Housing: Landlords and Letting Agents: Be Prepared, or Prepare to Fail

Marsans were recently asked to represent a landlord who was being prosecuted by a local authority for offences under the Town and Country Planning Act 1990.

The local authority in question alleged that our client was letting several of his investment properties as HMOs (Houses in Multiple Occupation). Although they did have a licence to let HMOs, they had not applied for the requisite permission under planning regulations. The council also alleged that the client was letting outbuildings and had built an extension, both of which would be in breach of planning regulations.

In addition to a prosecution for planning violations, our client was also being pursued for the rental monies collected from their tenants. They were asked to pay this to the local authority by way of a confiscation order. This amounted to a sum in excess of £120,000.

Our client was not an experienced landlord. The prospect of having to pay the sum requested was terrifying, as the income they received from their investment properties was their main source of income.

The matter came to trial earlier this year. Our client was delighted when we negotiated a settlement with the prosecution and prevented them from having to face confiscation proceedings.

The Housing and Planning Bill

On 12 May 2016, The Housing and Planning Bill received Royal Assent. The bill is now known as the Housing and Planning Act 2016 (The Act).

The Act confers more power to local authorities and enables them to manage housing more effectively within their borough. Under the Act, local housing authorities can impose penalties on landlords as an alternative to prosecution for certain offences. These include failure to comply with an improvement notice and offences in relation to licencing of HMOs. Under the Act, local housing authorities can impose penalties of up to £30,000.

Local housing authorities can also apply for banning orders against letting agents and landlords. A new database will come into operation later this year that will store information on rogue landlords. It will also list letting agents who are subject to, or have breached banning orders, and those who have received civil penalties. The database will be maintained by the local housing authorities and will not be accessible to the public.

A summary of the civil penalties under the Act can be found at the following link: https://www.gov.uk/government/publications/civil-penalties-under-the-housing-and-planning-act-2016