Top landlord fines to watch out for

As part of its plans to reform the Private Rented Sector (PRS), the Government has outlined proposals to increase powers for local authorities to take enforcement action against criminal landlords. However, councils do already have the ability to fine those who break the law up to £30,000, and if the breach is serious enough – such as endangering the lives of tenants - they can take court action, which could result in prosecution and an unlimited level of fine.

Fines for specific breaches start at £1,000 for a first offence of letting to someone who doesn’t have the legal right to live in the UK; through £5,000 for breaching the Tenancy Fees Act or violating Minimum Energy Efficiency Standard (MEES) rules, with electrical safety breaches attracting a maximum £30,000 fine.

The range of penalties already in place should be enough to deter landlords from breaking the law, but some are still flying under the radar and getting away with criminal activity because most local councils simply don’t have the resources to make enough checks. So, if the Government wants to give councils more tools to take action against rogue landlords, they’ll have to put some funding in place to pay for the resources required.

But despite funding being a huge issue for local authorities, many are clearly doing what they can to penalise offenders, with evidence of a particular focus on non-compliant Houses in Multiple Occupation (HMOs).

Here are just some of the fines handed out to landlords in 2023 so far:

• In January, a Bristol landlord pleaded guilty to committing multiple consumer protection offences in an attempt to hide his identity from tenants so that he could keep security deposit money and avoid responsibility for charging banned and hidden fees. He was ordered to pay a total of £37,000, comprising a fine of £12,000 and costs of £25,000.
• In March, a landlord in Derby was convicted of illegally evicting a young family and was ordered to pay a total of just over £1,600: a £600 fine, costs of £950 and a £60 victim surcharge.
• In April, a Northampton landlord was fined £100,000 for operating four unlicensed and defective Houses in Multiple Occupation (HMOs). Specific charges included: not keeping a fire escape free from obstruction, not maintaining fire alarms and failing to maintain the property in good repair. He also had to pay £15,000 in court costs and an £181 statutory victim surcharge.
• Also in April, an HMO landlord in Reading lost his appeal against a penalty notice for operating an unlicensed HMO, which was handed down by the council in July 2022. The landlord tried to argue that his tenants had illegally sublet the property without his knowledge, but all the former tenants confirmed they had paid their individual monthly rents directly to him and the First Tier Tribunal ordered the landlord to pay a total of £22,861.
• In the same month, a landlord operating an HMO in Stroud that had been licensed for 20 tenants, was fined a total of £10,478 due to the building falling below acceptable safety standards and presenting a serious fire safety risk. Cheltenham Magistrates Court ordered him to pay £4,608 for being in breach of safety regulations, £1,568 in investigation costs, £4,112.50 in respect of the council’s legal costs, plus a victim surcharge of £190.00.
• A landlord of a student property in Nottingham was ordered to pay his tenants nearly £3,000 via a rent repayment order in April, for behaving in a “coercive and abusive” manner towards them. The Tribunal also noted that the rental property had no fire safety equipment and there was evidence of overcrowding. 
• In May, Cambridge City Council issued a landlord with a Financial Penalty Notice amounting to just under £3,530 for failing to licence their HMO, which also had deficiencies. The landlord was required to carry out remedial works and undertake recognised landlord training within six months as a condition of the HMO licence being granted.

Meanwhile, London is set to see its highest ever level of fines levied against rogue landlords and agents this year. During just the first three months of 2023, £500,000 more was handed out in penalties than in the same period last year, with landlord fines from January to March totalling £8.6m. The borough of Camden tops the enforcement case list, while Hammersmith and Fulham has the highest average value of fines, at £19,800 per case. Here are just three of the cases from March that contributed to this record level of fines:

• In Barking, a landlord who let rooms in a house that had damp, rats and cockroaches, no fire doors and exposed electrical wiring, was ordered to pay £8,000 in fines and costs.
• A landlord in Hounslow was fined £115,000 for letting a “squalid and dirty” apartment, which he had ‘hidden’ in an illegal conversion on the side of his home.
• And a whopping £165,000 fine was levied against a landlord in Brent who had squeezed 18 people, including seven children, into one house.

These kinds of larger fines and court costs could have a devastating impact on your wider finances, and even a relatively small fine has the potential to wipe out several months’ profit from a rental property, so it really isn’t worth risking breaking the law.

By far the best way to ensure your property is always legally let is to work with a letting and managing agent that’s professionally qualified to look after your investment and is able to respond quickly to changes in the law to keep you fully compliant. If you currently self-manage or are a new landlord and you’d like to discuss our Fully Managed Landlord Service, just get in touch with your local Reeds Rains branch and have a chat with one of the team.