Registration of Private Landlords: Guidance for Local Authorities

PART 3: ADMINISTRATION OF REGISTRATION

3.1 INCLUSIONS AND EXCLUSIONS

Key points:

• In general, owners of privately rented property are required to register
• Agents can also register but are not required to do so
• Agents who do not register must still be assessed as fit and proper when acting for a landlord
• There are some exemptions to the requirement to register. If there are any doubts about whether a landlord is required to register, council legal teams should be consulted.

This section is designed to help authorities correctly identify included and excluded properties. Only if all the properties that a private landlord lets are exempt from registration will the landlord not need to register.

In many cases this should be a straightforward decision, but there will inevitably be individual cases that prove more complex. Authorities should consult their legal services for advice or contact registration colleagues in other authorities who may be able to help.

The scope of inclusions

In general terms, a person requires to be registered if he or she is the owner of residential property which is subject to a lease or occupancy agreement and is not specifically excluded. Local authorities and Registered Social Landlords ( RSLs) are not required to register under this legislation. The Crown is also exempt from the requirement to register.

A lease or occupancy agreement will fall within the scope of the 2004 Act if the let is to an 'unconnected person'. An 'unconnected person' is defined by the Act as, 'a person who is not a member of the family of the relevant person'. The definition of a family member is to be construed in accordance with the Housing (Scotland) Act 2001 (the 2001 Act), section 108 ¹ .

Where a property is let to a family member, this will fall outwith the scope of the 2004 Act.

An occupancy agreement has lesser force than a lease and is defined in the 2004 Act as ' any arrangement under which a person having a lawful right to occupy a house permits another, by way of contract or otherwise, to occupy the house or as the case may be, part of it: but does not include a lease'.

As stated, registration has wide coverage and applies to all let residential property not specifically excluded.

• Agents

The owner of a registrable property must also declare any agent who acts for him or her in relation to the letting. It is not compulsory for agents to register in their own right, but they may find it more convenient for them and cheaper for their clients to do so. Experience shows that the majority of agents prefer to register.

Where an agent registers, he or she will pay a principal fee. Where a landlord registers and includes the details of that agent with his or her application, there will be no additional fee payable for this. If an agent is registered, then they will be able to supply the landlord with a registration number which can be used in the landlord's application for registration.

If a landlord applies for registration and specifies details of an agent who is not separately registered on the application, an additional principal fee (the 'agent fee') will be payable by the landlord. Local authorities can encourage agents to register separately to avoid an additional cost burden on their client. The agent fee compensates a local authority for the fit and proper checking activity they must carry out to establish that an unregistered agent who is specified within a landlord's application is fit and proper. An agent who is assessed as fit and proper under these circumstances should not become registered once the fit and proper checking activity is complete. An agent can only become registered if they apply for registration in their own right. Local authorities should establish their own processes for undertaking this fit and proper checking activity for agents.

It is good practice if a landlord specifies an unregistered agent within their application for the local authority to alert the landlord to the fact that they will need to pay the agent fee.

An agent may be:

• a commercial agency
  • a lettings agency
  • a property management agency
  • an estate agency
• an organisation such as a charity
• an individual or individuals, for example, a couple who manage a rented house on behalf of a relative who is working abroad
• an employee of an owner organisation (e.g. a factor for an estate that is a trust or a company)

The Antisocial Behaviour etc. (Scotland) Act 2004 defines an agent as being 'a person who acts for the person in relation to the lease or occupancy arrangement'.

It is worth considering the following principles when considering whether or not a person is acting as an agent and therefore needs to be assessed as fit and proper in relation to a landlord's application.

• Individuals, or agencies, supplying services to the landlord will normally only need to register if they are actually involved with the tenants on a regular basis.
• Any persons who carry out administration of a legal nature that does not involve direct contact with the tenants would not require to register..
• Contractors carrying out works to the property should not require registration.

Annex 6 provides a checklist to help local authorities and landlords to identify the typical activities that an agent may carry out. This could also be used as a guide for distribution to landlords and agents.

Local authorities should consider putting in place passporting arrangements for agents who are licensed to manage HMO properties.

Further details on Agents are provided at Section 3.4.

• Tied housing

Owners of tied housing, where accommodation is linked to the occupier's employment, must also be registered (excepting the specific exemption for manses, rectories etc. defined later in this section). A tied housing arrangement would exist where, for example, an employee is required to live on-site or the provision of housing is a term of the employment contract.

• Tenant Farmers

Owners of houses on an agricultural holding that are occupied (i.e. lived in) by a tenant farmer do not usually require registration (see section on Exclusions). However, in respect of any other houses on the land within the lease that the tenant farmer sublets (including tied housing within an agricultural holding) registration is required.

It is the owner (in this case normally the landowner) of the property who requires to register as the landlord. This applies whether the property is provided on a tied basis, provided rent free to former employees or their families or let under normal residential practices.

The tenant farmer, as the landlord of the sub-tenancy, is deemed to be an agent of the owner for the purposes of registration and will require to be assessed by the local authority as 'fit and proper'. The simplest way to do this is for the tenant farmer to apply to be registered as an agent. The owner can also give details of the agent on his or her application to register.

• Bed and Breakfast establishments

There is no requirement for Bed and Breakfast establishments to register where the primary purpose is holiday accommodation.

• Joint owners

Joint owners of rented residential properties require to be registered.

Where a house is jointly owned by more than one individual and they do not together form a 'legal person', (see the note at end of the section) each person will need to be separately registered, since either person could be unfit to let residential properties and either person could commit an offence of letting while unregistered.

Each joint owner will complete a registration, but discounts apply to the registration fee. A 'lead' joint owner should be designated by the owners from amongst their number. The lead owner will pay the principal and property fee for each of the jointly owned properties. See Section 5 for further details.

An applicant is obliged to declare if there are any joint owners of a property in their application for registration. The requirement to identify any joint owner is satisfied by supplying the name and address of the joint owner. Any other information which is provided about the joint owner is provided on a non-mandatory basis. Every joint owner is responsible for the submission of their own application and is required to make their own declarations, for example, that they comply with all housing legislation.

All joint owners will be subject to the 'fit and proper' test. If one of the joint owners fails the fit and proper test, the expected outcome would be that the application is rejected. However, before finalising its decision, the authority should consider if the appointment by the joint owners of a registered agent under an acceptable management contract would provide sufficient confidence to allow the person who failed the test to be acceptable for registration (see section 3.4 The fit and proper test).

Individual joint owner applications can be assessed separately and there is no need to wait for all joint owners to submit their applications before reaching a decision on one. If one joint owner fails to submit an application for registration the property cannot be let; if it is let all the joint owners would be committing an offence and enforcement action can be taken.

Where one of the joint, successfully registered, owners also owns and lets residential properties in his or her own name, these separately owned residential properties must be listed in the applicant's registration details. If the let of these properties commences after the applicant's initial registration, the applicant will be able to make the necessary amendments and fee payment online, or by contacting the local authority. Such an owner will have either already paid a principal fee, or been entitled to a 100% discount on the principal fee. The owner is registered and therefore not liable to pay an additional principal fee on the properties which are owned separately in that local authority area.

• Unincorporated Trusts

Unincorporated trusts are not separate legal personalities and should not be treated as such for the purposes of registration. In law, members of an unincorporated trust jointly own property. Therefore, for the purposes of registration, individual members of an unincorporated trust are required to register as joint owners. Appropriate joint owner discounts will apply.

Exclusions

Exclusions from registration are limited. Exemptions are included within section 83(7) of the 2004 Act which has been subsequently added to through regulations. Authorities need to be careful judging some types of exclusion as there are 'boundaries' on the scope of the exclusion.

Types of exclusion:

• lets to family members (as defined in section 108, Housing (Scotland) Act 2001)
• life rents
• houses for holiday use
• properties used by religious orders and organisations
• accommodation with care
• houses subject to control orders
• agricultural and crofting tenancies
• resident landlords
• transitory ownership (executors, heritable creditors and insolvency practitioners)

• Life rents

This is a recognised legal arrangement whereby a person does not own a property but retains a right to use it for the rest of his or her life; this use may commonly entail occupancy. Such a situation may arise for example where a parent continues to occupy the family home which has been inherited by their children.

• Houses for holiday use

Residential properties which are let or occupied for holiday purposes are exempt from registration. Distinguishing genuine from sham holiday use can be difficult, and the facts of each individual case must be scrutinised. It may be helpful to refer to the definition adopted by HM Revenue and Customs reproduced below. However, this is not specifically referenced in the registration provisions, and the particular details of each case must be considered.

"The conditions to be met are set out in ICTA88/S504 (3) and all three must be satisfied if a letting is to qualify:

• the accommodation must be available for commercial letting to the public generally as holiday accommodation for not less than 140 days
• the periods for which it is so let must amount (in the aggregate) to at least 70 days
• for at least seven months the property must not normally be in the same occupation for more than 31 days

A property that is let on a long-term basis cannot be regarded as available for holiday lettings. A property that is owner-occupied for part of the year cannot be regarded as available for letting while it is owner-occupied. Nevertheless, the words 'in the same occupation' should be interpreted as 'let in the same occupation' and do not preclude relief to an owner who moves out of their home during the holiday season and returns to live there when the season is over".

• Religious orders and religious organisations

Accommodation used by members of a religious order, the principal occupation of which is prayer, contemplation, education or the relief of suffering ² is exempt from registration. Typical examples are a convent and a monastery. Registration is required if accommodation is occupied by persons who visit the order for a period of time, for example, to seek temporary accommodation or respite care, but are not themselves members of the order.

Religious organisations require to register and to list properties they own that are let or occupied except where the house is owned by an organisation which has the advancement of religion as its own principal purpose and the regular holding of worship as its principal activity and the house is occupied by a person whose principal responsibility is the leading of members of the organisation in worship and preaching the faith of that organisation.

• Accommodation with care

Accommodation providing care services is exempt from registration, where the Care Commission is responsible for regulating the property as well as the service, namely:

• a care home service
• a school care accommodation service
• an independent health care service
• a secure accommodation service

• House subject to a Control Order

A residential property, that is an HMO, which is in local authority management due to the service of a control order under section 178 of the Housing (Scotland) Act 1987, is exempt from registration.

• Agricultural, small holding and crofting tenancies

See previous sections on tied housing and tenant farmers.

Residential properties which are subject to an agricultural or small holding tenancy and occupied by the tenant under that tenancy do not require to be registered. The exclusion applies to tenancies under the Agricultural Holdings (Scotland) Acts 1991 and 2003, the Crofters (Scotland) Act 1993 and the Small Landholders (Scotland) Acts 1886 to 1931.

All crofts are exempt from registration. The croft should be occupied by the crofter him/herself and should not be sublet. If there are allegations of a sublet then the matter should be dealt with by the Crofters Commission. If proof of exemption is required then copy leases can be obtained that clearly state that they are made under the exempt legislation. All crofts have a croft number and this should be available from the crofter or from the Crofters Commission itself.

• Resident landlords

Where a resident landlord has lodgers living with him or her in his or her principal or only home under a tenancy or occupancy arrangement, that house is exempt from registration. Any resident landlord with more than two lodgers is covered by HMO licensing. Authorities should be wary of sham resident landlord arrangements designed to avoid registration. The exemption only covers the landlord's main residence; if the landlord lets any other houses he or she must be registered and the houses must be recorded.

Ministers have agreed to keep the position on resident landlords under review and to receive further evidence about how the resident landlord sector is operating. It is acknowledged this sub-market is informal, fluid and not very visible. It would however be helpful if authorities could maintain a record of any problems with exempt resident landlords that are brought to their attention and of any knowledge they have about whether the sector is contracting or expanding.

• Transitory ownership

There are particular circumstances where the ownership of a house is short-term and part of a transitory process for which exemption from registration is granted:

• The house is in the lawful possession of a heritable creditor for a period not exceeding 6 months as the result of an action for repossession to realise a debt secured on the house
• The house is part of an estate of a deceased person and is being held by an executor for a period not exceeding 6 months for the purposes of dealing with the deceased person's estate.
• The house is in the hands of a person acting as an insolvency practitioner and has been so for a period not exceeding 6 months.

For all of the above, retention beyond 6 months for the purpose of renting or continued management requires registration.

Note: Insolvency practitioners who are appointed by the Accountant in Bankruptcy are not required to register as they are covered by Crown immunity.

• Sharia compliant home ownership

There are several arrangements currently available to Muslims which help them to fund the purchase of a home without breaching the requirement of Sharia law that they should not make or receive interest payments. Some of these arrangements may appear to involve renting when on the face of it they are not situations that are intended to be regulated by registration. However, the variety of possible arrangements suggests that in some cases tenants who should be protected might not be protected if specific provision was made about Sharia-compliant arrangements.

Many Sharia-compliant arrangements involve an intermediary buying the house under normal lending arrangements and then selling it on at a specified price that covers their whole costs and is payable in agreed installments. In other cases the ownership of the house remains with the intermediary until the installments have been paid, when the ownership transfers to the occupant for a nominal sum. In this latter arrangement the installments may be described as rent.

The existence in this situation of a contract which allows the occupant to live in the property is likely to be an occupancy arrangement for the purposes of registration. The landlord will have legal rights which affect the occupant's position and registration provides the occupant with protections. The variety of possible arrangements means that it would be inappropriate, on the basis of current information, to apply a blanket exclusion. It is for the local authority to make its own decision in the light of the legislation and the particular circumstances.

It would be helpful if local authorities could give the Scottish Government details of any cases where there are difficulties over the interpretation of Sharia-compliant arrangements, so that consideration can be given to further regulation if necessary.

• Prospective owners of rented property

Any person who intends to enter the letting market as a landlord should be advised to seek registration prior to purchase of a property to check whether they are judged to be a fit and proper person for letting purposes before they commit themselves to the investment. It would be helpful if that information was provided in local authority publicity material. Local authorities should seek to cooperate with local Buy to Let ( BTL) mortgage lenders, Independent Financial Advisers and solicitors to ensure the clients of those organisations are properly briefed on the registration scheme and their future responsibilities as landlords.

It is an offence for a landlord to communicate with prospective tenants with a view to entering into a lease or occupancy agreement without having applied for registration or being registered.

• Companies, organisations, trusts and charities: the applicant as a 'legal person'

A company, partnership, incorporated trust etc. registers as a 'legal person'. Employees, directors, or partners of such a body do not need to register individually as either landlord or agent. This is because they are regarded as an integral part of the 'legal person'. The company etc is liable for those actings of its employees, which are carried out on its behalf.

However, because an employee, director or partner is an integral part of the 'legal person', information about such an individual is clearly relevant material for the purposes of the fit and proper person test. The local authority may well choose to ask for the names of any employees etc. who will undertake day-to-day management on behalf of the employer, and to ask for further information about those individuals if necessary, such as relevant convictions. Refusal to provide such information would be a relevant consideration.

A resident factor is a particular example of an employee, director or partner, who could be part of a separate business providing agency services under a contract. A resident factor should not be dealt with as a separate category, but as an employee etc. or agent according to the particular basis on which that factor is carrying out management on behalf of the owner.

3.2 IDENTIFYING LANDLORDS

Key points:

• It is important that local authorities actively promote registration
• A variety of methods can be used to publicise the scheme
• Local authorities should make use of a variety of data sources to identify potentially unregistered landlords
• It is important to make sure that all landlords are aware of the requirement to register and how they can do this

This section provides local authorities with guidance on the identification of landlords in their area.

Landlords are legally responsible for ensuring that they are registered and that any agent they use is also listed on their registration application form. The legal requirements on the local authority are to prepare and maintain the public register, to deal with the applications received and provide advice and assistance to landlords and tenants as required by the Private Landlord Registration (Advice and Assistance) (Scotland) Regulations 2005 ³ and by the Private Landlord Registration (Advice and Assistance) (Scotland) Amendment Regulations 2008 (see section 3.6 Provision of information and advice).

In practice, there are advantages to a local authority in adopting a proactive stance, by seeking to identify and support landlords and to advise them about the obligation they have to apply for registration. In addition, local authorities have an important role in ensuring that the scheme is properly enforced.

There are two major elements to ensuring that landlords are aware of their requirement to register:

• promotion and publicity so that landlords come forward to register
• active searching of data sources and information sharing with local authority colleagues to identify landlords and inform them of their duty to register and that they are committing an offence in operating without registration

Promotion and publicity

Each authority must decide how best to target its promotion and publicity work. In particular, many amateur or 'informal' landlords, for whom renting is a small-scale activity incidental to their main occupation or business, and owner occupiers who rent their own home while they are living or working elsewhere may be unaware of their obligations as a landlord. The importance of raising awareness of those obligations cannot be over-emphasised. It is important that local strategies for raising awareness of registration are regularly reviewed to ensure continued effectiveness, particularly as new landlords come onto the market.

Local authorities have the major role in this promotional endeavour, but are supported by the Scottish Government. Key routes to promoting awareness among landlords include activity by :

• Scottish Government
• local authorities
• landlord and agents' organisations
• mortgage and financial advisers and insurers
• tenants
• Private Rented Housing Panel

• Scottish Government

The Scottish Government maintains web-based content to provide answers to a wide range of questions on registration, including information on the registration process and making contact with local authorities - www.betterrentingscotland.com.

The Scottish Government has produced publicity material, a guide for landlords and a leaflet for tenants and neighbours. Local authorities have access to the electronic version of this information material and are encouraged to tailor it with their local authority specific information, print it and disseminate. Leaflets will be updated as required.

Organisations such as the Scottish Association of Landlords ( SAL), the Scottish Rural Property and Business Association ( SRPBA), the Association of Residential Letting Agents ( ARLA) and the Council of Mortgage Lenders ( CML) have assisted in disseminating information about the registration scheme.

• Local authorities

Publicity needs to reach everyone who is, or may be, a registrable landlord or agent.

A variety of methods of promotion are available to local authorities to reach out across the wide spectrum of private landlords and agents that is encompassed by the mandatory registration process. Authorities may find it helpful to contact organisations, such as those listed in Annex 5 , for assistance in making contact with landlords in their authority area.

Not all landlords have computer/internet access. This should be recognised by local authorities and addressed through the provision of advice and information by a variety of methods.

It is strongly recommended that local authorities provide:

• written promotion material for distribution
• web based information
  • explaining registration
  • identifying a contact officer
  • providing a link to the centralised registration application form
• opportunities for direct contact between landlords and the local authority
• encouragement for online applications for registration
• support for local landlord forums

Written material should make clear where public access to computer/internet facilities can be obtained, for example in libraries. Landlords who struggle to access or use the internet should be encouraged to make use of such public internet facilities as are available. Landlords could also access support by contacting:

• any landlord membership organisations with which they have links
• advice and information agencies
• youth information services (for landlords within the relevant age group)

Landlords may be able to seek technical support from staff in libraries overseeing the use of internet facilities. Local authorities may feel there is benefit in offering support to landlords who are facing difficulties in making an online application for registration.

The production of promotional literature about the registration scheme is fundamental. Written material in the form of attractively designed, 'plain English' leaflets, pamphlets and posters is essential for distribution through as wide a range of relevant outlets as possible (see below).

The incidence of private landlords from ethnic minority communities should be assessed. Where it is clear that this would assist, authorities should make available leaflets and pamphlets translated into appropriate languages and/or arrange for translators to be available in order to handle enquiries and concerns from members of ethnic communities - from tenants as well as from landlords. The Scottish Government will arrange for translated material if there is sufficient demand at national level. Local authorities should identify and communicate their needs to the Scottish Government in the first instance.

The Scottish Government has produced leaflets for adaptation and use by local authorities. If authorities also wish to produce their own material, it is advisable that this is kept simple and not over-detailed. The Scottish Government material may be used as guidance on content.

Local authorities should consider presenting information in such a way as to encourage landlords and agents to seek registration as a positive step. Emphasis could be placed on the benefits to landlords of removal of the worst landlords from the sector and the credibility to be drawn from acknowledgement that they are fit and proper to be landlords.

Publicity distribution points need to be mapped out. Any point within the authority that a private landlord or tenant might access should display leaflets and pamphlets, such as:

• all local housing offices
• Housing Benefit and Council Tax offices
• planning departments
• development departments
• social work offices
• environmental health offices
• libraries
• information services (including youth information services)

The possibility of including a leaflet with a mail-shot that may be made by the Housing Benefit section to private landlords can be discussed with colleagues in that section.

Promotional literature could be supplied to:

• Citizens' Advice Bureaux and other advice and information services
• estate agents
• property agents
• letting agents and other factors
• solicitors
• local banks and insurance agents
• landlord organisations or forums - all members should receive a copy and be asked to 'spread the word' amongst other landlords.

Advertisements publicising the registration scheme could be run in the lettings sections of local newspapers and property guides and the authority's communications office could produce articles to run in local commercial and free newspapers and newsletters. If private lets are advertised in any shop notice boards, an advertisement about registration can also be placed. Local radio stations could also be contacted.

Increasingly, house lets are advertised on the internet and authorities can run searches of formal (company) sites and informal sites set up by individual landlords for lets in their area. Authorities may also wish to consider making contact with the managers of such sites with a view to posting an advertisement or information on the site.

For authorities with landlord associations or joint landlord-council forums, registration officers can make presentations. In authorities with no associations or forums, it may be fruitful to hold one or more well-publicised public meetings to promote and explain the scheme.

Active searching of data sources

There is a variety of potential sources of information about private landlords that authorities can consider or request access to in order to identify landlords and their residential properties. Most are internal to the authority but some are external organisations.

For a variety of statutory and other purposes, local authorities hold a range of information about landlords, their residential properties and tenants. Information will be kept in formal registers as well as in more informal lists. Information will certainly be held by the housing service, but may also be held by other services and departments of the authority. Accessing such information to identify and contact landlords can assist in increasing compliance with registration.

There can be real value in establishing an officers' working group involving all the departments or sections within a local authority that potentially hold useful data. Such a group, co-ordinated by the lead registration officer, could have a remit to:

• co-ordinate data identification
• discuss issues of data sharing in relation to data protection legislation
• facilitate cross-checking, matching and verification of information drawn from diverse sources.

Authorities should cross-check to avoid approaching landlords who are not required to register as they are exempt, or making multiple approaches to landlords who have already been contacted or even registered. This can occur because of data input errors or inconsistent approaches to spelling a landlord's name in different databases. Joint working will facilitate avoidance of these kinds of errors.

However, in accessing and sharing any personal information, authorities must satisfy themselves that the use of this data complies with the provisions of the Data Protection Act 1998 and other relevant legislation and also with the terms of section 139 of the Antisocial Behaviour etc. (Scotland) Act 2004. Authorities must also ensure that any changes to the way in which data is used are covered by the authority's data protection procedures. Section 139 makes specific provision which is intended to assist the exchange of information on matters relating to antisocial behaviour ⁴ .

Potentially useful sources of information which officers might wish to consider include:

• housing benefit records
• house waiting list applications
• Private Sector Housing Grant applications
• temporary accommodation address lists
• housing advice centre records (e.g. from private tenant complaints)
• antisocial behaviour files
• a rent deposit scheme list
• owners in receipt of a factoring service
• private sector leasing schemes
• consumer complaints records from environmental/protective services
• council tax records

If not already in place, local authority officers should seek to establish the appropriate protocols for the access of such information and seek advice from their solicitors to ensure that there is compliance with the relevant legislation. Officers may wish to refer to Information Commissioner guidance: http://www.informationcommissioner.gov.uk. Care must be taken to ensure that the effort involved in accessing any of these sources (assuming no data protection barriers) is commensurate with the benefit to be gained.

There are also potential external data sources that authorities can consider. While recognising that some organisations may be restricted by their confidentiality rules, authorities can discuss and explain the purpose and use to which any released data will be used and how its confidentiality will be preserved. It may be that certain organisations cannot release any information but they will agree to inform all their customers or clients about registration and its mandatory nature for almost all landlords. Leaflets about registration should be given to such organisations for distribution.

Some data sources will be found in the same locations or in the same organisations at which promotional material and publicity have been directed. Possible external sources include:

• university and college accommodation services
• letting agents
• property management agents
• estate agents
• local solicitors
• lettings sections of local newspapers
• internet websites
• shop window adverts
• Citizens' Advice Bureaux
• housing aid centres
• tenants associations

• Landlord and agents' organisations

Many landlords across Scotland may be affiliated to national or local organisations, or involved in landlord forums. National organisations such as those listed in Annex 5 are able to provide assistance in making contact with local organisations, or in the dissemination of materials to member landlords directly. Professional agents may be involved with associations such as the Association of Residential Letting Agents ( ARLA).

An effective approach would also include the encouragement of landlords and agents to spread awareness of the requirement on landlords to register within the sector.

• Mortgage and financial advisers

The Buy to Let ( BTL) market is a potentially difficult segment of the private rented sector about which to obtain information. Information on investors who have become, or plan to become, landlords is important.

The 'visibility' of such landlords can be low and their awareness of registration may be poor. The best way to engage with this type of landlord (other than by the general publicity campaign work) is to make contact with local mortgage lenders, independent financial advisers and insurance providers who deal with BTL products. Providing client data would breach client confidentiality, but they are very unlikely to want their clients to commit a criminal offence by not being registered. They can therefore be expected to accept registration information materials to pass on to all their BTL clients. The Scottish Government has also provided information to lenders through the Council of Mortgage Lenders ( CML.)

• Tenants

The benefits of registration are ultimately to give tenants an assurance about the suitability of their landlords and to protect them from the worst landlords. Information and publicity about registration is entirely appropriate for tenants and could be provided on that specific issue with leaflets and posters distributed to similar outlets as those described above for landlords (with the addition of homelessness units).

Tenants should be encouraged to recognise the benefits of registration, and to check whether their landlord is registered. A tenant who has concerns or complaints should be actively encouraged to make contact with the local authority (see section 4.2 Breaches for more information).

Authorities are encouraged to view individual tenants as a source of information when they seek advice or help from either a local authority or a voluntary housing agency. The vulnerability of private tenants must be recognised and the information they provide (possibly inadvertently) must be handled confidentially (see section 4.2 Breaches for more discussion of this issue).

• Private Rented Housing Panel

A committee of the Panel has a duty to notify the local authority of a landlord's failure to obey a Repairing Standard Enforcement Order. It may also be possible to obtain information from the Panel about landlords in cases that are resolved without the need for an Enforcement Order to be served.

Landlords resident outwith Scotland

Those landlords letting in Scotland but resident outwith Scotland may be more difficult to identify. As a group, they are therefore less likely to be aware of the obligation of registration.

Landlords living outside Scotland are most likely to manage their properties via an agent. If the agent has not already moved to act on the landlord's behalf with regard to registration, contact should be made with the landlord through the agent.

Landlords more generally should be encouraged to spread the word on registration to other landlords.

Tenants in turn should be encouraged to check that their overseas landlord is registered; where this is not the case, the local authority should be alerted. The local authority may be able to obtain the landlord's contact information from the tenant. If not, other investigations will be required.

Local authorities should be clear on their fit and proper processes and at what point an application would be subject to enhanced scrutiny because of the size of a landlord's portfolio or their location. Authorities should also consider the circumstances in which a landlord could be asked to use an agent in order for them to be approved as fit and proper, including when this might apply to landlords who are resident outwith Scotland. These matters are for each authority to decide locally.

3.3 INFORMATION FROM APPLICANTS

Key Points:

• Certain information must be provided in an application for registration
• An application is only valid once all mandatory information has been provided to the local authority and the fee has been paid
• Local authorities should take steps to obtain any missing mandatory information. Enforcement action should be considered if a landlord fails to provide the information required.

The assessment of whether an owner and a person who acts for an owner should be registered should be based on all available information.

The application must be made by the 'relevant person' who is defined widely as a person who is not a local authority or a Registered Social Landlord ( RSL).

The list of required information that the applicant must provide is restricted to the following:

• Applicant profile
  • the applicant's name and address
  • correspondence address for the applicant
  • the applicant's date of birth
  • other names by which the applicant has been known
  • previous addresses of the applicant in the last 5 years
  • the identity (name and address) of any other joint owner of the house (or residential properties) specified in the list; whether that person is a member of the family of the applicant and which joint owner is designated as lead owner for registration purposes
  • the company registration number if the applicant is a company
  • whether an organisation applying for registration is a charity and if so, its charity registration number
• House information
  • the address of each residential property that is let by the applicant in the local authority's area
  • the name and address of any agent who is used for the property (or properties) specified
  • the contact address in connection with day-to-day management of the property (or properties) specified
• Judgements and adjudications
  • details of any licence, voluntary accreditation or registration held, refused or revoked in connection with letting residential properties in the United Kingdom
  • a declaration of relevant convictions in relation to specific offences
  • a declaration that the applicant complies with relevant housing legislation and other legal requirements relating to his or her lettings
  • any court or tribunal judgments against the applicant under equality legislation (i.e. for equal pay, sex discrimination, race discrimination, disability discrimination, employment equality in terms of sexual orientation and religion or belief)

Relevant convictions and spent convictions

Relevant convictions are defined by section 85 of the 2004 Act as convictions relating to fraud, dishonesty, violence or drugs.

Applicants seeking to be registered as landlords must disclose details of both spent and unspent convictions. This will assist local authorities in determining if the landlord is fit and proper. However, information on spent convictions must be explicitly asked for on the application form in order for this requirement to be applicable. The online application form explicitly asks for information on spent and unspent convictions. Local authorities should ensure that paper application forms also reflect this locally.

Declaration

Applicants must be able to confirm that they comply with the legal requirements of landlord-tenant law and related obligations.

Some landlords, especially amateur landlords, may not be properly acquainted with lettings and rent legislation. To assist applicants in correctly stating their position on meeting their legal obligations, the application form is accompanied by a summary of their obligations (see Annex 1 ).

There may be situations in which it is reasonable and appropriate for an agent to an application on behalf of their landlord client. However, the application (if paper) should be signed by the applicant.

Additional voluntary information requests

In addition to the information which an applicant must provide, additional information is also collected on a voluntary basis. This includes telephone numbers and email addresses (email addresses are mandatory when registering using the online system).

Authorities may also request that applicants respond to additional voluntary questions. These questions would normally be issued separately, as it is usually not possible to include such questions in the online system.

Given the nature of the registration process, authorities should consider very carefully whether any further information they may seek on a voluntary basis is really necessary or whether it will undermine the 'light touch' approach sponsored by Ministers.

It is recommended that additional voluntary information does not address further personal profile data such as National Insurance Number, driving licence details, passport number, UK banking arrangement and other such information. There may however be an interest for local authorities in seeking further information on:

• property size
• number of tenants
• type of tenancy

Voluntary information, if considered worth trying to obtain, is best linked to furthering an authority's strategic planning interests (e.g. Local Housing Strategy) or to improving its networking with landlords and agents (e.g. to develop landlord training programmes).

It must be remembered that any non-mandatory information does not need to be provided by the applicant and sporadic completion of such information may not provide authorities with the quality or quantity of data they desire. In any case, such information requests must be clearly identified as voluntary.

3.4 THE FIT AND PROPER TEST

Key Points:

• All landlords and agents must be assessed as fit and proper by the relevant local authority
• A range of information can be taken into account in the fit and proper test
• The application process is intended to follow a light touch approach
• There are no automatic grounds for refusal
• Local authorities should have clear and robust procedures to ensure effective scrutiny

In assessing whether an applicant (landlord or agent) is a fit and proper person, authorities must take account of the information prescribed in section 85 of the 2004 Act.

Paraphrased, section 85 covers:

• any material which shows that the individual has:
  • committed any offence involving fraud, dishonesty, violence or drugs
  • practised unlawful discrimination in any business activity
  • contravened any provision of the law relating to housing or landlord and tenant relations (summarised in Annex 1 )
• any material relating to any action (or failure to act) in relation to antisocial behaviour affecting a house which the person lets or manages
• any material relating to an arrangement for an agent to act for the landlord in relation to the lease or occupancy arrangement
• any other material relevant to the question of whether the person is fit and proper

The legislation does not provide any automatic grounds for authorities to refuse to register a landlord or agent.

With material that falls within section 85, authorities must evaluate its strength, veracity and importance and, together with any other relevant information it holds (which may be favourable or unfavourable to the landlord's or agent's position), arrive at a balanced judgement whether to accept or reject the application.

Without any negative information or legitimate concerns about an applicant, the application should be approved without further scrutiny. This is in the spirit of the legislation which has provided local authorities with registration as a means to identify and deal with the worst landlords, not to place every landlord under an initial presumption of unfitness or incompetence.

Unnecessary additional investigation for most or all applications will add unacceptably high costs to the system, draw resources away from pursuing the real problem landlords and ultimately fail tenants by undermining supply and, consequently, other key Scottish Government policies in relation to homelessness and a thriving private rented sector.

It is important for local authorities to have clear and robust processes in place for dealing with the processing of applications and for completing the decision making process. Failure to establish proper procedures can cause delays with processing.

Scrutiny of applications

The starting assumption is that the applicant is a fit and proper person.

If an authority identifies suspect information in the application form or holds other material that indicates the applicant may not be fit and proper to be a landlord or agent, it will have reasonable justification to challenge the presumption of approval. It can then carry out further enquiries to check not only the information about which it is concerned but any other information that it has collected.

It is important that the proper processes are in place to arrive at the decision to further scrutinise any application, and for this scrutiny to then be undertaken decisively and in a timely manner. In particular, local authorities should have established processes for progressing applications which are facing scrutiny due to a declared conviction. Local authorities should remember that a registration can always be revoked if further information about whether an applicant is fit and proper comes to light after approval.

Other than the fact that registration should be approved when no negative information is held about the applicant, there is no single 'rule of thumb' for making the decision to register or not to register an applicant.

Decisions about risk level and the relative importance of different types of negative information will involve a professional judgement by the officer or officers with responsibility for making decisions. Decision making processes and relevant delegated authority should be in place to assist with this.

If an authority's detailed enquiries conclude, on reasonable grounds, that the applicant knowingly gave false mandatory information or knowingly omitted mandatory information (e.g. a relevant conviction), the applicant will, if subsequently found guilty , have committed a criminal offence in terms of section 83(4) of the 2004 Act. The authority might also consider that the applicant's actions justify the refusal or removal of registration. Such a step should not be automatic but instead should be based on professional judgement taking account of all the circumstances.

In the case of an applicant who has a relevant conviction which was correctly declared, a judgement must still be made taking account of other information available about the applicant and if necessary by interview to assess whether he or she is able and willing to operate in a manner regarded by the local authority as fit and proper. In considering past actions of the applicant and the conviction, the local authority should consider whether any problems are likely to occur again and whether they are likely to affect the applicant's letting activity. In particular, the nature of any agency arrangement should be taken into account. It is quite possible to conclude that if the applicant represents a low risk, registration is appropriate.

Local authorities will need to establish a decision-making process for applications which do not allow for a clear cut decision, but are encouraged to delegate routine decision-making functions to officers.

For further discussion of scrutiny of applications, see section 3.5 Processing and checking applications.

Cross-checking with other information sources

In order to determine whether the information provided by the applicant should be taken at face value or whether the application should be subject to further scrutiny, it is desirable for each local authority to identify relevant information in its possession relating to landlords, agents and residential properties which are thought to be rented.

Relevant information is information that represents reliable evidence of problems that have arisen with a landlord, his or her properties or with an agent.

It is expected that such information will encompass only a small minority of landlords and agents in relation to the overall number of landlords who will need to be registered. The evidence may be, for example:

• service of a Statutory Enforcement Notice (taking into account the reasons for serving it and whether the owner was at fault)
• record of complaints against the landlord
  • e.g. management or maintenance of rented house (making full allowance for communal disrepair that requires agreement by a number of owners)
  • treatment of tenant
  • failure to act to deal with antisocial behaviour of tenant

Local authorities are encouraged to set up and actively use an online review list which should contain a list of names and/or addresses of landlords, agents and properties for which there is evidence or information suggesting that the landlord may not be fit and proper. This will simplify and streamline the processing of applications. The value of this approach is maximised if there is interdepartmental co-operation and all relevant departments participate fully in the exercise. Review lists should be kept up-to-date.

Whilst disclosure of names and addresses for the purpose of constructing the list must respect any inhibitions due to data protection requirements, there is specific provision in the Antisocial Behaviour etc. (Scotland) Act 2004 for disclosure of otherwise confidential information if that disclosure is necessary or expedient for the purpose of any provision in the 2004 Act - registration of private landlords and agents is such a provision ⁵ .

Information which is provided to the local authority for the purpose of seeking action to deal with a landlord's failings - a complaint from a tenant or a neighbour, for example- can be regarded as for a purpose relevant to registration. An applicant for registration will also be informed that information may be shared between local authority departments and other local authorities for the purposes of undertaking fit and proper checking. It is intended that information will be shared where there is already an explicit suspicion giving rise to concern.

The types of relevant critical evidence held on file by an authority from which to identify the names and addresses of landlords, agents and residential properties include:

• statutory Nuisance Abatement Orders
• Antisocial Behaviour Orders ( ASBOs) or Interim Antisocial Behaviour Orders
• Private Rented Housing Committee referrals
• records of multiple complaints of landlord/tenant problems including but not exclusively, antisocial behaviour (records may be held by housing or environmental health services)

It is important to note that the collated list of names and addresses on the review list is no more than a trigger for scrutinising the information that the local authority holds on file. Any application which produces a match to any entry on the review list will be automatically diverted by the IT system for scrutiny by a registration officer. Inclusion in the review list must not in any way be regarded as being in itself the basis for refusal. It is only further investigation of the available information which could lead to refusal.

The information available to the local authority should be considered in the round with other information provided by the applicant, and a balanced conclusion made as to whether that person poses any risk as a landlord. Equally important is the need to make sure the evidence collated is as sound as possible, since a decision to refuse registration, based on such information, is open to appeal.

Local authorities may also wish to carry out more detailed investigation of a randomly selected sample of applications that would otherwise not be diverted by the system. This could be achieved by sampling applications which are provisionally approved by the system. Officers may find it helpful to base their sample of properties on the risk assessment framework outlined in Communities Scotland's ' National Core Standards and Good Practice Guidance for Private Landlords and for Local Accreditation Schemes' ⁶ .

Landlords, agents and the fit and proper test

Section 84(4) of the 2004 Act is clear:

• both the applicant landlord and the agent must be classed as fit and proper in order for the landlord to be registered

While the legislation is clear, the decision on whether someone is fit and proper is a judgment and is not necessarily a clear cut yes or no. An assessment should be made on the risk that the applicant may fail to act properly in relation to future letting activity and the local authority must judge to what extent problems from the past are likely to recur.

There can be cases where the landlord as owner has failed a 'consideration' in relation to section 85 (or have been unacceptable on the basis of other material available to the authority) but such is the nature of the failure (or of any mitigating circumstances presented) that the authority can give the landlord the opportunity to take steps to avoid the application being refused. These steps should ensure fit and proper letting for the future.

The appointment of a suitable agent is one such way of avoiding non-registration but that does not make the landlord now automatically fit and proper and registrable. Authorities should consider the circumstances in which a landlord could be asked to use an agent in order for them to be approved as fit and proper, including when this might apply to landlords who are resident outwith Scotland. This is for each authority to decide locally but might involve considering whether the management of the property is satisfactory. Local authorities could consider whether procedures are in place for the following:

• Arranging or vetting potential tenants
• Preparing the lease, termination of other formal documents
• Collecting rent or holding deposits
• Dealing with any concerns the tenant raises
• Dealing with antisocial behaviour issues (note: the landlord has the legal responsibility to manage and ensure the issue is resolved)
• Instructing and organising repairs

If a landlord is unable to demonstrate his or her ability to deal with any of the above issues then they should be encouraged to put procedures in place - this might include using an agent.

Where the landlord agrees to appoint an agent, the reassessment by the authority will pivot on whether there is an acceptable agreement in place. The 2004 Act was amended by the Housing (Scotland) Act 2006 to require authorities to take account of any agreement between the landlord as owner and the 'agent', in assessing whether the landlord is a fit and proper person.

If the authority believes the agreement to be satisfactory in terms of the power it vests in the agent to have effective control and responsibility for the letting and management activity, it might mean that the landlord who otherwise would have failed can be registered.

Assessing agency agreements

Some confidence indicators that can be used to assess whether an agreement is both suitable and genuine include:

• Is the agreement between the parties signed by both parties?
• Is the agreement based on established codes of practice from trade bodies such as the RICS, ARLA and ARMA?
• Does the agreement set out clear lines of authorisation to the agent to act in respect of the letting and management of the house?
• Are the responsibilities of the owner and agent clearly set out?
• Has the agreement given the agent effective responsibility over the main lettings and management activities where the landlord alone might not act appropriately, such as:
  • inspecting the house to ensure it meets legal requirements for letting
  • advertising the house; interviewing applicant tenants; obtaining references/credit checks
  • selecting tenants; preparing a legally correct tenancy agreement; obtaining the tenant's signature; holding the tenant's deposit monies in an account
  • collecting and recording rent payments; paying outgoings; making payments to the owner
  • arranging necessary repairs and maintenance within clear expenditure guidelines; carrying out periodic inspections of the house
  • dealing with tenancy problems and monitoring adherence to the terms of the lease; taking lawful action for re-possession
  • dealing with antisocial behaviour by or against the tenant
  • assessing the condition of the house at tenancy termination, returning deposits; withholding deposits if damage or loss occurred.

An authority may wish to seek answers to further questions not covered by the agreement, such as:

• Is the agent an individual, company, partnership or some other entity?
• Is the agent a member of any recognised trade body appropriate to letting or managing residential property?
• Does any such membership include external regulation of the agent's standards and performance?
• Does the agent operate to a recognised code of practice?
• Is there any personal or commercial relationship (other than the agreement) between the landlord and agent?
• Will the agent receive any benefits from the landlord other than the stated fees and commissions set out in the agreement?

It is the duty of the landlord to inform the authority if he or she terminates the agreement or appoints a new agent. In the latter case, the landlord will need to produce a new agreement and this will require to be assessed in the same manner as the previous agreement. An authority may find it useful (as could an agent) to advise registered agents to inform the authority if an agreement has been terminated.

Advice to applicants

A local authority is required to give appropriate advice to landlords (and agents) where there is a likelihood that if given that advice, they could become eligible for registration. In giving advice on what action to take, it is sensible to stress to the applicant that there is no guarantee of registration being achieved.

It should be noted that the same duty is placed on an authority when it is proposing to remove a registered person from the register. Further information on both of these scenarios is provided in section 3.6 Provision of information and advice.

3.5 PROCESSING AND CHECKING APPLICATIONS

Key Points:

• Clear lines of decision making should be established locally
• Robust processes are needed for all aspects of delivery, including application processing and enforcement
• Local authorities should have a process in place to manage the workload volume effectively
• There are three main stages of processing applications:
  • Validation: the process for checking applications are complete and paid
  • Scrutiny: the process whereby a person is assessed as fit and proper
  • Decision: making a decision to register a person or refuse an application
• Local authorities should consider setting local timescales for processing

This section describes the administrative arrangements for dealing with applications. Those arrangements need to be established within a broader policy framework.

Setting the framework

Arrangements for registration should be placed in the context of the authority's strategic approach to improving the private rented sector and ensuring it plays a full part in providing for housing need. Registration has the potential to bring benefit to other service provisions such as homelessness and social work, and, by the same token, a corporate commitment and effort towards making registration work is desirable. This can be through, for example, the provision of information to registration administrators and joint cross-departmental working.

It is important that local authorities have clear processes in place for administering the registration scheme. This includes processes for dealing with any backlog of applications, processing new applications, and handling renewal applications. Robust enforcement processes are a key part of this process.

• Defining the level of authority to approve and refuse applications

The level of authority required to approve and refuse applications for registration is a decision to be taken by each local authority at its own discretion. Each local authority should determine its own procedures and protocols in respect of the delivery of landlord registration, making sure that established decision making processes are in place.

Routine decisions should be delegated to officers. Scrutiny of applications may be reserved for officers, with the final decision being made within the department with the lead management responsibility.

Refusing an application or revoking a registration will have serious consequences for the owner or agent as well as for the tenant. Each council should form an appropriate committee or sub-committee of elected members to constitute the forum in which to assess the recommendation and strength of the supporting evidence presented by officers and make a decision accordingly.

The scheme of delegation will also need to take account of the online application system, which recommends for approval applications which are not flagged for further investigation. This does not remove control from the authority as it decides which applications to flag and, in any case, the notification to the applicant is issued by officers, not the IT system, giving the opportunity for sample checks or for reconsideration of cases where necessary.

• Monitoring and review of performance

Local authorities will want to monitor progress with registration at a local level; this can include using statistics from the online system.

The Scottish Government is able to use statistical data from the application system to monitor the implementation of registration, but may seek further information from local authorities, for example on enforcement. .

• Landlord Registration Networking Group

The Landlord Registration National Networking Group has demonstrated the benefit of local authority officers meeting together in a forum to share experiences, discuss problems and suggest solutions. The Scottish Government is grateful to local authorities continuing to contribute to this group.

Processing Applications

It is important that a consistent approach to processing and deciding on applications is adopted across local authorities. As well as landlords owning properties across more than one authority area, there are letting and estate agencies with lettings departments operating in a regional context.

Although local authorities have diverse corporate management and organisational structures, the administrative process for registration should aim to follow the procedures and tasks recommended in this guidance.

Common to all authorities is the core of the application process, namely the central, internet-based, IT system provided by the Scottish Government. It allows applicants in every local authority area to make an online application directly through the dedicated registration website at www.landlordregistrationscotland.gov.uk. Local authorities should provide a link to the application system from their own websites.

Where possible, applicants should be encouraged to use the online registration system. In the main, this is more efficient in terms of local authority staff time, as well as more convenient and cheaper for applicants with internet access and multiple properties. Applicants should be informed of where they might gain access to the internet, such as local libraries and of any practical support with applications that the authority can give to people who have difficulty accessing or making use of the internet. Applicants should also be informed that the appropriate payment will be due at the time of making an online application.

Local authority officers are able to manage registration data for their authority from any computer with internet access. No additional software, connections or security settings are required. 'Role-based security' is used to assign appropriate privileges to each user, who will be recognised from their user account and password when they log in. Account details must be kept secure to prevent unauthorised use of the system.

Annex 4 provides more detail on the operation of the online system.

The main functions in processing applications from their point of receipt to the outcome decisions are:

• managing the workload volume effectively
• managing paper application form submissions
• ensuring valid applications have been submitted
• scrutinising the valid applications
• reaching the decision to register or not to register an applicant

• Managing the workload volume effectively

Local authorities should use the data available from the online system to manage the volume of applications effectively. Data on the flow of applications can be used to anticipate likely volume of renewal applications, therefore allowing local authorities to plan appropriate staffing to avoid a backlog of work from building up. It is important that other key functions relating to registration are built into workplans. This includes effective enforcement of the scheme, for example, identifying unregistered landlords and taking action to ensure compliance with the legislation. Local authorities also have a duty to provide advice and assistance to both landlords and tenants. This duty should be considered in any workplans.

The stages in processing applications are described below:

• validating
• scrutinising
• decision-making

The IT system automates the validation checking procedure - all paper application information should be entered into the online system by the local authority, allowing the automated checking to validate paper-based applications alongside applications entered online by the applicant. A valid application is one that has all mandatory fields completed and for which the correct fee has been paid, based on the information in the application. Validating all received applications is a first priority, since it allows landlords to operate legally.

For validated applications, where no grounds for concern are identified from the specific information in the form or from any matching test against critical information held on the on-line system, the registration for those 'clean' applicants will automatically be processed electronically. The system notifies the authority of a 'pending approval' which the authority can normally issue at that point, manually marking the application as 'approved'.

There should be no significant delays in the system of approval for these applications. Where local authorities wish to use confirmation letters for online applications, applicants should be encouraged to return these quickly to avoid delays.

For those applications that have been diverted because of concerns, each authority should establish a clear basis for prioritising the scrutiny and possibly more extensive investigative work that could follow for some applicants. Such applications will be delayed, but for sound reasons. It is important that a clear process for decision making on such applications is established to allow for the applications to be processed once investigations have been concluded.

Undue delays on the processing of all diverted applications should be avoided. Local authorities may wish to prioritise activity on diverted applications in the following way:

• those owners or agents that officers judge give rise to the most serious concerns and which involve letting to sitting tenants (who are potentially at greatest risk)
• agents who give rise to any degree of concern, as they may be acting for, or intending to act for, a number of owners if they become registered
• prospective landlords or agents (i.e. applicants who declare no houses) since their business decisions are likely to hinge on the authority's decision. Undue delays should be avoided to prevent any impact on supply

• Managing paper applications

An application can be submitted online or as a paper application. Currently, around 75% of applications are made online with the remaining applications paper-based, but each authority should be geared up to handle these efficiently.

The authority should not have two parallel data bases (paper and electronic) as this is a recipe for confusion, duplication and oversight. Paper application data should be entered into the online electronic system to create a single list of private landlord, agent and property information. This has the added advantage that the system will then check and process the application in the same way as for online applications.

Data inputting staff will need to transfer the information in a paper application to the online system and carry out procedures to accept payment by cheque or cash and mark that on the system.

Data inputting errors could have serious consequences for the applicant and waste officer time, so it is advisable to carry out a cross-checking exercise on the accuracy of the input data once a batch of manual data input work has been completed.

• Ensuring valid applications have been submitted

It is important to distinguish validation from scrutiny.

Validation is the basic process of checking that all the required mandatory information has been included in the application form and that the correct fee in relation to the number of correctly included properties has accompanied the application. This does not mean all the information is correct or accurate. There may be falsely declared information about the applicant's personal details, convictions, agent identity or number of let properties, in which case, an offence has been committed that could not only incur a fine, but would also stand as a contravention of housing law to be considered in the subsequent scrutiny involving the fit and proper person test.

No offence is committed if a property is let whilst the owner's application for registration is being considered. To be considered, the application must be valid. This means that an applicant will need to be notified promptly that their application has been received and accepted as valid.

The online system will not accept an application, and allow payment to be entered, unless all mandatory fields have been completed. Where the application is made online, once it is completed and paid, an electronic acknowledgement will be provided, confirming that the application is valid.

For paper applications, where there are omissions or errors, local authorities should have clear processes in place to contact the landlord or agent as soon as possible (by letter, email or telephone) requesting the outstanding requirements. It should be made clear that the application cannot be treated as valid (and therefore is not protecting the applicant against committing an offence by letting without a valid application) until all the outstanding data is provided. If an applicant fails to provide information when requested to do so by the local authority then the local authority should reject the application as invalid and take appropriate enforcement follow-up action.

If a paper application has been submitted without payment, or the fee calculated is incorrect, the local authority should take steps to obtain payment or to correct the payment made. This could involve writing to, emailing or 'phoning the applicant. The application should not be entered onto the IT system until the correct payment has been received. If payment is not received then the local authority should reject the application as invalid. The implications of this should be explained to the applicant. It should not be possible for applicants using the online system to submit their application without at the same time paying the fee.

Once a paper application has been accepted as valid and paid, written confirmation should be sent by post.

• Scrutinising the valid applications

Scrutiny is the process whereby the person is assessed to discover whether he or she is fit and proper to carry out residential letting.

Ministers are clear that registration should be a 'light touch' process. It is recognised that the majority of landlords do provide a good service and that many might leave the market if regulation is perceived as too onerous or expensive.

A relatively straightforward 'check' is to match landlord applications against any information held within an authority on cases of antisocial behaviour, breaches of landlord-tenant law and complaints from tenants or neighbours. The authority must be confident that information used in this way is credible and not spurious or malicious. Effective use of the online review list will assist with this.

The basic approach to the review list is:

• compile a list of the names of landlords and addresses of residential properties where such breaches and complaints have been recorded
• upload the list to the registration IT system
• where either a name or an address in this list matches those provided in an application, the IT system will automatically divert that application for individual processing

Any discrepancy between the information on the form and the information held by the local authority could prompt checks on other items as well. The authority may wish to seek a Basic Disclosure from Disclosure Scotland in order to be able to check the applicant's declaration about convictions. This would normally only be worthwhile if the authority had reason to doubt whether the applicant's declaration was true.

Local authorities can request information on both spent and unspent convictions for the purposes of fit and proper checking activity. Information on spent convictions is only required to be included in a person's application if it is specifically asked for. The online system explicitly asks for details of both spent and unspent convictions. Local authorities may wish to adjust paper application forms locally to include this information.

Some authorities may wish to carry out occasional spot checks by extracting a sample of applications at random and following up each of the mandatory answers for verification ⁷ . When selected landlords are contacted they should be told that they have been chosen on a random basis, not on the basis of suspicions.

The key purpose of collecting the mandatory information is to confirm if the applicant is a fit and proper person to be engaged in residential letting. The next section provides guidance on how authorities should go about that task.

• Reaching the decision to register or not to register an applicant

There are no automatic or mandatory criteria for deciding whether to approve or refuse an application. If the applicant is judged a fit and proper person for the purpose of registration, then that person should be registered. If not, the person should not be registered. It is important that local authorities have processes in place to allow these decisions to be reached.

If it is possible that by taking certain specific actions a person could become acceptable for registration, then, on a balance of risk and benefit, the person could be registered. Such cases must be closely followed up to ensure that the required action is taken. If the landlord fails to act as required, he or she should be taken off the register. Guidance on how to approach the fit and proper person test is provided in section 3.4 The fit and proper test.

There is no mandatory timescale within which to decide on validly submitted applications. However, setting timescales for registration is recommended as this will provide both discipline and a structure within which registration officers and others who have an input into the process should aim to work.

Recommending timescales to local authorities from a national perspective must be viewed as tentative. Only overall, indicative, processing timescales are sensible and these have to vary according to the process route an application follows. Authorities should consider the viability of the following suggestions for target processing times by reference to the flowchart in Annex 7.

From date of validation of an application to:

• date of notification of approval of an application that is not on the local authority database: 1 month
• date of notification of the refusal of an application that is on the local authority database and from which there are sufficient grounds to refuse without further checks considered necessary: 3 months
• date of notification of approval of an application that is on the local authority database but for which there are no doubts about approving: 3 months
• date of notification of approval of an application that is on the local authority database and for which further checks are carried out including Disclosure Scotland results, but the conclusion from which is that there are not sufficient grounds to refuse approval: 6 months
• date of notification of rejection of an application that is on the local authority database and for which further checks are carried out including any Disclosure Scotland checks, the conclusion from which is that there are sufficient grounds to refuse approval: 6 months

It should be noted that the maximum period for processing and deciding on the more onerous regulation of an HMO licence is 12 months, but that is to allow for possible physical alterations to be made to the property to meet licensing conditions. That does not apply with landlord and agent registration and the maximum timescale suggested above of 6 months corresponds with that used in most other types of licensing situations. However, the volume of cases will also be a factor for some authorities.

Amendments to an applicant's registration information

A registered owner who initially self-manages a house but subsequently decides to appoint an agent to take over the management function must inform the local authority of the change. An amendment must be made to the owner's application to ensure that the agent is listed with the owner on the register. Owners can amend all their own information online.

If a registered owner cancels the appointment of an agent, the owner must inform the local authority. Agents could also perceive it as being in their best interests to ensure the authority is aware of a change, so that no future problems associated with the management of a particular house are attributable to them.

Where an applicant requires to add an additional property to his or her record, the additional fee would be charged for this.

No charge will be made for other amendments, for example, a change to a landlord's contact details. Landlords using the online system can update their own information online, with no resource implications for the local authority. Where any amendments require to be made by local authority staff, it is likely that the costs involved in seeking payment would negate any reasonable charge which might be made. This approach is therefore discouraged.

3.6 PROVISION OF INFORMATION AND ADVICE

Key Points:

• Local authorities have a duty to provide advice and assistance to landlords and tenants in certain circumstances.
• Local authorities also have a duty to provide advice on letting practice or landlord registration to tenants and prospective tenants when an enquiry is received.

This section details the responsibilities of local authorities as regards the provision of information and advice to landlords and tenants.

It has been recommended (section 3.2 Identifying landlords) that local authorities should undertake publicity as part of landlord registration.

In addition, local authorities are required by regulations to provide information and advice to landlords and tenants in particular situations.

Advice to landlords

• Good practice information to applicants

Information on what constitutes good practice in letting properties should be provided to each applicant at some stage in the process leading to registration or on registration. An appropriate stage could be the issue of the notification that the applicant's registration has been approved, if it has not been necessary to enter into dialogue with the applicant at an earlier stage of assessment.

This could be achieved by providing applicants with links to suitable advice on the internet such as sections 1, 2 and 4 of the ' National Core Standards and Good Practice Guidance for Private Landlords and for Local Accreditation Schemes' which can be found at http://www.communitiesscotland.gov.uk/stellent/groups/public/documents/webpages/hmcs_017006.pdf Other appropriate advice is available from organisations such as Scottish Association of Landlords or ARLA and other support services in the local authority area may be in a position to assist with suitable information.

As not all landlords will have internet access, authorities should consider providing hard copy extracts of guidance to applicants. The Scottish Government also publishes housing information and rights guides for private landlords and tenants, copies of which can be obtained from the Scottish Government Private Rented Housing Team (0131 244 5528) or by downloading them ⁸ .

Some authorities may have their own 'good landlord' guidance as part of a local accreditation scheme or for their HMO licensing scheme. Any of these sources could be relevant to providing guidance on good lettings practice.

• Advice in relation to refusal of registration or de-registration

Where the authority proposes to refuse to register an applicant or to remove from the register an already registered person, and if it considers that the applicant or registered person may be able to take steps to achieve registration or to prevent de-registration, then it must provide appropriate advice on what steps could be taken.

The advice will depend on the basis on which non-registration or removal from the register is being considered but could cover failings in relation to tenancy or property management. In such a case, the applicant could be pointed to the Good Practice Guidance for Private Landlords, mentioned above.

The best advice may be that the person seeks legal assistance, for example, to draw up a legally correct tenancy agreement (though a model short assured tenancy is available at section 3 of the National Core Standards guidance).

In other cases, the best step may be to employ a suitable agent and hand over management responsibility to that agent. Although this may involve extra cost it may be the most appropriate way to ensure that the tenancy is handled in a fit and proper manner and that the tenant's interests are properly protected.

Landlords who face de-registration should be made aware of the consequences of this for their legal situation in the letting market, as well as resultant issues, such as insurance cover on the property.

Advice to tenants

There is also an obligation on local authorities to provide tenants and other occupants with advice and assistance in particular situations.

There may be an impact on a tenant's continuing security of tenure where a local authority:

• rejects an applicant's registration
• removes a registered person from the register
• applies a Rent Penalty Notice

None of these three types of action by an authority gives a landlord or agent grounds to evict a tenant. However, if occupation is on the basis of a Short Assured Tenancy (which is the predominant form of tenancy in the private sector) the landlord is entitled to end the tenancy at its proper term without specifying grounds, instead of rolling it forward to the next rental period (by "tacit relocation"). The same may apply to an Occupancy Arrangement, depending on its terms. The local authority's action might result in the landlord ending such a Short Assured Tenancy or Occupancy Arrangement earlier than might otherwise have been the case.

Information to tenants should emphasise that the action taking place relates to the landlord, not to the tenant. The tenant's security continues until the tenancy ends (or there is a breach of the terms of the tenancy during the tenancy allowing the landlord to seek a court order to remove the tenant), and the landlord or agent must use lawful means only to bring the tenancy (or occupancy) to an end otherwise a criminal offence will have been committed.

The landlord should not assume that eviction is the only route if registration is refused or removed. One option is to sell or otherwise transfer ownership to a person who will be judged fit and proper, whilst the sitting tenant remains in place. The local authority will need to be satisfied that control of the property has been genuinely transferred and that the previous owner is not acting as an unfit agent. There may be other options by which the landlord could become registered (see section 3.4 The fit and proper test - landlords, agents and the fit and proper test).

Not all landlords are aware of the law; some may look for 'shortcuts' in the legal process. It is therefore essential that all tenants and occupiers affected by decisions not to register an applicant, to de-register a registered person, or to apply a rent penalty, have clear, easily understood information and advice on their housing options. They may also need assistance should the landlord attempt to remove them from the property illegally.

Where a rent penalty is imposed, the landlord may seek to obtain money from the tenant(s) despite the suspension of the legal liability for rent. The local authority should monitor situations where this penalty is used, referring any evidence of harassment or illegal eviction to the Procurator Fiscal and providing advice and assistance to tenants as appropriate. This is particularly important when tenants are from vulnerable groups.

When a local authority refuses or removes registration from a landlord or agent, notification must be sent to the occupants of the properties involved. With a rent penalty notice, the local authority should serve the Rent Penalty Notice on the occupants of the house or residential properties to which it applies, provided it knows them, but failure to do so will not invalidate the notice.

A local authority that has rejected an applicant's registration or removed a registered person from the register is obliged to provide to the occupants in each house that is identified in the application form or on the register, advice and assistance on:

• security of tenure
• sources of money and benefits advice
• homelessness services
• the homelessness duties of the local authority

The requirement is to provide the information to the occupants of the house. The local authority will therefore not be in breach of this requirement if it is unable to establish who is formally the tenant in a given situation.

Advice and assistance must be provided to tenants and occupiers as soon as is practicable after the decision is taken by the authority. That advice and assistance should also be relevant to their circumstances. General materials which include the particular circumstances may be suitable, but the local authority should take steps to make sure that this is so, as those who have difficulty in using complex material can be the most vulnerable.

The Scottish Government has developed materials that should be suitable as the core of such information provision.

The same advice and assistance should be provided to occupants when the landlord is served a notice that no rent is payable on a residential property. The details about the service of Rent Penalty Notices are covered in section 4.3 Sanctions which also deals with the need for advice on setting aside money if the landlord appeals.

General advice to tenants and prospective tenants

In addition to the above duty, where a tenant or prospective tenant approaches a local authority to enquire about letting practice or landlord registration, the local authority must provide the person with general advice in relation to those matters ⁹ .

The provision of advice could include supplying the person with leaflets which are specific to their own situation or query.

3.7 PASSPORTING APPLICATIONS AND AVOIDING DUPLICATION

Key Points:

• Where a landlord holds an HMO licence they are exempt from paying the principal registration fee in the local authority area in which they hold that licence. The property fee will not be payable on HMO licensed properties.
• Local authorities can take steps to passport HMO licence holders onto the landlord register.

This section deals with the management of applications in respect of HMO-licensed properties.

The key point for consideration is whether a landlord has already been recognised as fit and proper to be letting houses. Where a landlord holds an HMO licence, the landlord will be fit and proper for the purposes of registration and may be passported to the system. This passporting means that the landlord will not require to pay the principal registration fee in the local authority area in which the licence is held. The additional property fee will not be payable on HMO licensed properties.

• HMO licensing and landlord registration

HMO licensing has been in operation since October 2000 and incorporates an assessment of whether the owner, as applicant, is a fit and proper person to hold a licence.

HMO licensing is a stricter regime than registration and focuses on the house as well as its management by a fit and proper person. In contrast to registration, an HMO licence is specific to the house. It is possible for an owner to be registered as fit and proper but not granted an HMO licence for a house due to serious problems with the condition of the property. That owner could still obtain a licence for another house that meets all the local standards laid down by the authority. It should not be possible for an owner to be denied landlord registration but granted an HMO licence.

The linkage and information transfer between HMO licensing and landlord registration is crucial to the success of both systems of regulation. Details of the procedures to be followed are included in Annex 2 .

• Passporting registration information between authorities

The landlord register is the responsibility of each local authority in relation to its area. Whilst there is a centralised IT website, there is no national register. Where an applicant (or a person already registered by one authority) owns or manages rented property in other areas, officers in different authorities can communicate with each other directly about application information, the fit and proper person test and decisions (while respecting any data release restrictions that may apply with certain types of information).

Each local authority must make its own decision on each application for registration which it receives. Local authorities may however make use of all information available to them, including that shared with them by other local authorities, in reaching that decision.

3.8 THE REGISTER

Key Points:

• Local authorities are required to maintain a register of landlords
• All landlords and agents will automatically be placed on the register when approved
• Limited information is available to the public
• Details can be withheld from the register in some circumstances

This section deals with the content of the landlord register and the release of information.

Local authorities are required to maintain a register of landlords and agents who are considered fit and proper persons to let a house under a lease or occupancy arrangement.

Registration lasts for three years and information on the person and their residential properties for let is held on the register (see Section 3.3 Information from applicants).

The release of information to members of the public is circumscribed with the aim of ensuring that the information is not used for malicious or commercial marketing purposes or would not, if released, represent an unacceptable intrusion in a registered person's private life. There is no requirement for the local authority to make the register as a whole publicly available. Section 88A of the 2004 Act makes some provisions about the release of information from the register. Local authorities must also take into account the Freedom of Information (Scotland) Act 2002 and data protection principles.

Access to the register in a local authority's area is, in legal terms, by application to the local authority. In the great majority of cases this is done by accessing the website, without any need for the involvement of local authority staff. In accordance with section 88A(1), the website enables a member of the public to request information with respect to a particular residential property or a particular person. The website does not enable visitors to obtain lists of registered persons or houses in the local authority's area.

- where information is requested about a particular property, the website will automatically provide:

• the name of the owner if the house is listed on the register
• the name of any person listed on the register who acts for the owner in relation to that house
• the contact address on the register to which correspondence with the owner or person who acts for the owner can be sent

- where information is requested about a particular person, the website will automatically confirm whether that person is on the register. In order to identify the correct person, the address of that person also requires to be entered.

If the website fails to provide such information, for example because of restrictions on searching manually-entered addresses, local authority staff should provide it routinely on request. The website will direct any queries to the relevant local authority contact.

A member of the public may ask for more information than listed above, by application to the local authority. Local authorities should be aware of the distinction between information entered on the register, under section 84(5) of the 2004 Act, and the additional information which is required to be provided as part of an application for registration. Much of the latter information may be sensitive, being intended to help the local authority determine whether the applicant is a fit and proper person, or whether they are entitled to discounts on the application fee. Any request for information other than that required to be released under section 88A(1) must be considered in accordance with Freedom of Information requirements. Information is exempt from release if its disclosure would contravene any of the requirements of the Data Protection Act 1998.

Where the authority is concerned that release of any information on the register about a property or registered person may jeopardise the safety and welfare of any person, or the security of any premises (e.g. a landlord's home as well as any listed house), then it can withhold this information from the register. Such information can be flagged in the IT system so that it does not appear as a result of a web-based enquiry. The types of cases where this approach is desirable include, for example, women's refuges and halfway housing, where the identity of the owner would indicate the nature of the accommodation and could lead to harassment by, for example, estranged partners or prejudiced neighbours.

Local authorities may feel that this approach is appropriate in some other cases and should be prepared to consider restricting information in this way on the application of an individual, if they feel that the case merits such a restriction. The legal test relates to whether provision of that information would be likely to jeopardise the safety or welfare of any person, or the security of any premises.

Local authorities should seek to ensure that all relevant staff are properly trained to avoid any inadvertent disclosure of inappropriate information by telephone or other means.