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Proposals around the Scottish short-term lettings market

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Rent Smart Wales enforcement intensifies

Monday 21 January 2019

It's now been well over two years since the introduction of Rent Smart Wales. Here we take a look at recent enforcement activity, with rent repayment orders becoming more common and enforcement teams showing renewed vigour to ensure that no stone is left unturned.

Enforcement activity is on the rise with Fixed Penalty Notices now being served regularly. In total there has been nearly 400 fixed penalty notices issued across Wales, with 44 prosecutions, the majority being within the south of the Country. Rent Smart Wales has also expressed that they are looking to increase the efficiency of systems and processes, so the rate is only likely to increase.

Rent Repayment Orders
The Housing and Planning Act 2016 significantly increased the scope for rent repayment orders and since 6 April 2017, landlords are far more likely to face a Rent Repayment Order as a penalty for non-compliance.

Under the Rent Repayment Order a tenant or local authority can seek to have up to 12 months of rent, Housing Benefit, or Universal Credit repaid, if they can prove beyond reasonable doubt that the landlord is guilty of one of the qualifying offences. This is usually in addition to other fines.

In a recent case, Rent Smart Wales successfully applied for the repayment of more than £22,000 of rent paid to an unlicensed landlord.

Pembrokeshire landlord Yvette Phillips, of Robert Street, Milford Haven, has been ordered to repay £22,357.71 in housing benefit that was paid to her during the time she was operating illegally after Rent Smart Wales successfully applied to the Residential Property Tribunal (Wales), the independent tribunal for resolving disputes relating to private rented and leasehold property, for the Rent Repayment Order.

Trading as estate agent R Miles Scurlock of Milford Haven, Mrs Phillips became the first commercial agent to be prosecuted last year for operating without a license. Cardiff Magistrates fined her £4,600 for three offences with £671 costs and a £170 victim surcharge.

Cabinet Member for Housing and Communities at Cardiff Council, the single licensing authority for Rent Smart Wales, said: “Non-compliance with Rent Smart Wales can be a costly business for landlords who think they can operate outside of the law. As well as pursing enforcement measures like fixed penalty notices and through the courts, when appropriate, Rent Smart Wales will apply for rent repayment orders to ensure convicted landlords do not profit from operating illegally.

“All landlords who are still unregistered and unlicensed should ask themselves, can they afford not to comply and take the necessary steps to do so without delay.”

Landlord guilty of 124 offences after failing to obtain a license
A Cardiff landlord with 16 properties, each containing a number of flats, in the city has been given a hefty fine for failing to obtain licences to let and manage those properties with Rent Smart Wales.

Charles Baker of Cyncoed Road, Cyncoed, Cardiff was found guilty in his absence of 124 offences at Cardiff Magistrates' Court - and ordered to pay £20,000 with £741 costs.

Landlords who let and manage their own properties are required under the Housing (Wales) Act 2014 to be registered and licensed with Rent Smart Wales. Magistrates found Mr Baker guilty in his absence of failing to be licensed to carry out lettings activities and failing to be licensed to carry out property management activities on each of his 62 properties in the Roath area of the city.

Cllr Lynda Thorne, Cabinet Member for Housing and Communities at Cardiff Council, the single licensing authority for Rent Smart Wales, said: "Rent Smart Wales was introduced to drive up standards in the private rented sector and to help professionalise the role of a landlord for the benefit of themselves and their tenants. It's quite shocking that a landlord with so many properties in the city has sought to evade compliance.

"However, it really doesn't matter if you are a landlord with 60 properties or just the one because all self-managing landlords must be licensed with Rent Smart Wales to operate legally.

"We are prosecuting landlords for non-compliance across Wales and will continue to do so to root out the minority who are foolish enough to believe the law doesn't apply to them."

Other updates
Rent Smart Wales say that there has been a significant decrease in demand for classroom courses, which was fully expected as the majority of landlords have now applied for their license. Over 35,000 delegates have completed Rent Smart Wales delivered training, either in a classroom environment or online.

High volumes of applications are still being processed, for example, 1008 licence applications were submitted in September 2018. All licenses are being processed within the 8 week deadline (except where an in-depth investigation is required into fitness and propriety).
As of October 2018, 16 licensing decision appeals were lodged with the Residential Property Tribunal (RPT). Four cases were withdrawn and four decisions made to date, three in RSW’s favour and one appeal upheld. One decision is pending.

Agent Audits
Rent Smart Wales say that agent audit processes and procedures have now been finalised following a number of pilot exercises with input from local authorities. The process involves issuing a rating following completion of the audit. There is no requirement to display this at the current time. We will update you on this as we know more. 

If you're new to the industry and an ARLA Propertymark member you may want to download our Rent Smart Wales Fact Sheet to get yourself up to speed.