New civil penalty regime marks a step change in housing regulation

Thursday, April 6th, 2017 - By Richard Tacagni, Managing Director, London Property Licensing

Today’s announcement (6 April 2017) of new civil penalty notices for certain housing offences is likely to come as a surprise for many landlords and letting agents (read here). After all, the compliance risks are huge – a civil penalty of up to £30,000 could be enough to drive many landlords and agents out of business.

In my opinion, the implementation of this new civil penalty regime combined with an expanded remit of Rent Repayment Orders (RROs) marks the most significant change in housing regulation since the Housing Act 2004 came into force over 10 years ago.

Research shows that, with a few notable exceptions, local authority housing prosecutions are few and far between. They are hugely time consuming, require highly skilled staff and are expensive to administer. Whilst the council may receive a few thousand pounds in court costs following a successful prosecution, the fine imposed does not get passed on to the council.

New civil penalties of up to £30,000

The new civil penalty regime responds to these concerns. Whilst the most serious or repeat offenders are still likely to face court, councils will now have a simpler way to impose financial penalties.

Fail to comply with a housing improvement or overcrowding notice, fail to have the necessary mandatory HMO, additional or selective licence or fail to comply with the House in Multiple Occupation (HMO) management regulations and the council could impose a penalty of up to £30,000 without any prior warning. The money can be retained by the council and reinvested in their housing enforcement activity.

This change in regulation demands a much better knowledge and understanding of housing regulation across the private rented sector. For example, how many house and flat-shares fail to display a notice giving the name, address and contact number for the property manager? Yet fail to comply with a simple requirement like this and landlords and agents could breach the HMO Management Regulations and face a penalty.

Whilst it is vital councils adopt a fair and proportionate housing enforcement policy, the compliance risks are even greater when it comes to licensing. Thousands of landlords and agents are not ensuring properties that they manage are correctly licensed. The complexity and vast array of different licensing rules in each borough does not make the process any easier. Perhaps now is the time for government and the GLA to consider a simpler, streamlined and more standardised licensing scheme for London, so everyone understands what is expected of them.

Until then, landlords and agents renting out properties in London can use the free information resource on the London Property Licensing website to find out more about the licensing rules in their area. With thousands of visitors every week, the website is helping everyone to understand the rules and achieve compliance; and if further help is needed, our housing consultancy and licence application handling service is only a few clicks away! (here).

Please note that the views and opinions expressed in these blogs are those of the author and do not necessarily represent the views of London Property Licensing. These blogs are designed to stimulate discussion and debate within the property industry.

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