Provisions included in the Housing and Planning Act which affect landlords in the private rented sector (PRS) come into force today (6the April 2017).
The Housing and Planning Act is designed to dramatically improve the effectiveness of Houses in Multiple Occupation (HMO) and licenseable property rules enforcement in the private rented sector (PRS). Most responsible landlords already do so, but they will now need to ensure that they are complying fully with their obligations if they are to avoid a financial penalty. Local authorities are being urged to develop strategies to deal quickly and effectively with rule breaches in the private rented sector.
These provisions in the Act apply to England only and include the widening of the scope of Rent Repayment Orders (RROs) and new fixed penalty notices for landlords and letting agents.
Rent Repayment Orders currently allow local authorities, when paying housing benefit, or a tenant, to apply to the First Tier Tribunal (FTT) to recover up to 12 months of benefit payments or rent from the landlord, in relation to the failure to licence a property under an HMO or selective licensing scheme created under the Housing Act 2004
A local authority can seek an RRO without securing a criminal conviction first, whereas a tenant can only act following a criminal conviction, or on the back of an RRO obtained by the local authority.
Under the new rules the grounds on which an RRO can be obtained are extended and the process made more straightforward. The RRO now applies to all offences under the Housing Act 2004. To the previous licensing offences under the old provisions is now added a breach of a licence condition, breaches of the HMO Management Regulations, including the health and safety (HHSRS) regulations enforcement notices, unlawful force to effect eviction, and later in the year when banning orders come in, a breach of a banning order. Local authorities and tenants can now seek an RRO directly without the need for any form of prosecution first.
Local authorities will now be permitted to use the money recovered to cover their costs of enforcement of the rules in private rented sector work. Any spare funds after that go to the Treasury.
A new financial penalty regime also comes into force today. This will allow local authorities to opt, instead of prosecution, to levy a financial penalty of up to £30,000 in respect of any offence under the Housing Act 2004 as stated above.
The penalties apply to each offence committed, so a landlord with multiple breaches could be facing a very substantial fine. Landlords facing a penalty will have 28 days to appeal to the local authority after which time the authority will consider this and issue a final decision notice. After the final council decision, the landlord can, within 28 days, appeal to the FTT.
HMO landlords need to be fully aware of their obligations under the Housing Act 2004. Many properties come under the current HMO regulations without the need for a license – any residential property with 3 or more unrelated residents is classed as an HMO, whereas a mandatory licensable HMO has 5 or more unrelated residents on 3 or more storeys.
The effect of this legislation could be to incentivise local authorities to implement selective licensing schemes following their ability to recover costs more quickly, and tenants may be motivated to report their landlords for breaches of rules, with the prospect of a reward of recovering their rent.
Housing & Planning Act rules start today… https://t.co/k6Wr5lczzz
— LandlordZONE (@LandlordZONE) April 6, 2017