Incur a £30k fine without going to court

That headline might look ridiculous, but it’s not just an attention-grabber. It’s the reality of changes that come into force on 6 April 2017.

From that date, local authorities’ powers under the Housing Act 2004 are being strengthened in two key areas:

  1. Rent repayment orders
  2. Fixed penalty notices.

The Government crackdown on criminal and irresponsible landlords continues. If you don’t consider yourself to fit either of those two categories, don’t be complacent – if you’re not aware of the new rules, you could still fall foul of them.

Let’s look at each of the changes in turn.

Rent repayment orders

Rent repayment orders are not new, but their scope has been widened and now local authorities and tenants can seek an order from the First-Tier Tribunal without the need for prosecution.

A landlord may be liable to repay up to 12 months of rent or housing benefit to either the tenant or the local authority.  The Tribunal has some discretion on the amount of the repayment unless there has already been a prosecution or fixed penalty notice issued in relation to the same breach. In such a case, the entire sum claimed is likely to have to be repaid.

Rent repayment orders can be issued for the following:

  • Failing to license a HMO
  • Use of unlawful force during an eviction
  • Non-compliance with a statutory notice.

Breach of a banning order is expected to be added later in the year.

Fixed penalty notices

These remove the need for a local authority to prosecute and there is a maximum fine of £30,000 for each offence that contravenes the Housing Act 2004:

  • Failing to license a HMO
  • Breach of a licence condition
  • Non-compliance with a statutory notice.

Theoretically that could mean a maximum fine of £90k, but the Government is expected to issue guidance on the size and scale of penalties.

If a landlord is issued with a fixed penalty notice, they will have 28 days to put their case to the local authority which will issue a final decision notice. After the final decision notice, the landlord will have a further 28 days in which to appeal to the First-Tier Tribunal.

Check your obligations now

If you’re a landlord, it’s never been more important to understand and comply with your obligations. Check everything about your HMO licence. If you own and let a property as a HMO that does not currently need a licence, take extra care as the new rules will enable local authorities to take action more easily.

Tenants could also be more likely to seek the return of their rent and find the local authorities supporting their case.  Local authorities are busy and their resources are stretched, but the changed rules put them under a duty to pursue a rent repayment order when they can and to assist tenants to apply if it’s appropriate.


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