Wednesday, May 6, 2015

News: Rotherham landlords lose licensing legal challenge

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Landlords in the Rotherham borough hoping to stop the introduction of a mandatory selective licensing scheme have seen their legal challenge fail at the High Court.

Rotherham Council has designated four areas as Selective Licensing areas. The designations came into force on May 1 2015 and will last for five years. The areas are: Eastwood, Masbrough, Dinnington and Maltby South East as these have been deemed, or are likely to become, areas of low housing demand.

Following consultation, the council's cabinet approved in December 2014 the licensing of privately rented properties in selected areas with the aim of improving conditions for local tenants and the surrounding community. This was despite the council's own Improving Places Select Commission preferring a landlord led, voluntary, borough-wide, quality landlord scheme as an alternative to mandatory selective licensing.

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Selective licensing requires all private rented properties within a designated area to be licensed. Certain standards and conditions are required to be met in order for a licence to be granted. Failure to meet such conditions and standards may result in prosecution and/or the making of a management order which will transfer responsibility for managing the property to the council.

The consultation results showed 63% of the total respondents were in favour of the proposals, with the vast majority of those in support being residents. Concerns over the costs of licences were raised, predominantly from landlords, that the licensing fee per property (around £600) is too much. Also that, expecting payment upfront, would severely affect landlord's businesses.

Concerns were also raised regarding geography, the other powers that the council could use to tackle related issues such as antisocial behaviour, the mandatory nature of the scheme, the potential negative impact on the housing market and the capacity within the council to enforce the scheme.

Andrew Lane, instructed by Bury & Walkers LLP, took the case of the legality of Rotherham Council's decision to the High Court on behalf of the Rotherham Action Group Limited, a newly formed company that brings together members and non-members of the Rotherham District Landlords Association (RDLA).

Permission was granted to bring a claim for a judicial review of how the local council implemented its selective licensing policy on the grounds that the council "has failed to properly or at all consider whether there were other courses of action available to them." A judicial review is a type of court proceeding in which a judge reviews the lawfulness of a decision or action made by a public body.

Because the proposed start date of the scheme was May 1, an interim injunction was also considered that would restrain the council from proceeding with the scheme pending a full challenge.

Jonathan Manning and Justin Bates from law firm, Arden Chambers represented the local authority and the judge had witness statements from Maurice Healey, chairman of Rotherham & District Landlords Association, Paul Benson, housing officer at Rotherham Council, Carl Agar, local representative of the National Landlords Association (NLA), Matthew Finn, community protection manager at Rotherham Council, and Cllr. Maggie Godfrey, the then cabinet member who had responsibility for the proposed Selective Licensing Scheme.

The legal arguments heard by Mr Justice Stewart last month centred on whether the decision by the Council's cabinet was perverse or irrational. Transcripts of the December meeting were used to show the six reasons why a mandatory selective licensing scheme was chosen over a voluntary scheme, despite the earlier recommendation of the Improving Places Select Commission.

Mr Justice Stewart concluded: "The test is not whether cabinet had a sound and clear basis to pursue a different course from that previously recommended. I therefore consider the six reasons given by Councillor Godfrey against the backdrop of the December 2014 report. I do not regard there being any perversity and/or irrationality in cabinet, on the basis of that reasoning, choosing a mandatory scheme over a voluntary one, having considered the voluntary scheme. Looked at on their merits, they are cogent reasons for preferring the mandatory scheme.

"As I put it in argument, it was decided that heavy artillery in smaller areas with more intensive problems was more effective than lighter artillery over a wider area containing both these areas and others with fewer problems. In addition, such a response was more proportionate. In those circumstances the claim must fail."

Rotherham Council website

Images: RMBC

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