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Civil penalties for landlords replaces prosecution

This week I read with interest in my local newspaper how Newham had become the first local authority to exercise new powers conveyed under the Housing and Planning Act 2016 (effective from 6 April 2017)

A fine of £5,000 was issued to a landlord who had failed to install fire alarms in the property in question which was a serious breach of their property licence.

The Department for Communities and Local Government has produced a useful guidance for local authorities on how the new powers will work – ‘Civil penalties under the Housing and Planning Act 2016’

The measures introduced by the Act is targeted at rogue landlords, on the basis that some 4.3 million households in England alone live in private rented accommodation, and that number is only set to rise with the lack of affordable properties and the shortage of social housing.

A civil penalty can now be invoked for the following offences under the Housing Act 2004:

  • Failure to comply with an Improvement Notice;
  • Offences in relation to licensing of Houses in Multiple Occupation;
  • Offences in relation to licensing of houses under Part 3 of the Act;
  • Offences of contravention of an overcrowding notice
  • Failure to comply with management regulations in respect of Houses in Multiple Occupation

Note that civil penalties are instead of prosecution so you can only do one or the other, but the local authority can impose the civil penalty on more than one person (e.g. the landlord and managing agent) for the same breach.

There are appeal rights and usually a notice of intent is served in advance of the civil penalty so landlords shouldn’t feel that these are arbitrarily imposed without recourse.

Hand in hand with the above will be a central database of rogue landlords and property agents who have fallen foul of the statutory regulations.

The process should in principle be simpler and more efficient than having to prosecute in the Magistrates’ court, and the added bonus for local authorities is that unlike prosecution fines, local authorities can actually keep the civil penalties themselves and with the penalty limit increased to £30,000 now, it could work out to be a lucrative business.

But I am cautious about the true benefits and whether they will indeed catch the rogue landlords it was intended to. In the case mentioned above, the reason that the breach came to light, was due to the fact that a fire occurred at the property and the fire brigade were called and able to report the lack of a smoke alarm. Absent that, then it is doubtful whether the landlord’s crimes would have come to light. As a preventive measure, such landlords are unlikely to be deterred in the face of profit margin and it doesn’t really matter until such time that they are actually caught.

Also in the event that a civil penalty remains unpaid, the recourse for a local authority is having to take the matter to a county court to enforce as any other debt, and this in itself will waste resources and time which may be disproportionate to the civil penalty levied.

We have had selective licensing since 2013 in Newham which has led to more prosecutions of rogue landlords, but for the really bad landlords the trick is getting them to apply for a licence in the first place and how the local authority can track unlicensed properties. For the good landlords, they feel penalised paying a sum of £500 and not getting very much for their money save for more red tape and hoops to jump through.

Whilst civil penalties is a step in the right direction to arm local authorities with the tools necessary to tackle rogue landlords, this is not a panacea for the underlying housing problems in a local authority.