Working Together Landlords and Local Authorities

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Working TogetherLandlords and Local Authorities

• Dave Offord NLA
• Michele Glazebrook Glazebrook Associates
• 12 November2009

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Todays Aim

• Use our shared experiences to explore ways Local
  Authorities and landlords can work together
  successfully in order to-
• Promote a thriving and competitive PRS with
  rising standards which operates effectively
  within a balance overall housing market.

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But first - A disclaimer!

• There follows some scenarios of Landlord/EHP
  interaction All are based on actual events but
  names have been altered to prevent any
  embarrassment (or litigation)!!
• Landlords Views are not those of the NLA but are
  stated here to elicit debate

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Licence or be damned Scenario

• Mr Magnum bought a Victorian house of 5 s/c flats
  in 1987
• 2003 extensive improvement works with EH grant
• Registration as HMO under local scheme expires in
  2008
• New licence sought by LA landlord says not HMO
  under new definition as meets 1991 BR standards.
• LA disagree and Landlord supplies report by
  approved inspector, LA still disagree LA
  concerns rebuffed by further report.
• LA threaten prosecution refuse requests to meet

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The Landlords view

• Why dont they spend their time chasing the
  rogues?
• Is this personal?
• Do they just want me to pay a fee?
• Are they covering up for something because I can
  already see a few mistakes they have made?
• Is it fair that I should risk my good name with a
  criminal prosecution?
• Is this really for the public good? Its causing
  my wife and I great anxiety
• Ill get my own back and the extra money its
  cost me!

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Improve and go bust scenario

• Mr Barnaby has a listed 4-storey property with 5
  self-contained flats in use in this format for
  10 years. Four of the flats are small flatlets
  below the stated LA space standards.
• There is disrepair, single glazing old
  electrical heating and Mr Barnaby wishes to carry
  out necessary repairs and upgrade existing
  flatlets or convert to larger self-contained
  flats, combining two on each floor.
• EHP option (to meet HMO standards) is to make the
  property a licensable HMO removing ensuite
  bathrooms and kitchen areas and one flatlet, to
  use as a shared kitchen/bathroom.
• Property value is estimated 850k. Revaluation
  based on the EHO Improvement notice schedule was
  350k. Income will be reduced by virtue of losing
  flatlet and renting the remaining units as
  shared, not self contained.
• Planning Department also object to loss of any
  more than 1 unit of accommodation regardless of
  quality or suitability.

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The Landlords View

• Well theyre just trying to put me out of
  business.
• I cant take the correct commercial decisions to
  get the best out of my property and am being
  asked to spend an awful lot of money that I
  essentially may never see a return on

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How to make friends and influence people scenario

• I understand you are the owner of the above
  property which appears to be empty and I require
  you to inform me of your proposals for its future
  use within 7 days of the date of this letter. If
  I do not receive a response, the Council may
  instigate Compulsory Purchase proceedings in
  order to ensure that the property is brought back
  into full use.

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The Landlords View

• What the xxxxxxx!!.
• I havent a clue what this is about this is my
  house Ill deal with this later when Ive done
  some research.Theyve not addressed this to my
  Company name and the property is company owned,
  maybe Ill write back and tell them Im not the
  owner, then wait and see

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Am I Coming or Going Scenario

• Morse and Co own a portfolio of properties in 3
  different areas
• Authority A asks for single bedrooms to be in
  excess of 8.4sqm but neighbouring authority B
  happy with 6.5sqm
• Authority B states that where bedrooms smaller
  than 8sqm then communal space must be
  exponentially larger (17sqm for 6 residents) but
  Authority C is not concerned about communal space
  provided rooms minimum 6.5sqm
• Authority C allows conservatories as additional
  communal space but Authority B refuses

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Landlords View

• Well they cant all be right so they must all be
  wrong so why should I listen to any of them.
  Were a good landlord providing a good level of
  accommodation to discerning tenants If the
  tenant is happy why cant the LA by happy??
  Horses for courses?

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Lets all make some money

• Reagan Property Ltd has a large portfolio of
  licensable HMO properties across a number of
  local authority areas. All licensed (or applied
  for) under a managing agent who unfortunately
  goes into liquidation at the beginning of the
  recession and less than a year into the licensing
  process.
• A new managing agent is appointed and proper
  processes followed to inform tenants and LAs.
• All the properties require re-licensing because
  of the change of manager.
• Every LA involved asks for different process in
  the re-licensing of the properties and some
  insist on full application fee again despite the
  fact that nothing has changed other than the name
  of the applicant!

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Landlords View

• Where an application has to be remade for
  whatever (legitimate) reason I am perfectly happy
  to cover the costs involved in administration but
  when the local authority is acting like a profit
  making bank applying charges way beyond the
  reasonable who can I complain to?!!
• I have paid for licensing and paid a consultant
  to assist me to make sure it was done correctly
  and now were being asked to pay all over again
  FOR CHANGING ONE NAME!

14
Ever Increasing Standards Scenario

• Mr Wallander owns two properties side by side,
  identical in layout. The first one has been
  licensed for 2 years with full inspection by Fire
  officer and is fully compliant to standards.
• When he purchases the second he completes it to
  same standard as first and applies for licence
  before occupation.
• Fire officer/EHP inspection highlights (verbally)
  additional fire precautions beyond what was in
  neighbouring property, so Mr Wallander quickly
  does the additional works to allow letting.
• Some months later he receives a letter from the
  council requiring yet MORE fire precautions.

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Landlords View

• So in the space of two years I have been
  presented with three standards of fire
  precautions and spent considerable sums of money
  on my new property.
• No doubt in a short period of time there will be
  more new standards .. .. Why are the standards
  required always being changed. And why am I not
  being informed of these changes in a timely
  fashion so that I can plan works and plan
  investment

16
Science of Risk Assessment scenario

• Mr Taggart has a 4 storey property with small
  (but adequate) bedsits with good quality single
  glazed wooden windows and electric convector
  heating.
• Council wants gas central heating and double
  glazing. No complaints, no consultation with
  tenants nor evidence of excess cold being a
  problem are presented as additional evidence.
• Costs for improvements are in excess of 35k
• Council refuse to consider Domestic Energy
  assessment which provides evidence that modified
  electric heating (i.e. modern storage heating)
  more than suitable to achieve reasonable heating
  (along with draught excluder to windows)

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Landlords view

• None of my tenants have complained about being
  cold. Gas central heating will mean increased
  maintenance bills, some system of charging each
  tenant fairly for the gas they use, and Ill have
  to increase the rent if I am to get any return of
  the capital investment of windows and central
  heating system. I am more than happy to install
  electric storage heaters which Dimplex have
  surveyed for and confirmed will be effective..

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Catch 22 Cant License, Cant change

• Bergerac Estates own a 5 bedsit, licensable HMO.
  
• LA states two rooms are too small under their
  space standards.
• Bergerac propose conversion into 3 self contained
  flats making all rooms larger and in compliance
  with standards, and thus not requiring licensing,
  but this is not supported by the EHP - They
  insist on need for licence for the remaining 3
  rooms as it is possible that 2 of them could be
  doubles

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Landlords View

• Why cant environmental health work with me to
  persuade planners that my idea is a good one for
  the property and the neighbourhood and for my
  business?
• Why cant we work together for a sensible
  outcome?

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Knowledge, Skills and Experience

• Wider Knowledge of PRS
• Communication Skills
• Diversity of PRS markets and landlord types
• Not just procedures but softer skills and
  knowledge

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Process Obsessed

• One size fits all or proportionality?
• Risk Assessment - HHSRS
• - Licensing
• - Priorities
• Taking Responsibility/risk averse
• Simplistic targets outcomes not outputs

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Trust and Credibility

• Baggage Stereotypes old/new
• 1 million landlords 97 ok but we can always
  improve our knowledge and skills
• Stop and think - Use the most effective solutions
  (balance effort against out come)
• Everyone has competing priorities
• Set a good example

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What have we discovered?

• Dont treat everyone the same horses for
  courses
• Analyse the problem effectively dont jump to
  conclusions
• Always reward good behavior, target the bad but
  consider redemption strategies
• Take the average and better landlord off the
  battlefield with broader policies and tactics