985 gives tenants the right to request the landlord’s name and address in writing from the agent or person who collects the rent – this should be supplied within 21 days. Failure to respond withiout reasonable excuse is a criminal offence.