Communities and Local Government CommitteeFurther supplementary written evidence submitted by Bristol City Council

LICENSING AND MEETING THE “FIT AND PROPER PERSON TEST”

Summary of Issues with “Fit and Proper Person” Definition

Where licensing of rented properties applies a key power Councils have to tackle the root cause of poor management and housing conditions which may effect tenants and residents is whether the landlord or agent is “Fit and Proper” to manage a rented property.

When deciding whether to grant or refuse a licence the Council needs to decide whether someone is a “fit and proper person” (section 66 & 89 Housing Act 2004) to manage the property. We can also revoke a licence if we become aware of issues which may effect someone’s “Fit and Proper” status.

As well has having a major impact on tenants and residents, a decision that a landlord or agent is not fit and proper has a significant impact on their business. This can range from an individual with on licensed property to a management agent with several hundred properties where a part or whole of their business may be dependant on being “fit and proper”. A decision that a person or company is not fit and proper may also have an impact on other parts of a person’s business such as being a company director or appointment as a public trustee.

Local Authorities can also decide a person is not “Fit and Proper” as a result of them being associated with persons who would not be considered “Fit and Proper” and that would effect the management of a rented property.

The combined effect of the impact of a decision on whether someone is fit and proper means that Local Autorities must be cautious when making a decision that someone is not “Fit and Proper”. Decisions must be evidence based, reasonable and proportionate. Otherwise, in our experience, there is a high risk of expensive and damaging litigation such as Judicial Review and or Libel action.

Summary of Proposed Improvements

There is no central register of decisions that a person has been found not to be “Fit and Proper” so a landlord or agent with properties across the Country may hold a “Fit and Proper” status in one area but have been refused in another Local Authority Area.

Whilst Bristol has its own policy on “Fit and Proper Persons” but Local Authorities have been provided with no formal guidance by Government on Licensing under the Housing Act (draft guidance was drafted but never adopted).1 This lack of guidance on critical areas reduces the effectiveness of the legislation and Parliament’s wish for Councils to tackle poor management in licensed properties.

In particular guidance on the following is essential:

How to approach decisions where multiple properties are owned or managed and where there is multiple ownership a property.

The weight given to convictions or contraventions under Housing and other legislation. Eg If someone has been prosecuted for running an unlicensed property, would it in principal be proportionate for an Council to consider deciding someone is not fit and proper (We appreciate each case must be judged on its own merits).

How to consider whether a legal entity such as a limited company is “Fit and Proper” including directors interest in other companies involved in licensable properties.

March 2013