Landlord registration - review of applications and fees: consultation analysis

Part 2 – Landlord registration application fees

Application fees

78. The consultation paper noted that when landlord registration was introduced in 2006, the Scottish Ministers used powers under section 83(3) to set national fees, with the aim of simplifying the fee structure and creating consistency across Scotland. For most landlords, the application fee consists of a principal fee of £55 and a property fee of £11 for each property being let. Registration lasts for three years, unless it is revoked.

79. The consultation proposed that registration fees should be uprated by inflation (CPI) from the period between 2006 and 2016, as a measure of the overall changes in the public sector pay of local authority staff. Over this period, CPI has increased by a total of 26%. Uprating the principal, property and additional fees by CPI would result in revised fees of approximately £70, £14 and £139 respectively. Question 6 asked:

Q6: Do you think it is reasonable to increase registration fees in line with inflation, to reflect the increased cost to local authorities?

Table 8: Question 6

	Yes	No	Don't know	No reply	Total
Housing Association	7	1	-	-	8
Local Authority	28	2	-	-	30
Lettings / residential lettings / property management	6	15	1	1	23
Professional organisation	2	-	-	2	4
Representative organisation	3	2	-	-	5
Safety / risk	1	-	-	3	4
Tenants' interests / tenants / Residents group	3	-	-	-	3
Other (e.g. charities / health / professional organisations / manufacturer)	2	1	-	-	3
Individuals	35	53	7	-	95
Self-identified landlords	12	45	6	1	64
Total	99	119	14	7	239

80. As Table 8 demonstrates, a greater number of respondents disagreed (119) with this proposal than agreed (99). Although there was a degree of agreement across all organisation sub-groups, the highest levels of agreement came from respondents within the local authority sub-group. High proportions of organisations in the lettings / residential lettings / property management sector, self-identified landlords and individuals disagreed.

81. Respondents were invited to explain their answer and 191 took the opportunity to comment. A minority reiterated their support for the proposition. Their reasons included responses along the lines that the requirements of local authorities to carry out checks and enforcement have increased and current fee levels do not reflect the costs associated with administering the service, or that the proposal is a reasonable and fair reflection of the current costs to local authorities.

82. However, a number of comments, each made by a smaller proportion of respondents included that the current fee is fair and sufficient, that fees are already high enough and should not be increased or that there is no justification for the proposed increase. Other comments also mentioned that costs for private landlords are already high, that there is now less viability in being a landlord or that the registration service offers no benefit to landlords.

83. Other comments, each made by a small proportion of respondents included the need to keep any increase in line with inflation only, or that any increase at the proposed level should be phased in over a period of time.

84. A number of comments, each made by a small proportion of respondents referred to the online system currently used; comments included that the current system is not fit for purpose, the need for a sensible online system to be introduced or a need to match increased costs with an increased value in the service.

85. There were also a number of comments made about the likely impact this proposal will have on landlords. These included the potential for rents to increase alongside the proposed increase in registration fees, or that this is just other tax upon landlords.

86. A range of other comments, each made by a small proportion of respondents referred to local authorities, with comments such as a need for them to become more streamlined and efficient and less bureaucratic. A very small proportion of respondents also asked for transparency over how costs are incurred by local authorities or proof of the need to increase registration fees.

87. A small proportion of respondents also noted the need for a Scotland-wide registration system rather than having registers administered by every local authority. There were also a small number of requests for support and training to be provided to landlords.

88. Other comments, each made by a very small proportion of respondents, included:

• There should not be a registration fee.
• References to the cost of a Disclosure Scotland fee or background checks on tenants, both of which are at a level of only £25.
• Suggestions that the Scottish Government should pay for the system.
• Regulated tenancies do not allow for rent increases.
• The revenue generated should be used for enforcement.
• There is a need to police the current system.
• Fees should be proportionate to the number of properties owned by an individual landlord.
• This will result in fewer properties being available for rent or will discourage landlords from providing reasonably priced housing which is a benefit from which local authorities gain.
• This will lead to more landlords deregistering / more rogue landlords.
• There is a need to consider the Retail Price Index (RPI) instead of CPI. This is what is used by local authorities to calculate increases in other licensing fees etc. (cited by respondents at stakeholder events).

89. A professional organisation noted a number of issues in relation to this proposal, including the importance of monitoring costs in the future and the potential for further reviews of fees, as well as the need to carry out enforcement activities:

"It is important to ensure that any fees being charged to landlords are proportionate and that local authorities are working as efficiently as possible to keep costs down to ensure that tenants are not penalised with higher rents. Bearing this in mind, we do think that after 12 years of operation, it is reasonable to consider increasing fees to support local authorities to process applications …. It also states that due to variation in practice across local authorities, it is difficult to gather precise information on the costs of managing the registration process. We recommend better monitoring of costs going forward and a further review of fees if necessary to ensure that they are reflective of actual costs which could be higher or lower than those proposed in this consultation."

Additional fee

90. The consultation paper explained that current legislation requires an additional fee of £110 to be paid when a landlord applies, or reapplies to be registered, but only after the local authority has made two separate requests for an application to be made. While the fee represents the increased work that local authorities have to undertake in order to help non-compliant landlords to meet the requirements of registration, the amount of work required varies. As such, the single rate additional fee currently charged may not always reflect the amount of work undertaken by the local authority to secure an application for registration. The Scottish Government is proposing the drafting of regulations so that the additional fee is set as a maximum amount, which would enable a local authority to vary or waive the fee according to the additional work undertaken.

Q7: Do you think it is reasonable for local authorities to charge a lower additional fee, in cases where the maximum set fee exceeds the costs of the work undertaken to prompt a landlord to make an application?

Table 9: Question 7

	Yes	No	Don't know	No reply	Total
Housing Association	6	2	-	-	8
Local Authority	3	24	2	1	30
Lettings / residential lettings / property management	11	7	3	2	23
Professional organisation	1	-	1	2	4
Representative organisation	5	-	-	-	5
Safety / risk	1	-	-	3	4
Tenants' interests / tenants / Residents group	2	-	-	1	3
Other (e.g. charities / health / professional organisations / manufacturer)	-	3	-	-	3
Individuals	45	32	16	2	95
Self-identified landlords	30	23	9	2	64
Total	104	91	31	13	239

91. As shown in Table 9, while a majority of respondents (104), across all sub-groups, were supportive of this proposal, 91 did not agree that local authorities could charge a lower additional fee, in cases where the maximum set fee exceeds the costs of the work undertaken to prompt a landlord to make an application. Highest levels of disagreement came from local authorities. Views were relatively split among self-identified landlords.

92. A total of 157 respondents provided additional commentary in support of their response to this question; and the key theme, albeit cited by a small proportion of respondents was support for the proposal. A similar proportion also commented that the costs charged to landlords should reflect the cost of the work undertaken by a local authority. That said, a very small proportion noted that any extra fee should be clarified so that these charges are transparent and can demonstrate the level of work undertaken by a local authority.

93. A small proportion of respondents suggested a fixed fee for applications, with one standard national fee applied for late applications, with some comments that this proposal would introduce too much inconsistency across Scotland.

94. A small proportion of respondents felt the current fee is acceptable and should remain as this.

95. A very small proportion commented that whatever fee is charged, a local authority should be able to apply discretion in unusual circumstances, for example, if a landlord has been in hospital or if there are other genuine reasons for failure of communication.

96. A number of the local authorities commented that this would be difficult to plan and administratively complex to manage.

97. Other points raised, each by very small numbers of respondents, included:

• This allows for flexibility within the system.
• This allows for landlords to be treated fairly if they have made a simple error which has been quickly rectified.
• This will encourage registration, although a similar proportion felt this would discourage registration and non-compliance.
• There should be a major increase in the penalty for non-registration.
• Generating an automated email should not mean additional work for local authorities.
• There should be no fees charged for landlord registration.

98. Some comments, each made by a very small proportion of respondents, referred to the role of local authorities within this process. These included a suggestion that local authorities should have a duty to remind landlords, with excess charges only applied on refusal to re-register; that local authorities need more power to deal with landlords who fail to comply with registration; or that local authorities need to undertake enforcement.

99. Some comments were made, each by a very small proportion of respondents in relation to the registration process itself. These included a need to improve the renewal process, preferences for the online application to be national across Scotland, and provision of a streamlined and fully automatic online system.

Landlord registration fee discounts

100. The consultation paper noted that there are a number of discounts that may apply to landlords, although the way in which they are calculated can be complex, difficult to apply and do not always reflect the work that local authorities do to process applications. The consultation sought views on whether some of the discounts should be discontinued.

Q8: Do you think that the 10% discount applied to online applications should be changed? If so, what should be changed?

Table 10: Question 8

	Yes	No	Don't know	No reply	Total
Housing Association	3	4	1	-	8
Local Authority	19	9	1	1	30
Lettings / residential lettings / property management	3	17	2	1	23
Professional organisation	-	-	2	2	4
Representative organisation	1	3	1	-	5
Safety / risk	1	-	-	3	4
Tenants' interests / tenants / Residents group	1	1	-	1	3
Other (e.g. charities / health / professional organisations / manufacturer)	-	2	1	-	3
Individuals	33	53	8	1	95
Self-identified landlords	17	41	4	2	64
Total	78	130	20	11	239

101. As Table 10 shows, a majority of respondents disagreed (130) with the proposal to change the 10% discount applied to online applications, although a large minority agreed with this (78). The highest levels of agreement came from local authorities; the lowest levels from organisations in the lettings / residential lettings / property management sector. A higher number of self-identified landlords disagreed with this proposal than agreed.

102. A total of 151 respondents provided additional commentary to this question. The key theme cited by respondents related to issues with the current online application system which is perceived to be in need of improvement, to be more user-friendly, and for guidance and /or information on how to use the system and / or support from local authorities to be provided to landlords. An organisation in the lettings / residential lettings / property management sub-group commented on how the current system is not user-friendly:

"The discount should represent the cost saving to the council. Applying online is only problematic as the system is not user friendly. Most of the landlords we represent are happy to use the online system however the system is too complicated to navigate. Complex circumstances are the exception and are rare in our experience. Consider allowing the agent to complete the registration on behalf of the landlord."

103. The other key theme, albeit only cited by a minority of respondents was a preference to retain the online discount as it currently exists, to reflect the savings that this approach offers over manual registration applications. A slightly smaller proportion also noted an online approach saves local authorities money as it is cheaper to manage and that the discount should be retained, or that a discount encourages landlords to use the online application system.

104. That said, a small proportion of respondents noted that the majority of landlords now complete their registration online, and felt that a discount is no longer needed; and smaller proportions simply noted the 10% was no longer needed and should be removed; or that the online discount should be removed as it is unfair to those landlords who do not have online access.

105. Conversely, there were also suggestions from a small number of respondents that an increased fee should be charged for offline applications or in situations where local authority staff assistance is needed to complete an application; and a slightly smaller proportion queried whether there should be a dual rate application system, with higher fees charged for offline.

106. A small number of respondents felt the online discount should be increased, and suggestions varied from an increase of more than 10% to 100%, although the most frequently cited level was 20%. While one respondent suggested an increase of more than 10%, other respondents cited specific amounts such as 20% or 25%.

Landlord Registration online system

Recovery of support costs

107. The consultation paper proposed to include an amount within the principal fee as a reasonable contribution to the core running costs of the online system. Based on the number of landlords who applied to be registered in 2016 and 2017, and who paid a principal fee, the additional cost per application would be no more than £2.00 over a three year registration period. This figure might be reduced, depending on whether other proposals in the consultation relating to fee discounts are taken forward.

Q9: What are your views on including an amount in the application fee to cover the operating costs of the online registration?

108. A total of 208 respondents gave comments in response to this question.

109. A majority of respondents broadly disagreed with the proposal to include an amount in the application fee to cover operating costs of the online service. A smaller proportion gave comments agreeing with the proposal.

110. A minority of those respondents who commented, stated that additional charges or fees should not be necessary or that the current registration fee should be enough. Smaller numbers noted that all operating costs should be included in the registration fee, with the suggestion that this would reduce complications.

111. A small proportion commented that as the registration service was a government requirement or initiative, it should be left to the government, local authority or public purse to pay for it. Others, and in particular landlords, pointed out that landlords should not have to pay for a system regarded as bureaucratic and perceived to hold no benefits for them.

112. A minority of respondents, and landlords in particular, noted that it did not make sense for there to be a need to pay extra operating costs for an online system, and cited that online efficiencies should reduce the need for any additional costs. Smaller numbers said the proposal was counterintuitive to offering a discount for online registration or that online registration should remain discounted, or pointed out that no additional fee was payable for online registration in the past.

113. Smaller numbers of comments focused on the negative impacts on landlords and the private rented sector as follows:

• Higher costs will discourage landlords from registering or generally being compliant.
• Landlords already have to cope with increased financial burdens (e.g. costs, fees, taxes).

• Landlords are likely to pass on extra costs to tenants in the form of rent increases.
• Landlords may end up selling their properties leading to a possible decrease in available accommodation.

114. Other negative comments or alternative suggestions relating to the proposal included the following:

• General comments about the additional cost being unjustified.
• Alternative suggestions that charging should be based on the number of times that individuals use the system.
• Alternative suggestions that the system should be managed nationally or that there should be one central landlord authority to reduce administration and gain from economies of scale.
• Lack of clarity around how the Scottish Government receives payment (e.g. questions around whether local authorities are invoiced).
• Suggestions that better enforcement procedures regarding rogue landlords would be a more effective way of raising money.

115. A minority of respondents raised concerns about the proposed registration system itself or highlighted problems with the current online system, and commented that it needs to be fit for purpose. Specific points made included:

• Suggestions for improvements to functionality, including: a review list, auto approval of renewals to prevent duplicate accounts by customers, the ability to add rent penalty notices, an improved search function, and the ability to bulk upload property-related data.
• Perceptions of improvements needed to, or problems pinpointed with, the current online system, including: lack of user-friendliness, the system being time consuming, an inability to find landlord numbers on the system, frustrations with the one-time logon process, poor search functionality, the database being inaccurate or incomplete, and email alert problems with joint holders. As an organisation in the lettings / residential lettings / property management sector commented,

"The inclusion of a separate monetary element in the registration fee to cover the operating costs of the on line service is not currently justified or reasonable. The current data base system is not particularly user friendly, and the accuracy and extent of the stored registration data are extremely questionable. There are significant gaps in the directory of registration information. For example, a public search of certain rental properties will disclose a negative result for landlord/agency details. Database users and stakeholders are then obliged to make time consuming enquiries with local authority employees to elicit the necessary information."

116. Among the respondents whose comments showed general approval of the proposal, some stated that it was reasonable to recover costs incurred in administering the registration service, or that operating costs should be met by landlords or service users without public subsidy.

117. A minority of respondents perceived the proposed extra cost of £2 every 3 years as being reasonable or minimal.

118. Some respondents regarded the proposal positively as long as the fee only added up to the cost of delivery, with others being in favour as long as fees did not escalate from the stated amount.

Joint owner discount

119. Where a property is jointly owned, the law requires that all the joint owners must apply to be registered and the current regulations allow for one of the joint owners to be nominated as the lead owner, who is required to pay the principal application fee whilst other joint owners receive a 100% discount. However, where a joint owner applies to be registered, the local authority must assess whether the person is fit and proper and the local authority does not receive any income towards the cost of conducting this assessment.

Q10: Do you think that a local authority should receive an application fee when they carry out a fit and proper person test on a joint owner?

Table 11: Question 10

	Yes	No	Don't know	No reply	Total
Housing Association	4	2	1	1	8
Local Authority	19	8	3	-	30
Lettings / residential lettings / property management	9	12	1	1	23
Professional organisation	1	-	1	2	4
Representative organisation	1	2	1	1	5
Safety / risk	1	-	-	3	4
Tenants' interests / tenants / Residents group	3	-	-	-	3
Other (e.g. charities / health / professional organisations / manufacturer)	2	1	-	-	3
Individuals	32	48	15	-	95
Self-identified landlords	12	44	6	2	64
Total	84	117	28	10	239

120. Table 11 shows that 117 respondents disagreed with the proposal for a local authority to receive an application fee when they carry out a fit and proper person test on a joint owner, whilst 84 respondents agreed. The highest levels of agreement with this proposal came from local authorities. Self-defined landlords and individuals showed the highest levels of disagreement.

121. Respondents were invited to explain their answer and 154 took the opportunity to comment.

122. The key theme raised by a minority of respondents, was that if the full joint owner discount is not offered, then many joint owners will not be declared to the local authority. As noted by a local authority, this would have a knock-on disadvantage of losing information that is valuable to local authorities. A representative organisation commented,

"This could lead to applicants only listing one owner where there is actually a joint owner. It is important the information is accurate and only one fee per property should be charged."

123. A wide range of other points were raised, each by a small proportion of respondents. Those in support of this proposal noted that the process undertaken is the same for both owners and so an additional fee for joint owners is justified, that all joint owners should be checked and therefore pay the fee or that an additional fee would simply cover the costs incurred by local authorities.

124. A number of other comments were made, each by a small proportion of respondents; these included suggestions that the fee could be discounted or slightly reduced for joint owners or that the fee should be a modest one. One local authority commented on the need to strike a balance between the information required and the need to simplify the process,

"[An] Indication of how many landlords would be affected would be required before an opinion can be formed. There is a balance to be struck around encouraging maximum disclosure to allow accurate checking and recording versus simplification of process."

125. A small proportion of respondents simply reiterated their disagreement with this proposal and commented that this is not justified or that the fee is already sufficiently priced to cover the costs of assessing joint owners.

126. A similar proportion of respondents pointed out that if joint owners are married (and this is assumed to be the case in many instances), there will be no need for an additional assessment as it is likely that only one of these couples will actively be responsible for managing their property. A slightly smaller proportion also felt that if the nominated lead owner is assessed as fit and proper, there should be no need to conduct assessments on other joint owners.

127. Once again, there were a very small number of references, primarily from local authorities, that this would increase administration of the service and further complicate the process.

128. Other comments made, each by a very small proportion of respondents included:

• The fee should reflect costs but this should not be doubled in price.
• Removing the discount will help to simplify the process and remove the confusion of lead owner.
• This will just create more work and increased bureaucracy.
• There would be hardly any additional work to be carried out.
• This is an attempt at revenue generation.
• The additional cost of conducting assessments of joint owners should be covered by greater fines and penalties on landlords who do not comply with legislation.
• Joint owners should not be charged for a function that is a statutory duty.

Multiple area discount

129. The consultation paper noted that there is a central online system for making applications and searching for information about a landlord or property, and that each local authority is responsible for preparing and maintaining their own register of private landlords. Applicants applying to more than one local authority receive a 50% discount on each online application made to multiple authorities at the same time.

Q11: Do you think that each local authority should receive an application fee when a person applies to more than one local authority, and the fit and proper person assessment is required?

Table 12: Question 11

	Yes	No	Don't know	No reply	Total
Housing Association	3	4	1	-	8
Local Authority	24	3	3	-	30
Lettings / residential lettings / property management	3	14	5	1	23
Professional organisation	-	2	-	2	4
Representative organisation	-	4	-	1	5
Safety / risk	1	-	-	3	4
Tenants' interests / tenants / Residents group	2	-	1	-	3
Other (e.g. charities / health / professional organisations / manufacturer)	2	-	1	-	3
Individuals	28	51	15	1	95
Self-identified landlords	12	43	7	2	64
Total	75	121	33	10	239

130. Table 12 shows that 75 respondents (including four in five local authorities) agreed that each local authority should receive the full application fee when a person applies to more than one local authority, and the fit and proper person assessment is required; however 121 respondents, including a majority of landlords, disagreed.

131. Respondents were invited to explain their answer and 156 commented further.

132. A key theme, from a large minority of respondents was that local authorities should be able to share their information or should not have to duplicate work, thereby enabling one fit and proper assessment to be sufficient. Some of these respondents added that this would result in cost savings.

133. A minority of respondents were in favour of there being one co-ordinating landlord licensing authority, which would enable there to be only one registration or fit and proper test necessary. Additionally, a small number of respondents were in favour of standardising rules for checks or applying rules consistently across the country.

134. Other negative comments or alternative suggestions to the proposal were noted by small numbers of respondents as follows:

• The proposal was seen as unfair, unnecessary or just an excuse to raise extra revenue for local authorities.
• There should only be a small fee for each local authority (e.g. to cover the costs of sharing information or checking legislation).
• There should be no fee or the fee should be covered by the Scottish Government (as it is their scheme).
• The discount should be retained.
• Various negative effects on landlords associated with rising costs were specified, including driving landlords out of the market, discouraging investment, putting tenants at risk or dis-incentivising landlords to register. A tiny number of respondents noted that there was a particular disadvantage to multiple area landlords who offer low rents or affordable housing.

135. It was noted by a few respondents that letting agents (accounting for many multiple area landlords) will no longer be on the landlord registration system, with associated negative impacts on the amount of fees raised.

136. A minority of respondents made favourable comments about the proposal. The main theme, across all sub-groups, but notably by a majority of local authorities, was that of local authorities being required to do their own landlord or fit and proper person checks with the associated administration work incurred. A few respondents commented that local authorities have their own remit and processes with differing circumstances.

"While it may seem unfair to ask landlords to pay fees in many different areas for what seems to them as the same or similar checks, each authority will have different processes and may prefer to carry out their own checks to satisfy their own criteria so as not to rely on another authority who perhaps, for example, doesn't carry out Police Scotland checks." (Local Authority)

137. A minority of respondents noted their agreement with the full fee being payable for each local authority. Small numbers supported the removal of the multi area discount; others felt that local authorities need to cover the costs of checks, investigations or processing.

138. A small number of respondents envisaged only minimal effects on most landlords as the majority operate in only one local authority, while several commented that landlords operating in multiple local authorities can afford the full fee as they tend to be professional landlords or businesses. Similar numbers stated that it was the landlord's choice to have property in more than one area so they should expect to pay the full fee. A comment from a stakeholder event was that the biggest impact would be on Registered Social Landords (RSLs) as they will have to register with the Scottish Government and then subsidiaries will have to register with the local authority, with a request for an exemption to apply for subsidiaries of RSLs.

Agent fee discount

139. As noted in the consultation paper, if a landlord uses an agent to act on their behalf in relation to letting houses, use of that agent must be notified to the relevant local authority. Landlords receive a 100% discount on the application fee where an agent is already registered in, or has applied to the same local authority as the landlord, or where an agent operating as a business is registered with the Scottish Government. However, there is no corresponding discount for a letting agent who has applied to the SG to be registered.

Q12: Do you think that landlords should receive a 100% discount on the application fee for a letting agent who has applied to be registered with the Scottish Government?

Table 13: Question 12

	Yes	No	Don't know	No reply	Total
Housing Association	5	1	2	-	8
Local Authority	18	6	5	1	30
Lettings / residential lettings / property management	15	2	5	1	23
Professional organisation	2	-	-	2	4
Representative organisation	4	1	-	-	5
Safety / risk	-	-	1	3	4
Tenants' interests / tenants / Residents group	1	-	1	1	3
Other (e.g. charities / health / professional organisations / manufacturer)	1	2	-	-	3
Individuals	54	20	21	-	95
Self-identified landlords	41	8	13	2	64
Total	141	40	48	10	239

140. Table 13 shows that 141 respondents agreed with the proposal, while 40 disagreed. Among self-identified landlords a large majority were supportive of this proposal.

141. A total of 126 respondents made comments at this question to explain their answer.

142. Respondents gave a diverse range of answers, though the majority of comments viewed the discount proposal positively. Reasons given by numbers of respondents for viewing the proposal positively included:

• The discount would be applied consistently or equitably, in that, for example, it would be unfair to charge a landlord for an agent registered with the Scottish Government rather than a local authority.
• Landlords would be encouraged to use registered and trained agents.
• The discount would encourage better landlord compliance in terms of, for example, property management standards, good practice, landlords registering and encouraging landlords to provide details of agents used.
• Landlords are already paying agents anyway.
• Landlords should not have to pay fees as well as agents; and other comments disagreeing with double charging, in particular where individuals or organisations may be classified as both agents and landlords.

143. As a representative organisation explained,

"The requirements for agents to be admitted to the Scottish Government register include a fit and proper person test along with other stringent requirements so there should be no further assessment of the agent requiring to be done by local authorities for the landlord registration system. Landlords should be encouraged to use a professional registered letting agent if they don't feel able to manage the property themselves. If a discount is not given this will act as a disincentive in penalising landlords who choose to use agents".

144. A range of reservations about the proposal were given, each by only small numbers of respondents:

• Concerns about the reduction in revenue, specifically affecting the money available for landlord system administration.
• Concerns about landlords 'gaming' the system in the sense they may discontinue using an agent after registering or pretend to have an agent for registration purposes, effectively resulting in free registration.
• Concerns about agents having to pay landlord registration fees.
• Concerns about landlords dissenting from their responsibilities, for example in terms of still having responsibility for choosing a good agent or needing to liaise with an agent for property repairs.
• Full fees should still be payable because landlords using agents should still require fit and proper person tests.
• Concerns over letting agents being favoured over small landlords.
• Concerns about differing types of agents, for instance between those offering full property management and those obtaining tenants only.
• Concerns about whether the discount should depend on whether an agent has been granted registration with the Scottish Government (discount should come into force) or merely applied for registration (fee should remain).

145. A minority of those who commented noted that letting agents will soon have their own register and will not be required to register on the landlord registration system. A few respondents stated the effects of this would be that they would not be liable for a fee so a discount would be inappropriate, and that agents would not require fit and proper checks carried out by local authorities.

146. A very few respondents advocated full linkage of the registration systems.

Change of circumstance

147. The consultation paper noted that a person who is registered with a local authority has a duty to notify any change to information provided in their application. Some of these changes can be made via the online system at no cost. However, there are some changes in circumstance which may require a local authority to carry out scrutiny to ensure that the requirements of registration are still met.

Q13: What are your views on charging a fee for specific changes in circumstance to an existing registration?

148. A total of 209 respondents took the opportunity to give their views, with a large majority expressing negative opinions about the proposal.

149. A minority of respondents noted general comments that there should be no (additional) charges for specific changes in circumstance. The dominant theme, noted by a small proportion (although notably a majority of the local authorities sub-group) was that charging would deter landlords from updating changes for example, many landlords currently do not volunteer changes until the 3 year renewal, landlords need encouragement to make notification of changes or that there would be knock on effects in the form of increased enforcement costs to local authorities.

"Fees should not be applied for a change of details. If a fee were to be applied, it may result in a reluctance on behalf of the landlord to submit changes. If the changes relate to addresses or other contact details, it makes contact with the landlord problematic and the renewal process much more difficult as there is not the correct address to send the reminders." (Local Authority)

150. A small proportion mentioned that as changes are made online there should not be any costs and therefore no need to charge. A few of these respondents added the proviso that this would be the case assuming the online system worked efficiently.

151. Other negative factors, each expressed by a very small number of respondents included:

• It would make the fee structure or charging system more complicated.
• Perceptions that the proposal is simply a money making scheme for councils.
• The current level of registration fee should cover all the costs of changes.
• Notification of changes is a legal requirement and there should be no associated charges.

152. A small proportion of respondents expressed generally positive views about the proposal, for example, that it is justified or reasonable. A small minority agreed that local authorities need to cover their costs or that charging a fee is acceptable as long as the charges relate only to covering costs.

153. A sizeable number of respondents cited provisos about the proposal, in particular regarding which types of changes should incur charges and which should not.

154. A small proportion of respondents thought that the charge was justified if the change in circumstance was non-routine (for example if fit and proper checks or extra verification of details were needed). Other suggested non-routine changes which would justify charges were: issue of a House in Multiple Occupation (HMO) licence, convictions, Anti-Social Behaviour Orders (ASBOs), decisions relating to repairing standard enforcement orders, legal action against a landlord, refused or revoked licences, failure to comply notices and immigration status.

155. Smaller numbers of respondents recommended changes for which they saw no need for charges as follows: change of landlord's or agent's address, email, telephone number and name changes due to marriage / divorce.

156. A few respondents simply stated that their support for the proposal would depend on the amount of the extra charges, or what the change of circumstance was.

157. Small numbers of respondents each made the following other points:

• It would be easier to have one fee covering all or any changes of circumstances.
• It was unclear why the date of birth is included in the list of possible changes as this is unlikely to change.
• Suggestions for alternative charging structures as follows: an initial set up charge plus a small annual administration fee; a maximum of 2 changes between renewals to be allowed without charging a fee; use of a graded charge depending on the number of changes; and a charge to only apply if a local authority has to update changes themselves.
• Consideration should be given to the fees charged for similar services elsewhere in the UK.

Incentivising landlords

158. The consultation asked for stakeholder views on other ways in which landlords might be incentivised to comply with registration requirements and improve standards.

Q14: What are your views on offering incentives to landlords and agents to apply for registration and / or improve their practice?

159. A total of 210 respondents opted to provide commentary to this question. Roughly equal proportions of those who responded gave positive and negative views.

160. A minority of respondents made comments which supported the use of incentives or discounts to improve practice. Benefits identified by respondents included reducing the cost of enforcing legislation and helping to reduce bureaucracy. Examples of improving practice suggested by respondents included taking part in the Landlord Accreditation Scheme, obtaining membership of Scottish Association of Landlords (SAL), and taking part in forums, conferences or local authority meetings.

161. A minority of respondents were supportive of training course attendance or accredited training to qualify for discounts.

162. A minority of respondents were in favour of having a discount available for early renewal, or within a specified time prior to registration expiry. Benefits suggested by a minority of respondents included savings on the issue of reminder notices and on having to chase late applications.

163. Smaller numbers of respondents perceived that incentives may increase compliance in the forms of adherence to legislation, standards being met, quality improvements being gained and a reduction in enforcement actions.

164. Significant numbers of respondents offered general support for incentives or made mention of discounts being generally helpful. Very small numbers of respondents made other comments about the advantages of introducing incentives or discounts as follows:

• Incentives may increase registration.
• Incentives would encourage landlords to use agents (with the additional benefits of reduced fees for some landlords, agents being accredited on a landlord's behalf, and circumventing the need for landlord training). As noted by a local authority,

"If landlords have undertaken a training course or a joint scheme to improve their practice, then granting a discount to the application fee seems reasonable. Our experience and feedback from landlords suggests that many feel that they do not receive anything in return for their fees. This would help to recognise and support those who are making efforts to be a good landlord." Local Authority

165. Some respondents also gave reasons not to have incentives for registering or improving practice; a minority noted that as registering is a legal obligation or requirement there should be no incentives. A similar proportion perceived that incentives would do nothing to rein in bad or rogue landlords as they would be non-compliant anyway. Smaller numbers called for non-compliant landlords to be prosecuted; some felt that penalties for non-compliance would be more effective than incentives, with suggestions for penalties to include a ban from operating in the private rented sector, a ban from charging rent and the introduction of a fining system.

166. A comment from a housing association was;

"This would result in money being paid to those landlords who meet their requirements register. Those who fail to do this, for instance, because their properties do not meet the tolerable standard, are unlikely to be persuaded to become registered because of such incentives. I do not, therefore, believe this to be a cost effective way to address this issue."

167. A number of respondents were against extra training or accreditation being eligible to qualify for discounts. A large variety of reasons were given for this viewpoint which included: incentives trivialise accreditation, the system being open to abuse, training only exists to make money for training companies, training being too expensive, landlords being able to keep up-to-date without training courses, and the costs of training reducing the money landlords can invest in property.

168. A few respondents thought that better guidance and communication with landlords should be the main priority rather than the provision of incentives. A variety of examples were given including that many landlords do not know what accreditation is, provision of a support service for landlords, publication of a lead time for being compliant, provision of automatic reminders, awareness raising of how to reduce fees, provision of local authority newsletters or forums, provision of an online tool to record certificates or renewal dates, and promotion of deterrent activities.

169. Very small numbers of respondents raised other standpoints, concerns and suggestions:

• The application of a late fee as a deterrent, or the existing late renewal fee, should already be sufficient as an incentive.
• Incentives penalise small or accidental landlords (training courses being especially onerous in terms of travel time and expense).
• Concerns about the costs of discounts to local authorities (e.g. loss of income, increased validation checks needed to qualify for discounts, complications to processes, increased administration).
• There should be no charge for registration at all (e.g. it shouldn't cost to do it online; it will increase registration uptake if there is no charge).
• Incentives would not help tenants (e.g. landlords would be no more likely to do fire safety, incentives won't improve the quality of life for tenants).