Sadly, the article detailing the landlord hit with a hefty fine for poor management of their property has becoming a regular feature in the Landlord University newsletter, as well as the sector and national press. Whilst these individuals in no way represent the majority of hard-working, rule abiding majority, it is clear to see why the term ‘rogue landlord’ has become so common place.
In April 2017, local authorities were handed powers to try and stamp out such roguish behaviours, with the ability to dole out hefty civil penalties, rent repayment orders and banning orders. Civil penalties seem to be the favoured method of penalty for local authority, carrying a maximum fine of £30,000 per offence.
As well as being a costly deterrent, civil penalties can also leave you with a permanent blot on your landlord copybook (and your wallet). If a landlord received two or more civil penalties over a 12 month period, local authorities may include that person’s details in the database of rogue landlords and property agents. While it is not compulsory, local housing authorities are strongly encouraged to do so, in a bid to help ensure that other councils are made aware that formal action has been taken against the landlord. Additionally, a civil penalty on your permanent landlord record can be taken into account when you are being considered to be a ‘fit and proper person’, one of the conditions required when applying for an HMO licence, or any other property subject to licensing.
Is giving councils this power likely to work?
Apparently so. Previously, the only way councils could bring a rogue landlord (or letting agent) to account would be to prosecute them, often through a lengthy court process. With the introduction of civil penalties, RROs and banning orders, the government hope to ‘disrupt their (landlords) business model’, thus putting a stop to poor behaviour. Council have the power to keep the fines that they collect, on the proviso that they are invested back into housing, so the theory is that ‘bad money’ will go after good…
Following the introduction of civil penalties in place of prosecution, it was made very clear by ministers why the fines were set at the rate they were. Put simply, any lower and they didn’t feel they would be enough of a deterrent! Speaking in the House of Commons in 2016, Marcus Jones MP said:
‘It is important to raise the level of civil penalty to £30,000, because a smaller fine may not be significant enough for landlords who flout the law to think seriously about their behaviour and provide good quality, private sector rented accommodation for their tenants’
What would I have to do to be fined?
Hopefully, you won’t be doing anything that would land you with a fine!
Local housing authorities will be able to impose a civil penalty as an alternative to prosecution for the following offences under the Housing Act 2004:
- Failure to comply with an Improvement Notice (section 30)
- Offences in relation to licensing of Houses in Multiple Occupation (section 72)
- Offences in relation to licensing of houses under Part 3 of the Act (section 95)
- Offences of contravention of an overcrowding notice (section 139)
- Failure to comply with management regulations in respect of Houses in Multiple Occupation (section 234)
The industry regularly sees fines handed out for poor management of properties in accordance with HMO guidelines – it is likely that this will become more prominent with the introduction of the new HMO legislation due to land later this year. Other common fines involve poor management of properties, generally focussing on when your tenant’s safety is at risk. A full overview of your safety responsibilities, is available in the free Landlord Safety Seminar webinar, in association with the NLA here.
How much could I be fined?
The maximum penalty is £30,000, but this is only for the most severe issues and the worst offenders. The fines are set on a sliding scale, with no minimum.
The amount of penalty to levy against any offence is determined by the local authority on a case-by-case basis. The team investigating the issue has to take into account the severity of the case an the landlord previous record of offending.
The following factor must be considered:
- Severity of the offence. The more serious the offence, the higher the penalty could be.
- Culpability and track record of the offender. There is a chance of a higher penalty is the landlord has a prior history of not fulfilling their legal obligations, especially for the same of similar offences. If the actions that lead to the offence were deliberate, or if there was no reason that they should not have known, a high penalty is likely to be levied, as landlords are running a business and are expected to be fully aware and in control of their legal obligations.
- If/how much harm has been caused to the tenant. This is one of the most important factors that has to be taken into consideration when determining the level of penalty. The greater the harm or the potential for harm (this may be as perceived by the tenant), the higher the amount should be when imposing a civil penalty.
- What level of punishment the penalty will cause to the offender. The regulations state that it is important that any penalty levied must be set at a high enough level to help ensure that it has a real impact on the offender, and demonstrates the consequences of not complying with their responsibilities. After all, what’s the point in a penalty if it doesn’t deter bad behaviour!
- Deter others from committing similar offences. Whilst local authorities do not publish lists of who they issue civil penalties to, grapevine gossip is king, and if a local landlord copped a £30,000 fine, it is unlikely to stay under wraps for long. Once it is made public knowledge that a local council is willing and able to hoist such hefty fines against landlords who are not toeing the line, it may make others more aware of their own potential shortcomings. g) Make sure that the fine outweighs the benefits: the fine structure is set so that the cost of doing something wrong outweighs the benefits of committing the offence. In short, cutting corners – by not paying for appropriate maintenance, or required safety elements – will ultimately cost more in the long run, in the form of a hefty civil penalty!
Will I be issued with a fine straight away?
No. there is a very specific process to allow a local authority to issue a civil penalty:
- The amount of the proposed financial penalty
- The reasons for proposing to impose the penalty
- Information about the right of the landlord to make representations.
The notice of intent must be given no later than 6 months after the local housing authority has sufficient evidence of the conduct to which the penalty relates, or at any time when the conduct is continuing
If they decide to enforce, this will then be followed with a civil penalty notice that requires the landlord or agent to pay within 28 days. This must include the following:
- The amount of the financial penalty
- The reasons for imposing the penalty
- Information about how to pay the penalty
- The period for payment of the penalty (28 days)
- Information about rights of appeal
- The consequences of failure to comply with the notice
The local authority can reduce the amount or withdraw the civil penalty notice after this but it is unlikely to occur.
Can I refuse to pay?
Not really! If you do, the local authority will refer your case to the county court for an Order of the Court. They can then use county court bailiffs to enforce the order and recover the debt.
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