In this Bulletin, Christi Scarborough discusses banning orders: what are they? When would one be used? What are their consequences?
Christi Scarborough looks at new powers available to Local Authorities from 6 April 2018, and the circumstances under which private landlords or letting and management agents might end up subject to an order.
The Housing and Planning Act 2016 contained a number of measures to address issues caused by “rogue landlords”. Previous provisions allowing the Local Authority to fine landlords up to £30,000 were already in force. Chapter 2 of Section 2 of the Act came fully into force on 6 April 2018 and provides for the Local Authority to issue a banning order preventing a landlord from renting property in certain circumstances.
A Banning Order is an order which prevents a person or corporate body (which shall be referred to as “the subject” below) from doing any combination of the following activities (s14(1) HPA 2016):
Letting housing in England
Engaging in English Letting Agency Work
Engaging in English Property Management Work
It can also ban a person from (i) acting as an officer of or (ii) directly or indirectly taking part in or being concerned in the management of any corporate body which carries out those activities (s18).
The subject must have been convicted of a Banning Order offence. (s16(1)(a))
The current Banning order offences are contained in the Housing and Planning Act 2016 (Banning Order Offences) Regulations 2017. They are too numerous to list in full here, but include property-related crimes such as breaches of the Protection from Eviction Act 1977, licensing and disrepair related offences under the Housing Act 2004, as well as offences under the Protection from Harassment Act 1997, and more general criminal offences such as theft, burglary and drugs-related offences.
Normally, the offence must have been committed while the subject was a residential landlord or a property agent at the time the offence was committed (s16(1)(b)), unless the subject is a person who is also an officer of a corporate body (s16(3)). The legislation itself does not appear to require that the corporate body in question be involved in the above activities, but it seems likely that this power was designed to be wider ranging in the context of corporate letting and property management work, and that such an order would not therefore be likely to be granted on the grounds of corporate activity unrelated to the sector.
The Local Authority can require a subject to provide them with information to enable them to decide whether to apply for a banning order. It is a criminal offence punishable by a fine to fail to supply the information requested without reasonable excuse or to provide false or misleading information in response (s19).
The power to apply for such an order is vested in English Local Housing Authorities (as defined by Section 1 Housing Act 1985). The Local Authority gives notice of intended proceedings to the person explaining why they are applying, stating the proposed length of the ban and giving a period of not less than 28 days for the affected person to make representations. (s15(3))
The Local Authority must wait for the notice period to expire (s15(5)), and consider any representations made by the subject (s15(4)) before issuing an application to the First-Tier Tribunal (Property Chamber – Residential Property).
Any application must be made within 6 months of the date of conviction of the subject (s15(6)), so in practice if the Local Authority does not become aware of the conviction within 5 months, then this type of order will not be available to them. This may mean that they are unable to wait for the outcome of any criminal appeal before applying for such an order. It should be possible to apply and ask the Tribunal to stay the application pending the outcome of any appeal, but in any event the Tribunal is required to revoke upon application any order based solely upon a conviction overturned on appeal. (s20)
Subject to the above, the tribunal will decide the appropriate order to make by considering (s16(4)):
(a) the seriousness of the offence of which the subject has been convicted;
(b) any previous convictions that the subject has for a banning order offence;
(c) whether the subject is or has at any time been included in the database of rogue landlords and property agents; and
(d) the likely effect of the banning order on the subject and anyone else who may be affected by the order.
An order must last for a fixed period of at least 12 months, but may contain exceptions for some or all of the period to deal with existing tenancies or the winding down of a business. (s17) If an order carries on beyond the period after which some or all of the convictions it is based upon are spent, the subject may apply to the Tribunal to have the order varied or revoked (s20(3)).
Breach of a Banning Order is a criminal offence currently carrying a potential sentence of up to 6 months imprisonment and/or a fine. (s21) In the case of a continuing breach, a daily fine may be imposed while the breach continues. These sentences can be imposed upon officers or members of a corporate body in breach. (s22)
Alternatively a Local Authority may, if satisfied of a breach beyond reasonable doubt, impose a fine without the need for a criminal conviction. It may not impose an additional fine in respect of ongoing activity sooner than six months after a previous fine imposed in this way. (s23)
A banned subject is not permitted to hold an HMO licence. A Management Order allowing the Local Authority to take over management of properties (and keep the rent received) may be made as a result of a Banning Order. (s26)
Subjects of banning orders are also not permitted to dispose of any estate in land to any third party that they are associated with without the permission of the First Tier Tribunal. Section 27(4) explains in detail which third parties are considered to be associated.
The Local Authority is required to maintain a register of rogue landlords and property agents (s28). It must record any subject against whom a banning order has been made in this database (s29), unless they have already been recorded on the database for having committed the relevant banning order offence.
Appealing a Banning Order or failure to make a Banning Order
As the order is made by the First Tier Tribunal, any appeal would be to the Upper Tribunal.
The government has issued guidance as to the use of these orders including guidance on determining an appropriate sanction, which can be found at https://www.gov.uk/government/publications/banning-orders-for-landlords-and-property-agents-under-the-housing-and-planning-act-2016.
DISCLAIMER: This bulletin is no more than a summary of the topic, chosen selectively for the purposes of discussion only. It is not legal advice and should not be treated as such. It should not be relied upon in any respect. Recipients should always seek legal advice if proposing to take action following this commentary.