Justice For Tenants is a non-profit organisation that has provided in-house training and/or mentorship for the following local authorities with regards to Rent Repayment Orders and Civil Penalties/Financial Penalties (accurate as of 15 Feb 2019):
It can be difficult to know how to best take advantage of the new tools to efficiently carry out enforcement action and raise revenue for a Housing Enforcement Team. Justice For Tenants provides the processes, templates, structure, training and work to enable local authority housing and licensing teams to effectively enforce and increase revenue at the same time.
Justice For Tenants helps Trading Standard departments by setting up arrangements where we provide proof of letting agents who:
Trading Standards can then follow government guidance and impose a £5000 fine.
Many rental properties are removed from the PRS stock and social stock due to letting and sub-letting on AirBnB 365-days a year. JFT has proprietary software that identifies these properties and gathers evidence to allow for financial enforcement action to be taken.
The Housing and Planning Act 2016 provided many more tools for local authorities to carry out enforcement. This is especially true if you operate a selective licensing or additional licensing scheme.
The government guidance is clear. These tools should be used to increase the amount of enforcement action again landlords and agents. The revenue gained from Financial Penalties and Rent Repayment Orders go directly to fund the Housing Team.
Both Financial Penalties(FP) and Rent Repayment Orders(RRO) are viewed as more efficient, cost-effective tools than prosecution. This is due to the faster time-frame and the fact that a Housing officer can take the RRO or FP from start to finish, including making representations at the Tribunal.
However, there are very few local authorities who have the resources or processes to truly take advantage of these tools. Justice For Tenants can assist with streamlining or carrying out these processes, increasing the revenue gained via these actions and providing representation in Tribunal.
Every local authority has their own structures and priorities, Justice For Tenants engages the decision-makers to gain an understanding of their vision and aims, and then works with all members of the teams in an inclusive manner to build safe, reliable and efficient processes that deliver financial results that also enable an increase in enforcement action, resulting in improved standards in the rented sector in the local authority, benefitting the residents.
Although Financial Penalties and Rent Repayment Orders have large amounts of overlap, you can find out more information about best practices for each below.
For in-house training, to ask questions or to discuss referral arrangements, please contact Alasdair Mcclenahan – Head of Processes and Outreach at firstname.lastname@example.org
The legislative basis for the RRO application is different for each breach. We have template paragraphs for each kind of breach including differentiating between Mandatory HMO licensing breaches, Additional HMO Licensing breaches and Selective Licensing breaches. If you know what the breach is, the template paragraphs are always sufficient.
The most common issue HEOs bring to us is who is the ‘appropriate person’. This is often because they have experienced RRO applications being thrown out for being brought against the wrong person. This can be especially difficult in Rent-2-Rent arrangements.
From our experiencing assisting dozens of tenants and many local authorities, we have learned that there is a better mindset to take – who can you bring action against? By naming a company, the owner according to Land Registry documents and the director of the company as respondents it achieves multiple good outcomes.
Usually, the director of the company on the tenancy agreement (if applicable) and the Land Registry owner will write to the FTT stating they are not party to the tenancy agreement. This carries many benefits:
The beauty of the Tribunal is that they are flexible and informal compared to court. We write back to the Tribunal stating that:
We also state that the situation is complex enough that we believe it should be dealt with via the evidence bundles and hearing, rather than the RRO application being struck out at this point. It is usually that the Tribunal will agree with this assessment, and we have now tied in 2 extra Respondent’s who have engaged in the process, have assets, and are responsible for the breach.
This usually only requires one email to the FTT and is based off a template that often requires no adjustment.
How to tie the director and owner of the property is explained later on under the heading “Evidence bundle”
Unfortunately, the Tribunal is often very tight with it’s time-frames, this is the downside of the process being quicker than court. It is not realistic to expect a Housing officer, who will have other work including off-site visits, to respond in a timely mannerly when the FTT only gives 4 days to comply with it’s directions. Often JFT will carry out this portion of the work or will advise structuring the team in such a way that one role takes responsibility for oversight of the administrative tasking for the Tribunal. JFT can provide bespoke software specifically built to efficiently automate the task of administering RRO application and Civil Penalties.
There are many situations where conducting pre-hearing correspondence can lead to a successful result. Often this is larger than the amount that one would expect from a hearing and saves on resources.
Mediation has significant benefits for the Respondent (the other party):
Consequently, the Respondent has significant reason for looking to resolve the matter before submitting their Evidence Bundle or paying legal representation to draft their Evidence Bundle.
It is helpful to request mediation via a cover letter very soon after the directions are provided. Within this request to the Respondent and the Tribunal, it is sensible to state that delaying the date of Evidence Bundle submission until after the mediation is fairer for both parties, and will make the mediation more likely to success, as the Respondent will not have spent thousands of pounds in legal fees having the Evidence Bundle drafted. The Tribunal will generally agree with this logic, and it alerts the other party to the costs of the proceedings they may face.
Generally, JFT will send a representative to the Tribunal to represent the tenant or local authority and engage in the mediation process. It generally involves a meeting with the other party and a mediation or a Tribunal judge acting in the role of mediator.
Shortly afterwards, both parties are separated into separate rooms and the mediator shuttles between both parties working towards an agreement.
To date, Justice For Tenants has consistently reached mediated and pre-hearing settlements for amounts larger than would be expected if a hearing were to occur. This is due to the large amount of experience we have with mediation at the Tribunal, as well as experience with the result of RRO applications.
Often the other party doesn’t provide the evidence bundle on time. The day after a bundle was due, our tasking system will pre-emptively load a template email requesting the Tribunal provide directions to clarify that if the Bundle isn’t received by a certain date that the Respondent’s evidence Bundle will not be accepted and the hearing will proceed without any defence from the Respondent. Within this template letter we also request an extension to our Evidence Bundle submission date so we are not prejudiced by the Respondent’s non-compliance with Tribunal directions.
This is automatically tasked for a chase every 4 days. Usually the Tribunal will chase the Respondent once, and after our second chase, will grant us an extension and will provide a hard deadline to the Respondent.
This should consist of 4 elements
Evidence Bundles can seem overwhelming the first dozen times you do them. However, after doing a large number of them, they are very similar. We use a templated layout and adjust this to suit.
It is important to explain what steps were taken to ensure compliance prior to the RRO application in the expanded reasons and to state that the reason for bringing the application is to increase standards in the public sector and that a press release is likely to follow to provide publicity in order to encourage other landlords to be legally compliant.
Here is where you can tie the owner of the property and the company director to the application.
If the director has a string of previous estate agents, or their agency is new and doesn’t have assets, screenshots from Companies house can be taken and used to show that this individual uses letting agency companies to hide behind and if an RRO is awarded against the company there is significant reason to believe he will let the company dissolve and start another company. Explaining that this is thee reason that the provisions of Section 251 of the Housing Act 2004 were granted is very effective to persuading the Tribunal to hold the director of the agency personally liable
It is very rare for the Respondent to provide a copy of a lease agreement between themselves and the company listed on the tenancy agreement.
Stating that the lack of a business agreement being provided shows that there is no business arrangement, therefore the company has only been placed on the Tenancy Agreement, but that doesn’t change who the landlord or appropriate person is. We have case law from other RRO’s that we submit as supporting evidence for this interpretation.
Stating that the company has not provided any proof of any agreement between owner and agency is still an appropriate strategy. If the Respondent provides a tenancy by which the ‘Letting Agent’ has been subletting the property, we quote the definition of ‘Rack Rent’ as provided by Section 263 of the Housing Act 2004 which states that if an individual is receiving 2/3 or more of the market rent for the property then they are the appropriate person. This justification can be used to prevent the Rent-2-Rent loophole, as the owner of the property is receiving more than 2/3 of the market rent (providing a screenshot of similar nearby rental properties on Zoopla is good supporting evidence for this).
If this is not itemised in the Respondent’s evidence bundle, then this must be strongly attacked in the response to defence. State that it is not appropriate to allow the Respondent to make unevidenced claims to reduce the award the Tribunal may make for their breach of the law. This often leads to the Tribunal dismissing these factors.
The HAPA 2016 does not make clear provisions for deducting the running costs of the property (unlike the Housing Act 2004), therefore pointing out that there appears to be no legislative basis to allow these deductions is very sensible.
Please note, JFT will be appealing to the Upper Tribunal to clarify this point and hopefully provide a clear framework for valuation of RRO Application by setting a case precedent, which will be the first precedent made under the HAPA 2016 legislation.
It is important here to point out the Respondent’s lack of evidence. It is rare the respondent will provide the last 3 years of tax returns, pointing this out will help the Tribunal dismiss any claims of poverty. It is also helpful to point out the value of the property now compared to the price paid (accessible by the Land Registry Docs) to show that there is significant assets just in that property and then to compare that to the financial circumstances of the tenant who is in the property. This can help the Tribunal judge realise that someone who owns at least one rental property in a bullish property market cannot reasonably claim poverty by contrasting it with someone who is facing real financial struggles.
This speaks for itself; if you have the correspondence trail and telephone notes which shows the actions your Housing Team have taken you will be able to contrast the Housing/Licensing team’s conduct with that of the landlord and use that as justification for the largest RRO award.
It is helpful to point out that the funds obtained will be fed back to the Housing Team to fund activities to investigate other landlords who are potentially providing unsafe or substandard accommodation or who have engaged in harassment and unlawful eviction against tenants.
At this point, it may be sensible to propose a further WITHOUT PREJUDICE settlement offer (this means it cannot be presented to the Tribunal at the hearing).
It is also useful to request a written determination if mediation is not going to happen, as that can save time and resources as well as allowing you the last word as you responded to the other party’s Evidence Bundle.
Often, due to the current resource situation, housing teams will experiment with a few RROs then stop because:
This is true for the first dozen or so. Once the process is streamlined, they can be dealt with very efficiently and generate large amounts of revenue compared to the resources expended.
Involving Justice For Tenants can help the tenants of the property engage in the process as we can tie the Local Authorities RRO in with the Tenants RRO so both the Local Authority and the Tenant receive compensation, and the Local Authority’s application is bolstered by having evidence and a witness statement from a tenant who can provide proof of the breach.
Bringing an RRO does not affect the Local Authority’s right to pursue a Financial Penalty or prosecution. Some local authorities like to trial RRO’s by asking JFT to run a pilot of these on the Local Authority’s behalf, with a success fee being granted for monies recovered. This can allow a Local Authority to try RROs without any financial risk, and once they are seen to be generating revenue, either a longer-term arrangement is worked out, or JFT can provide the systems, processes and expertise to allow the Local Authority to continue to use RROs to carry out enforcement action, ensure properties get licensed and generate income for the Housing Team.
There is a serious problem with letting agents who:
Justice For Tenant’s proprietary software pulls data from:
To identify letting agents operating within a local authority.
It then cross-references the information it obtains with companies house and the redress schemes to identify any potential breaches of interest to Trading Standards. A timestamped snapshot of every page of the agent’s website is gathered to provide proof that fees are not being displayed appropriately.
If you want to have a chat about this, or have any questions, please email: Alasdair Mcclenahan – Head of Processes and Outreach at email@example.com
There are many properties which are taken out of the PRS stock and social housing stock in a local authority as a result of being let or sub-let on AirBnB year-round.
AirBnB has imposed a 90-day limit on their site, unfortunately this has had the effect of professionalising this strategy, as landlords will often rent the property to a “tenant” who will then sublet on AirBnB year-round, returning above-market rent to the landlord, or they give it to one of the professional AirBnB management agencies.
The data shows it is very simple. List the property on one account for 90 days. WWhen the 90 day cap is reached, list it on a 2nd account, with a slightly different address and the photos flipped, or edited to contain an invisible border. It is unclear whether AIrBnB is aware of this and turns a blind eye, or it simply bypasses their automatic detection. More than 50% of all nights spent in an AirBnB property in London are in properties that are let year-round.
It takes a while, but through constant monitoring and data-gathering, we can prove that the same property is rented year-round. This can lead to enforcement action and fines that recoup monies for the local authority.