What are the penalties for landlords who break the law?
There are around 150 laws that apply to the lettings industry and most of the ones that have come into force over last decade have been focused on making properties safer for tenants. Among other things, landlords are now legally obliged to maintain rented properties to a good standard, remove potential hazards and install fire safety measures.
Good landlords – and that’s the vast majority – have taken on board all the legislation and absorbed the ever-increasing cost of letting a property legally. But there are still some who don’t know the rules and struggle to keep up with new ones while others continue to flout the law.
Until April last year, councils only had the power to impose a civil penalty (that’s a fine without having to take the landlord to court) of up to £5,000, and the average fine was only around £1,500 – not much of a deterrent for the rogues1.
However, in April 2017, the maximum civil penalty in England was given a huge raise to £30,000, and soon banning orders will come into effect. From 6th April this year, if councils discover a property is not being safely and legally let, they can not only fine landlords up to £30,000, but also ban them from letting and share details with other councils across the country via a database of ‘rogues’. Importantly, the money raised from these fines is ring-fenced to help fund further enforcement activity within the local authority area.
Here are the most common offences and related penalties for landlords in England. Bear in mind that on top of these, from April 2018, any conviction for an offence under the Housing and Planning Act 2016 will result in your details being put on a ‘rogues’ database shared by local and central government:
Penalties in England
Violating the housing Act 2004, including: failure to comply with an improvement notice, failing to license a HMO, contavention of an overcrowding notice, failing to comply with management regulations for an HMO.
Civi penalty of up to £30,000, possibly a banning order and being placed on a 'rogues' database.
Oxford City Council has fined one landlord a total of £25,298: £7,149 for failing to licence a property as a HMO Plus, £18,149 for four separate fire safety failures.
Letting to someone you know does not have the legal right to be in the UK.
Up to five years in prison or an unlimited fine.
Failure to protect a tenant's deposit.
Unlimited fines, but generally calculated at three times the initial deposit taken.
Health and safety violations that result in a tenant or visitor in the property being injured or dying.
Unlimited fines or a jail term for manslaughter.
For most of the rest of the UK, the maximum penalties are similar – except for the £30,000 maximum civil penalty. Here are some additional offences and penalties specific to each country:
Penalites specific to Wales
Failing to apply for a landlord licence (via Rent Smart Wales) to operate a rental property or violating the terms of the licence.
A fixed penalty notice; potential prosecution in court and a fine.
In May 2017, a landlord was prosecuted for operating an HMO without a licence and failing to meet fire safety requirements. They were fined £4,400 plus £1,170 in costs and surcharges.
Penalties specific to Scotland
Failing to register with the local council via Landlord Registration Scotland.
A maximum fine of £50,000 and a ban on being registered as a landlord in any council area for up to five years.
A landlord in Fife who continued to operate, despite his registration having been refused by the local council, was fined £500 and banned from operating as a landlord anywhere in Scotland for 12 months.
Of course, the best way to make sure you don’t fall foul of the law is to have your property managed by an agent that’s a member of a self-regulating industry organisation - such as ARLA Propertymark, UKALA or RICS.
At Your Move, we’re long-standing members of ARLA, which gives you peace of mind that we’ve got systems in place for keeping up with legislation and making all the necessary checks on properties. That means we’re well set up to take much of the legal responsibility off your shoulders.
If you don’t currently have our full management service, or if you’ve got any questions about penalties, get in touch with your local Your Move branch. Importantly, if you receive any communication from your local council about an alleged violation of any lettings laws, you should consult a lettings legal expert right away.