Renters (Reform) Bill: A Tour Bus Guide – Stop 7: Financial Penalties

The Renters (Reform) Bill has been published.  What does it say? What does it mean, for landlords and for tenants?

In this series, members of the 42BR Housing Team stop off at different landmarks, considering the implications of the new law along the way.

Financial Penalties for Landlords

Andrew Carter

Clause 11 of the Renters (Reform) Bill introduces a range of new financial penalties that Local Authorities can impose on landlords: for breaches of the duty to give pre-tenancy information to tenants (in a new section 16D, to be added to the Housing Act 1988), and for engaging in other banned conduct connected with the grant and termination of an assured tenancy (listed in a new section 16E).

The list of proscribed conduct in section 16E(2) may easily catch out landlords who are unaware of the new provisions.  It includes:

1. Purporting to let a dwelling-house on an assured tenancy for a fixed term;
2. Purporting to bring the tenancy to an end by a notice to quit;
3. Serving a purported notice under section 8(3) of the Housing Act 1988 specifying grounds that the landlord is not entitled to rely on, or specifying an earlier date for proceedings to be commenced than the statutory ground provides.

Under the proposed new section 16F of the Housing Act 1988, financial penalties of up to £5,000 can be imposed for breaches of sections 16D and 16E(2).

The Local Authority must be satisfied beyond reasonable doubt that the landlord has contravened a provision.

The local authority can also impose a further penalty if the contravention continues beyond 28 days after the penalty was first imposed, and it can impose further penalties every 28 days thereafter while the contravention continues.

It would appear the new financial penalties are intended to operate with strict liability, meaning that in deciding to impose a penalty, the Local Authority does not need to consider, satisfy itself of, or prove, any intention by the landlord: for example, a landlord may be liable to pay a penalty even if they made a genuine mistake about their entitlement to rely on a particular ground for possession.

By contrast, criminal offences related to the same conduct, enacted in a new section 16G, do require knowledge.

For example, a landlord whose contravention continues past 28 days faces criminal prosecution, as do repeat offenders within 5 years of their first breach.

Detailed provisions are set out, in a new Schedule 2ZA to the Housing Act 1988, for how financial penalties are to be imposed, the right to make representations, and how to appeal.

The proceeds of financial penalties can be applied first to the Local Authority’s legal and administrative costs – before the balance is paid to the Secretary of State.

Comment

It is proposed that statutory guidance about the imposition of financial penalties will be issued by the Secretary of State.

No such guidance has yet been published, whether in draft, for the purposes of consultation, or otherwise.

As with many aspects of the Renters (Reform) Bill, it remains to be seen whether Local Authorities will make use of these powers to punish landlords; and also, whether the breadth of these powers – as currently proposed – will deter good landlords (as well as bad ones) from letting property in future.

To read the Renters (Reform) Bill, click here.

A Tour Bus Guide to the Renters (Reform) Bill 

Stop 1: Deposits, gas safety certificates and more

Stop 2: Grounds for Possession

Stop 3: Pets 

Stop 4: Homelessness

Stop 5: Rent increases

Stop 6: Unlawful Eviction

Stop 7: Financial Penalties for Landlords

Stop 8: Tenant Notices to Quit

13th Jul 2023

Andrew Carter

Call 2018