New penalties for landlords and agents under the Housing Act 2016

New penalties for landlords and agents under the Housing Act 2016

7:00 AM, 1st September 2017, About 6 years ago

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This is the sixth post in my 2017 Legal Update series.

The Housing & Planning Act 2016

The most recent piece of housing legislation to come out of Parliament is the Housing & Planning Act 2016. This introduces a new enforcement regime aimed at ‘rogue’ landlords and letting agents.

Although you will probably not come into the ‘rogue’ category – you could still get caught out. So, you need to know about the new rules.

In this post, I will be giving a brief outline.

Not all the measures in the Act are in force yet – but they are coming. Even those currently in force carry draconian and very expensive penalties which you will not want to incur!

The new rules only apply in England, so if you just have property in Wales, this post will not apply to you. But if you have or manage property in England – read on!

This is an important post so I would urge you to at least skim read it.

These new penalties are the reason why it is CRITICAL that from now on you take care to be up to date with the law and comply with it fully. This information series will help.

Let’s now take a look at these new rules.

Banning Orders

These are not yet in force but when they are they will be a BIG deal. Effectively, if a banning order is made, it will close down your business.

Banning orders (when they come in) will be made against both landlords and letting agents (and also presumably property managers) by the First Tier Tribunal on application by the Local Authority – after the landlord / agent has been convicted of a ‘banning order offence’.

We don’t yet know for sure what these will be. However, they will almost certainly include:

  • Illegal eviction offences
  • Breach of improvement orders
  • Failure to obtain an HMO license (where this is required)
  • Breach of the HMO management regulations
  • Convictions under the Immigration Acts regarding the right to rent rules
  • Serious criminal offences such as fraud, possession or supply of drugs; and
  • Specified violent or sexual offences – where carried out against occupiers of rented property

Banning orders were scheduled to come into force in October 2017 but they could be delayed until April 2018. We don’t know yet.

Rent Repayment Orders (IN FORCE NOW)

These have been around for a while but only for failure to obtain an HMO license. However, they can now also be made

  • Where a landlord has used violence for securing entry under the Criminal Law Act 1977
  • For eviction or harassment of occupiers under the Protection from Eviction Act 1977
  • For failure to obtain an HMO license,
  • Failure to comply with an improvement order, and
  • (When they come into force) breach of a banning order

Both tenants (to recover rent paid) and Local Authorities (to recover benefit paid) can apply to the First Tier Tribunal for a rent repayment order.

The amount awarded will be set by the Tribunal under principles set out in the Act and any guidance issued by the Government – save that if the landlord has been convicted of a relevant offence the Tribunal must make the full award of 12 months’ rent.

Rent repayment orders therefore can be VERY EXPENSIVE – imagine having to pay back a whole years rent!

As tenants can apply for them too – you may find yourself in difficulties even if your Local Authority has decided not to prosecute. Another reason to stay compliant with the law.

Rogue Landlord Database

This is not in force yet but is intended to be a list of landlords and agents who have breached the legislation, to help Local Authority Enforcement Officers with their enforcement work.

For example, so a rogue landlord or agent will not be able to hide by moving to another area of the country.

Civil Penalties (IN FORCE NOW)

These came into force on 6 April. Local Authorities can now impose Civil penalties of up to £30,000 as an alternative to prosecution for the following:

  • Failure to comply with an Improvement Notice
  • Offences in relation to licensing of Houses in Multiple Occupation
  • Offences in relation to licensing of houses under Part 3 of the Act
  • Offences of contravention of an overcrowding notice
  • Failure to comply with management regulations in respect of Houses in Multiple Occupation

Note that the penalty can be up to £30,000 PER OFFENCE (although at least to start with it is more likely to be in the region of £5,000 per offence).

So, if a landlord has (for example) breached several of the HMO management regulations – the total amount charged could be significant.

Very significant.

The big advantage of Civil Penalties for Local Authorities is that they will be able to keep the money to fund further enforcement work – so these powers are going to be used!

Further information:

Because these new rules carry such severe penalties which – although aimed at ‘rogue landlords’ can also impact on normal landlords and agents – I am making available to Property118 readers our ‘Conference Course 2017’ at a 30% discount.

This course (which includes the 10 recorded talks from our recent Landlord Law Conference plus 5 bonus talks and 10 hours CPD) includes a talk from barrister Sam Madge Wyld where he goes into a lot more detail about the Housing & Planning Act 2016 (including the new abandonment procedure coming later, which I have not had space to discuss today).

You will find the information page for the course here.

That’s all for now – but I will be back on Monday – looking at the scary topic of Consumer law.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

To see all the articles in my series please Click Here

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