Civil Penalties

Introduction

As part of the Housing and Planning Act 2016 the government introduced a range of new measures available for local authorities in relation to their dealings with rogue landlords: civil penalties, rent repayments orders, banning orders and the introduction of a database for rogue landlords and letting agents. Civil penalties are the most common of these enforcement powers.

What are civil penalties?

Civil penalties are an alternative to prosecution for a variety of offences under the Housing Act 2004. Previously local authorities would have to bring a criminal prosecution against the landlord or letting agent, a time-consuming process. For any of the listed offences, local authorities will now be able to fine the landlord as an alternative to bringing a prosecution against them.

How much can a landlord be fined?

There is no minimum penalty but the maximum penalty the local housing authority can set is £30,000 per offence.

Which offences can a civil penalty be issued for?

Civil penalties are available for the following offences:

• Failure to comply with an improvement notice
• Offences in relation to the licensing of a House in Multiple Occupation (HMO)
• Offences in relation to selective licensing under part 3 of the Housing Act 2004
• Contravention of an overcrowding notice
• Failure to comply with management regulations for HMOs
• Breach of a banning order
• Providing a property to someone who does not have a 'right to rent' in the UK

Can the landlord be prosecuted in court as well as being issued with a civil penalty?

No, the civil penalty is an alternative to prosecution. Use of one precludes using the other for that specific offence.

Can a landlord be issued with multiple civil penalties?

Yes, a landlord can be given one civil penalty for each individual offence. So if a landlord did not comply with an improvement notice, received an overcrowding notice and was operating an unlicensed HMO he could receive three separate civil penalties for a maximum of £90,000 in total.

Landlords need to be especially careful of failing to comply with the management regulations for HMOs. They can be issued with a civil penalty for each individual management regulation they breach rather than one set fine for failing to comply with management regulations.

Does this apply to Wales?

No, this legislation applies to England only.

Rent repayment orders do not apply to agents. Do civil penalties?

Yes. If an agent can be prosecuted for the offence normally then they can be issued with a civil penalty. This can be instead of, or in addition to, the landlord of the property.

What level of proof is required for a civil penalty?

Much like the criminal offences they relate to, where a civil penalty is appealed to the First Tier Tribunal, the standard of proof is 'beyond reasonable doubt' rather than having to prove on balance that the landlord has committed an offence.

Local authorities should satisfy themselves before serving a civil penalty that they would have a reasonable likelihood of conviction if they took the landlord to court. As this does not require conviction beforehand though, many landlords may wish to appeal civil penalties as a matter of course so that the First Tier Tribunal can assess the strength of the case and whether the procedure was correctly followed.

What must the local authority do to issue a civil penalty?

To issue a civil penalty, the local authority must first serve a notice of intent. This notice must contain the following:

• The amount of the proposed penalty
• The reasons for proposing to impose the penalty
• Information on how the landlord can make representations

This notice must be served within 6 months of the local authority collecting enough evidence to prove the offence was committed, or while the offence is still being committed.

The landlord or agent has 28 days from the service of the notice of intent to make representations to the local authority regarding the notice. Once that period is passed the local authority will then decide whether to issue the penalty and whether to change the amount of the civil penalty.

If they decide to enforce, this will then be followed with a civil penalty notice that requires the landlord or agent to pay within 28 days. This must include the following:

• The amount of the financial penalty
• The reasons for imposing the penalty
• Information about how to pay the penalty
• The period for payment of the penalty (28 days)
• Information about rights of appeal
• The consequences of failure to comply with the notice

The local authority can reduce the amount or withdraw the civil penalty notice after this but it is unlikely to occur.

Is there a right of appeal?

Yes, landlords and agents will be able to appeal the notice. Until the appeal is heard they will not have to pay the civil penalty.

How do local authorities decide on the size of the fine?

Local authorities will be expected to prepare their own policies to guide them on when to prosecute and when a civil penalty is preferable to another method of enforcement. Generally the maximum amount should be reserved for the most serious offenders but councils appear, based on the guidance, to have considerable leeway in this matter.

They are expected to take into account a number of factors when deciding on the amount. Aside from the financial status of the landlord or agent, they should consider the following:

• Severity of the offence
• Culpability and track record of the offender
• The harm caused to the tenant
• Punishment of the offender
• Deter the offender from repeating the offence
• Deterring others from committing similar offences
• Remove any financial benefit the offender may have obtained as a result of committing the offence