Landlords face £40,000 fines for misuse of possession grounds

Landlords could face fines of up to £40,000 if they “knowingly or recklessly” breach rules under the Renters’ Rights Act.

In response to a written parliamentary question, housing minister Matthew Pennycook confirmed the definitions of “knowingly” and “recklessly” in relation to the misuse of a possession ground.

The news comes as landlords could face on-the-spot fines of £7,000 for each hazard found in a property under new health and safety rules.

£40,000 fine

Under the Renters’ Rights Act, there are specific grounds on which a landlord can end a tenancy, such as selling the property and anti-social behaviour.

Landlords must give tenants the correct notice period for each ground. If a tenant does not vacate the property during the notice period, landlords will be able to apply to the court to evict them.

The government guidance explains, in the context of a possession ground, “being reckless” goes beyond making a mistake or unsuccessfully seeking a possession order on the basis of a ground that had a reasonable chance of success.

It suggests that the person took an unjustified risk when relying on that possession ground.

For “knowingly”, the guidance explains that this goes further than taking an unjustified risk. It indicates that the person was absolutely sure, or felt virtually certain, that no possession order would be made on that ground when they relied on it.

The government gives the example of a landlord who “knowingly used a ground for possession despite knowing that a court would not order possession on it, or being reckless about that, resulting in the tenant leaving within four months without an order for possession being made.”

The government warns that landlords or letting agents could face a penalty of up to £40,000 if they breach this rule.

Providing false information to PRS Database

Another example is a landlord knowingly providing fraudulent information to the Private Rented Sector (PRS) Database.

If a landlord lets or advertises a property without it first being registered on the database, they can be issued with a civil penalty of up to £7,000, or a fine of up to £40,000 if they provide fraudulent information to the database.

The government also makes clear that it is for the courts and tribunals to determine what “knowingly” and “recklessly” mean when deciding whether an offence has been committed, and that this will be assessed on a case-by-case basis.