What are the penalties for landlords who break the law?
The lettings industry is heavily regulated, with around 168 specific laws now that landlords and agents have to abide by in England and Wales. And every year there seem to be more and more additions or amendments, which makes keeping up with your legal obligations quite challenging.
Many of the changes that have been made over the last ten years or so have been around improving standards to make sure properties are as safe as possible for tenants. And along with these new laws have come stronger penalties for landlords and agents who fail to meet their legal obligations.
In our experience, the reality is that most lets go pretty smoothly. When there is an issue, it’s usually down to the tenant breaching their agreement in some way, but every now and then there are cases where a landlord has failed to ensure their property has been let and managed legally and safely.
- They haven’t got the necessary licence to let the property as a House in Multiple Occupation
- Notice was served on the tenant incorrectly
- There aren’t enough smoke alarms and/or they don’t work properly
- There’s a serious damp and mould problem
What's the worst that could happen if you break letting laws?
For a variety of different violations:
Your local council can issue a civil penalty of up to £30,000 – i.e. they don’t need to take you to court
- Your details could be entered on a national ‘rogues database’
- You could be banned from letting property
- You could be criminally convicted and face jail time – although that’s usually only in the most serious cases, such as injury or death of a tenant, or multiple offences
And recently, following a government consultation over fire safety in multiple-occupancy properties prompted by the Grenfell tragedy, the Home Office announced that there are plans to introduce unlimited fines for landlords and managing agents of Houses in Multiple Occupation (HMO) who breach fire safety regulations. The new penalty is expected to come into force in 2022, under the Building Safety Bill.
10 maximum fines for breaking letting laws in England:
- Fire safety and other safety breaches that endanger the lives of tenants – prosecution and potentially unlimited fines
- Renting out an HMO without a licence – unlimited fine in court, plus tenants can apply for a Rent Repayment Order for up to 12 months’ rent
- Breaching HMO licence regulations – unlimited fine in court
- Not meeting ‘fitness for habitation’ standards – your tenants can sue for compensation and the award is at the discretion of the judge, plus fees
- Illegal eviction – compensation for the tenant at the court’s discretion (which could run into tens of thousands), plus fees
- Electrical safety breaches – £30,000
- Breaching Tenancy Fees Act – up to £5,000 for a first offence, unlimited fine for reoffending within 5 years
- Minimum Energy Efficiency Standard (MEES) Regulations breach - £5,000
- Not protecting your tenant’s deposit – up to 3 times the amount
- Letting to someone who doesn’t have the legal right to live in the UK - £1,000 for a first offence, £3,000 thereafter and, in serious cases, a prison sentence
And five in Scotland:
- Operating as an unregistered landlord - £50,000 maximum, plus up to a 5-year ban on letting
- Operating an HMO without a licence - £50,000
- Breaching Legionella regulations – up to £20,000
- Breaching Energy Efficiency regulations – up to £4,000
- Failing to protect a tenant’s deposit – up to 3 times the amount
What can you do to make sure your property is always legally let and managed?
The best way to ensure you and your property are always legally compliant and the risk of inadvertently breaking the law is greatly reduced, is to use the services of a managing agent. They can take care of the vast majority of the administration of the let and keep you up to date with all the latest legal changes that could affect you.
However, it’s important to understand that the ultimate responsibility for making sure your rental property is let safely and legally is yours. You’re the landlord, you own the property and the tenancy agreement is between you and the tenant. (The exception would be if the property is owned and/or let via a company.)
So it’s hugely important to choose a qualified letting agent such as ourselves. As members of ARLA Propertymark, all Your Move staff undergo professional training, and we have robust systems in place to ensure every property we look after for our landlords is always legally let and managed. We also notify our landlords about any legal change that could affect them and/or their property.
If you’d like to discuss our Fully Managed service or want to know more about any legal aspect of letting, just contact your local Your Move branch and one of the team will be happy to help.
Five penalties that have been issued to landlords this year:
- January – The landlord of an unlicensed HMO in Northampton that the council deemed squalid, hazardous and a real danger to the tenants living there, was fined more than £50,000.
- February - A landlord in Taunton was given a nine-month custodial sentence (suspended for 18 months) after a fire destroyed her five-bedroom HMO. It was discovered that the property only had one smoke detector fitted.
- March – A landlord from Stourbridge, who allowed his tenants to live in 'squalid conditions', without hot water, heating or a working toilet, was fined £5,000 for failing to comply with an Improvement Notice.
- July – A landlord in Rochester was fined more than £12,000 for renting out a dangerously damp property and failing to comply with a prohibition notice.
- July - A landlord in Derbyshire was fined £20,000 for letting an unlicensed HMO and breaching multiple fire safety regulations.