EXPLAINED: Landlord, tenant and property registers... are they worth the effort?

Thursday 01 June 2023

A £14,000 study commissioned by Government into whether the island should have an accessible digital register of landlords, tenants and all commercial and residential properties in the island has suggested that the idea would not be worth it.

Such registers had been touted as a way of working out if there were anti-competitive forces at work in the housing market, assist with transparency, and better hold landlords to account.

A study into how feasible the idea would be was commissioned by the previous Government prior to the election, with a resulting report put together in November 2022.

Released for the first time this week, it concludes that, if there are genuine concerns about "foreign ownership or market manipulation", it may "make sense to try to identify it by exception through investigative work" or "one-off" information gathering exercises.

Noting that part of the rationale for a digital register was about "improving the availability and standard of rented dwellings", the report also emphasises that the "new States Assembly is focussing even more on the housing market and pricing of housing in the buying and renting markets", adding: "There is more willingness in the new Assembly to intervene if necessary and to look again at licensing landlords and to identify where properties are owned by people who are not Jersey resident, and not used for housing locals."

Express took a closer look at the report and its findings...

Why was the report commissioned?

The report by Tim Baker of TCB Consulting Ltd was commissioned before last year's election at a cost of £13,969.25.

It looks at the feasibility of two propositions which were both approved by the previous States Assembly.

The first proposition was brought forward by former Deputy Rowland Huelin and asked the Council of Ministers to investigate the Island's existing housing and lodging homes legislation, in order to determine whether it could be used to establish a digital register of landlords and tenants, covering:

• Qualified accommodation;

• Registered accommodation;

• Lodging houses;

• Lodgings in private dwellings

Deputy Huelin argued that there was "unquestionably" a need to determine the number of rental properties in the Island and the number of occupants in each property.

Pictured: Deputy Huelin estimated in his 2020 proposition that there were around 15,000 tenants in the island.

"My understanding is that there are approximately 15,000 tenants currently in Jersey (including those with Andium Homes). Furthermore, as a society, we need to ensure that the rental properties are safe and not damaging to the physical and mental health of the tenants," he said.

The latter proposition was brought forward by former Deputy Mike Higgins. It asked the Council of Ministers to create a digital register of all commercial and residential properties in the Island "that contains details of the ultimate beneficial ownership of those properties for the purposes of aiding policy formation and if necessary the regulation of the housing and commercial property markets".

Pictured: Former States Deputy Mike Higgins brought P.93 before the Assembly in 2020.

Mr Baker's report states: "Both of these propositions were aimed at improving the availability and standard of rented dwellings in Jersey. In the two years since they were approved, the world has moved on including a change of States Assembly. The new States Assembly is focussing even more on the housing market and pricing of housing in the buying and renting markets."

It continued: "There is more willingness in the new Assembly to intervene if necessary and to look again at licensing landlords and to identify where properties are owned by people who are not Jersey resident, and not used for housing locals."

But what do we have at the moment?

The report states that the current systems in Jersey "lack information" about housing in the island...

"There is good quality information available, which is maintained actively and improved continuously, about properties in Jersey in the form of the Jersey Land and Property Index (JLPI). Other information about housing is piecemeal in different departments. There is no central source of truth, in an electronically readable form, about the beneficial owners and tenants of property," it adds.

So how would registers help?

The report explains: "The register of beneficial ownership of properties can help by uncovering whether there are 'big players' monopolising large parts of the housing market aiming to control sale and rental prices and whether the beneficial owners are non-locals removing housing from the stock available to locals."

It continues: "The register of Landlords can provide a receptacle for all information related to landlords renting out residential property in Jersey. There is already a team in Environment and Consumer Protection, part of Infrastructure, Housing and Environment tasked with identifying landlords.

"Such a register could significantly help their work and start to build a unified picture of rented dwellings in Jersey."

A straightforward but "time consuming" process

Mr Baker's report notes that a register of properties already exists in the form of the Jersey Land and Property Index (JLPI) and that creating a register adding beneficial ownership of each property "will be straightforward enough".

"It is a question of creating a register to contain the beneficial ownership information together with a UPRN [unique property registration number] that links it to the JLPI," it continues.

"For the majority of properties, where the beneficial owner is the same as the buyer recorded on the contract of sale in Pride [the Island's Public Registry Index and Document Enrolment database], gathering beneficial ownership information will be a straightforward if time consuming process. It is a case of a human reading through the contract of sale scanned onto Pride and transcribing the name on the contract into the register of beneficial ownership."

But is it worth the effort?

The report concludes: "In the case of beneficial ownership of more complex structures such as companies and trusts, it is likely to be difficult and time-consuming to ascertain the beneficial owner because it will require the involvement of the JFSC for companies and may not be available at all for trusts and difficult to keep up to date.

"There is also no obvious trigger that would prompt the keeper of the register of beneficial ownership about a change in beneficial ownership for example in the case of changes to beneficiaries of a trust. A better way to satisfy the objective may be to perform a one-off exercise, perhaps run by Statistics Jersey, to investigate beneficial ownership of those properties not owned by local individuals."

Deputy Higgins had previously suggested that creating the sort of register he proposed would cost around £500,000, covering the set-up and "one or possibly two additional staff" to maintain it.

However, Mr Baker's report said: "..It is not feasible that the register could be made and kept accurate, especially in the case of the more complex beneficial ownership structures which are precisely what this register is aimed at. And the question is whether the cost is worth the benefit given the objectives are unlikely to be achieved and there is already another mechanism in place to provide the same information if and when required to support policy and possibly legislation."

So, what next?

While the report itself does not represent the government's views, it could be used to inform future debates and policy discussions – potentially influencing decisions made by the States Assembly.