The eye-watering cost of non-compliance as landlords’ legal obligations change

From May 1, tenancy structures will change and no-fault evictions will end. It means major changes to how landlords do business. 
But what some landlords may not realise is that since 27 December, councils and local housing authorities have been granted new investigatory and enforcement powers – also as part of the Renters’ Rights Act – allowing them to access properties and investigate legal breaches even before the more substantial parts of the act come into force in May. 
With fines ranging from £7,000 to £40,000 applicable from 1 May, as well as the potential damage to your landlord reputation, the cost of non-compliance can be eye-watering. 

Enforcement under the Renters’ Rights Act
Local housing authorities in England, as well as county councils in England which are not local housing authorities, will be responsible for issuing civil penalties. These will apply to anyone who commits a breach or offence under the new legislation. The maximum civil penalty for breaches is £7,000 while for offences it ranges up to £40,000.

Fines faced 
In its guidance for landlords, the government says that landlords or their letting agents could face a financial penalty of up to £7,000 from 1 May for breaches that include trying to let the property on a fixed-term tenancy instead of a rolling tenancy; ending the tenancy verbally; failing to give written notice for a specific ground for eviction; failing to give a written statement of terms containing the information required by regulations or failing to give the government supplied information sheet (available from March) which will outline the Act’s changes to tenants. 

Meanwhile, offences liable for a financial penalty of up to £40,000 as an alternative to prosecution include reletting or remarketing a property within 12 months; knowingly using 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 4 months without an order for possession being made; committing a breach within 5 years of a previous offence; committing a breach within 5 years of receiving a financial penalty for a previous breach that has not been withdrawn or continuing to commit a breach for more than 28 days after receiving a financial penalty for that breach that has not been withdrawn and is not the subject of an ongoing appeal. 

More specific fine levels
Although these are the maximum penalties applicable it will be local housing authorities who will set civil penalty levels, developing and publishing their own policies. The government has put together a starting point list for civil penalties for local authorities which includes: 

• £35,000 - Unlawful eviction and harassment, deemed an offence.
• £25,000 - Reletting or remarketing a property within the 12 month no-let period after using the moving or selling grounds within the new act, also an offence.
• £6,000 - Discrimination against those on benefits or with children in the lettings process, a breach of the Renters’ Rights Act. 
• £4,000 - Inviting, encouraging or accepting any offer of rent greater than the advertised rate, also a breach of the Renters’ Rights Act. 
• £4,000 – The offence of failing to provide an existing tenant with prescribed information about changes made by the Renters’ Rights Act.
• £3,000 – Failing to specify the proposed rent within a written advertisement or offer, also a breach of the Renters’ Rights Act. 

The civil penalty process 
Once a local authority has decided to impose a civil penalty on a landlord it must give a notice of intent that includes the date on which the notice is given, the proposed financial penalty amount, the reasons for the penalty and the right for the individual concerned to make representations within 28 days of its issue. The local authority will decide whether to impose the penalty and if so, issue a final notice. The local authority can decide whether to give a discount for prompt payment, but it won’t exceed one-third of the amount in the final notice. 

For more information on how we can assist you on your sales / lettings journey, please contact one of our branches in Seaford, Peacehaven, and Newhaven areas. If you would like further guidance on any part of the sales process, get in touch with us today.  (add link to contact page:  https://www.phillipmann.com/contact-us.html)