News

New landlord civil penalties of up to £30,000 come into force today

Thursday, April 6, 2017

New laws coming into force today (6 April 2017) give local authorities in England substantial new powers to crack down on rogue landlords and agents.

The changes are being introduced under the Housing and Planning Act 2016. The legislation amends certain provisions in the Housing Act 2004 and introduces new financial sanctions for non-compliance with housing standards, property licensing and HMO management requirements.

For the first time, English local authorities will be able to impose a civil penalty of up to £30,000 for a range of housing offences, including:

  • Failure to comply with a housing improvement or overcrowding notice;
  • Failure to have the correct licence for a property that needs licensing; and
  • Failure to comply with the House in Multiple Occupation (HMO) management regulations.

Issuing a financial penalty will not require a criminal prosecution. If the local authority has sufficient evidence of the offence, they can award a civil penalty without any need to attend court. The local authority must have regard to new government guidance when setting the appropriate penalty.

The process will involve issuing a notice of intent and inviting representations. A final notice and financial penalty can then be issued, with the option to appeal to the First-tier Tribunal. If unpaid, the council can then apply to the county court for an order requiring payment.
   
For certain offences, both the landlord and letting agent can be held liable and subject to the new civil penalty regime.

Rent Repayment Orders

In a further change to housing regulation, the government has expanded the Rent Repayment Order (RRO) provisions under which English local authorities and tenants can claim back up to 12 months rent.

RROs were only previously available in respect of licensable but unlicensed properties and tenants were unable to lodge a claim unless the local authority had first prosecuted the landlord.

From today (6 April 2017), RRO applications can be made for a much wider range of offences including:

  • Illegal eviction or harassment of occupiers;
  • Using violence to secure entry; and
  • Failure to comply with a housing improvement notice or prohibition order.

Local authorities can submit a RRO application for any rent paid by Housing Benefit or Universal Credit whereas tenants can submit a RRO application if they have paid the rent themselves.

From today, tenants can submit a RRO application without the local authority having first prosecuted the landlord. Instead, the tenant would need to prove the offence to the satisfaction of the First-tier Tribunal who hear the case.

A specific power has also been written into the legislation, enabling local authorities to assist tenants in applying for a RRO. 
 
Unlike criminal prosecutions, any income received from civil penalties and RROs can be kept by the local authority and spent on housing enforcement activity.

Richard Tacagni, Managing Director, London Property Licensing commented:

This new legislation should act as a wakeup call for landlords and letting agents. When it comes to property licensing, the compliance risk is huge. Fail to apply for the correct licence and you risk an immediate financial penalty of up to £30,000!

Our research shows that mandatory HMO, additional and selective licensing schemes in London already extend to more than 200,000 properties with more schemes coming soon. Yet far fewer properties are licensed, leaving thousands of landlords and agents exposed to the risk of these new civil penalties.

With the fully-inclusive LPL licence application handling service costing less than £500+VAT per property, now is the time to check your property portfolio and bring it into compliance. Landlords can no longer afford to sit back and await a warning letter from the council. That warning letter might instead be a notice of intent leading to a substantial financial penalty”.

Landlords and agents wanting to find out more can visit the London Property Licensing website and click on the ‘Select Borough’ link top right to search for licensing schemes across every London Borough.

Further information about the London Property Licensing licence application handling service is available here

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