Housing and Planning Act 2016 Civil Penalties Financial penalties as an alternative to prosecution Introduction In this document, the term landlord also includes to owner, property agent, managing agent, letting agent, and/or person having control unless otherwise stated The private rented sector of the housing market continues to grow year on year and Peterborough City Council is committed to improving standards within the sector to ensure that our residents who live in privately rented accommodation have safe, warm, decent homes, that are well managed and maintained. Peterborough has some excellent landlords and agents operating within the city, the number of which is increasing. Housing standards are also improving thanks to the recent introduction of selective licensing in certain parts of the city and through accreditation and education. However, there are a number of criminal, rogue, and irresponsible landlords and agents who knowingly rent out property that is unlicensed, substandard and unsafe. The Council shares the Government s desire to support good landlords who provide decent, well-managed, and maintained homes. and There is also a desire to avoid unnecessary regulation which increases costs for landlords and increases rents for tenants. However, at the same time the Council is committed to cracking down on those unscrupulous landlords who flout the law and profit from their non-compliance by renting out unsafe and substandard accommodation. The Council also supports the principle that the offender rather than the responsible landlord or the local taxpayer should pay for the cost of housing enforcement and that no-one who breaks the law should gain a financial advantage over someone who does not. As such, full use will be made of the measures introduced in the Housing and Planning Act 2016 to improve private housing standards within the city and to create a level playing field for all landlords operating within the private rented sector. In this document, the term landlord also includes to owner, property agent, managing agent, letting agent, and/or person having control unless otherwise stated The Housing and Planning Act 2016 introduces a number of measures to help local authorities deal more robustly with criminal, rogue, and irresponsible landlords: 1
Extension of rent repayment orders to cover illegal eviction, breach of a banning order, failure to comply with an improvement notice, and certain other specified A database of rogue landlords and property agents who have been convicted of certain or received 2 or more civil penalties within a given time scale. Banning orders for the most serious and prolific offenders Civil penalties of up to 30,000 as an alternative to prosecution for certain specified, provided by s126 and Schedule 9 of the Housing and Planning Act 2016, which are as follows:-. Failure to comply with improvement notices (Section 30) Licensing of houses in multiple occupation (Section 72) Licensing of houses under Part 3, selective licensing (Section 95) Failure to comply with overcrowding notices (Section 139(7)) Management of HMO regulations (Section 234) Financial Penalties The law allows for a maximum financial penalty of 30,000 to be imposed for each offence. There is no minimum penalty set. Although Government states in its guidance document that generally it would expect the maximum civil penalty of 30,000 to be reserved for the very worst offenders it recommends that the actual amount imposed in any case should reflect the severity of the offence and take into account the landlord`s previous record of offending. When setting fine levels the local authority should consider the following factors: 1. The severity of the offence - the more serious the offence, the higher the civil penalty should be. 2. The culpability and track record of the offender - a higher penalty should be applied to an offender who has a history of failing to comply with their obligations or where their actions were deliberate and/or they knew (or should have known) that they were in breach of their legal responsibilities. Landlords are running a business and should be aware of their legal obligations. 3. The harm caused to the tenants - The greater the harm or the potential for harm the higher,the amount of civil penalty should be imposed. 4. The punishment of the offender - A civil penalty should not be seen as a lesser or easier punishment than prosecution. Whilst the penalty must be proportionate and reflect the severity of the offence and any pattern of offending, it is important that it is set at a high enough level to ensure that it has a real economic impact on the offender and demonstrates the consequences of not complying with the legislation. 2
5. The Deterrent influence on the offender - The ultimate goal is to prevent further offending and help ensure that the landlord complies with all their legal responsibilities in the future. The level of penalty should therefore be set at a high enough level that it is likely to deter the offender from reoffending. 6. The Deterrent influence on others - Whilst the fact that someone has received a civil penalty will not be in the public domain, it is possible that knowledge will spread to other landlords in the local area through informal channels.. An important part of deterrence is that realisation that (a) the local housing authority is proactive in levying civil penalties where necessary, and (b) the level of civil penalty will be high enough to both punish the offender and deter repeat offending. 7. The removal of any financial benefit the offender may have obtained from committing the offence - The guiding principle is to ensure that the offender does not benefit financially from committing the offence. It should not be cheaper to pay the fine than to comply and ensure the property is well maintained and properly managed in the first place In deciding whether to impose a financial penalty the Council must have regard to Government guidance and the Council`s own enforcement policy. Civil penalties can only be used as an alternative to prosecution. If a civil penalty has been paid by the landlord, the landlord cannot then be prosecuted for the same offence. Likewise a civil penalty cannot be imposed if prosecution proceedings have been started for the same offence. Generally speaking, only one civil penalty can be issued per landlord for each of the available. However,, a separate civil penalty can be issued for each separate breach of HMO management regulations. Where a landlord and a letting/managing agent commit the same offence, the Council can impose a civil penalty on both of them for the same offence as an alternative to prosecution. The amount the civil penalty imposed on each offender may differ depending on the circumstances of firstly the case and secondly the offenders. When determining the amount of any penalty to be imposed the Council will have regard to the charging table and guidance notes found at appendix 1. Determining which sanction is most appropriate The same criminal standard of proof is needed to impose a civil penalty as for a prosecution. The Council needs to satisfy itself that there would be a realistic chance of conviction if the offender were to be prosecuted. Likewise, in the event of an appeal to the First Tier Tribunal the council must be able to demonstrate beyond all reasonable doubt that the offence has been committed. 3
The Council must also be satisfied that the public interest will be properly served, by reference to the Public Interest Test as set out in the Crown Prosecution Service Code for Crown Prosecutors. If the Council considers it has a reasonable prospect of conviction, it will always consider a civil penalty in the first instance. Only by exception will it seek alternative measures such as prosecution or formal caution, or in cases where an offender has failed to comply with a civil penalty. The Council is allowed to retain the income it received from civil penalties provided it is used to further the Council's statutory functions under parts 1 to 4 Housing Act 2004, in relation to their enforcement activities covering the private rented sector. (SI 367 (2017)) Appeals A person issued with a civil penalty may appeal to the First Tier Tribunal. After a re-hearing of the Council s decision to impose the civil penalty, the Tribunal may confirm, quash, or vary the civil penalty. The Tribunal can also dismiss an appeal which is frivolous, vexatious, or an abuse of process, or if the appeal as no reasonable chance of success. Process for imposing financial penalties The following process will apply to the issue of a financial penalty.: A Notice of Intent shall be served on the suspected offender, specifying:- a) the reason for proposing the financial penalty; b) the amount of the penalty imposed; c) information about the right to make representations to the Council The recipient will be given 28 days in which to make written representations to the Council about the proposal to impose the financial penalty. The representation may be by any legible written form. Following the 28 day representation period the Council will decide whether to impose the financial penalty, and if so the amount. If the Councils decides to impose a financial penalty a further notice shall be issued, specifying:- A) the amount of the financial penalty B) The reasons for imposing the penalty C) Information about how to pay the penalty D) The period for payment 4
E) Information on how to appeal to the First Tier Tribunal F) The consequences of failure to comply with the notice If payment is not made, the Council will recover the penalty by County Court action, after any appeal period has expired or any appeal has been determined or withdrawn., Where appropriate, the Council will also seek to recover the costs incurred in taking this action. The Council, may, at any time: A) withdraw a notice of intent or a final notice B) Reduce the amount specified in a notice of intent or a final notice Where the Council decide to take either action, it will write to the person to whom the notice was given. Where a person has received two financial penalties under this legislation within any 12 month period, irrespective of which local area the were committed in, the Council will consider making an entry on the national database of rogue landlords and property agents. In doing so, the Council will have regard to any guidance issued by the Secretary of State. Paying a civil penalty A civil penalty must be paid within 28 days, beginning with the day after that on which the final notice was served, unless that notice is suspended due to an appeal. Details of how to pay will be included with the notice. Recovery of unpaid civil penalties Unpaid civil penalties can be pursued through the County Courts by way of one of the following methods: A warrant of control for amounts up to 5000 A third party debt order A Charging order, and Bankruptcy or insolvency A certificate, signed by the Councils Chief Finance Officer, stating the amount due has not been received by the date of the certificate will be accepted by the Courts as proof of the payment being due. Where the Council has obtained a Charging Order for an amount over 1,000, the Council can consider applying for an Order of Sale against the property or asset in question. Where the Council pursues enforcement through the County Court,the judgment will automatically be registered on the Register of Judgements, Orders and Fines. Inclusion on this Register may make it more difficult for a landlord to get financial credit. 5
Rent Repayment Orders The Housing Act 2004 introduced rent repayment orders to cover situations where a landlord of a property had failed to obtain a licence for a property that was required to be licensed. A rent repayment order is made by the First Tier Tribunal requiring a landlord to repay a specified amount of rent. Originally it specifically related to to in relation to licensing of houses of multiple occupation. Rent repayment orders have now been extended through the Housing and Planning Act 2017 to include a much wider range of, namely: Failure to comply with an improvement notice (Section 30, HA 2004) Failure to comply with a Prohibition Order (Section 32, HA 2004) Breach of a Banning Order (Section 21, Housing and Planning Act 2017)(due to come into force in October 2017) Using violence to secure entry to a property (Section 6, Criminal Law Act 1977) Illegal eviction or harassment of the occupies of a property (Section 1 Protection from Eviction Act 1977) A rent repayment order can be granted to either the tenant or the local authority. If the tenant paid their own rent then any amount granted under an order must be paid to the tenant. If the rent was paid via housing benefit or the housing element of universal credit, then the amount granted under an order is paid to the local housing authority. If the rent was paid partially by the tenant and partially by housing benefit or universal credit then the rent would be repaid on an equivalent basis. A rent repayment order can be made against a landlord who has received a civil penalty but only after the expiry of the time within which an appeal could be lodged. The Council must consider a rent repayment order after a landlord has been convicted of any of the prescribed within their area. In most case the Council will apply for a rent repayment order to recover monies paid through housing benefit or through universal credit. The Council will also offer advice and assistance to tenants in making an application for a rent repayment order if the rent is paid by themselves. Database of Rogue Landlords The Housing and Planning Act 2016 also introduced a database of Rogue Landlords and Property Agents. The legislation places a duty on the local housing authority to make an entry into the database in respect of a person if a banning order has been made against that person and no entry was made in relation to the conviction. 6
The legislation also states the local housing authority may make an entry into the database in respect of a person on whom may make an entry in the database in respect of a person who has, at least twice within a period of 12 months, received a financial penalty in respect of a banning order offence committed at a time when the person was a residential landlord or a property agent. Banning Orders Where a landlord has successfully been prosecuted for a banning order offence provided that offence was wholly committed after 6 April 2018. The local housing authority can apply to the First Tier Tribunal for a banning order against the landlord. A banning order will last for at least 12 months and means that the subject of the order cannot: Let housing in England Engage in English letting agency work Engage in English property management work Hold a licence under Part 2 or Part 3 of the Housing Act 2004. Banning order : Item Statute Provision Offence 1. Protection from Eviction Act 1977 Section 1(2), (3) and (3A) Unlawful eviction and harassment of occupier 2. Criminal Law Act 1977 Section 6(1) Violence for securing entry 3. Housing Act 2004 Section 30(1) Failing to comply with an improvement notice Section 32(1) Section 72(1), (2) and (3) Section 95(1) and (2) Failing to comply with a prohibition order Offences in relation to licensing of Houses in Multiple Occupation Offences in relation to licensing of houses under Part 3 Section 139(7) Section 234(3) Contravention of an overcrowding notice Failure to comply with management regulations in respect of Houses in Multiple Occupation 7
Section 238(1) False or misleading information 4. Regulatory Reform (Fire Safety) Order 2005 Article 32(1) and (2) Fire safety 5. Health and Safety at Work etc. Act 1974 Section 33(1)(c) where a person contravenes any requirement specified in regulation 36 of the Gas Safety (Installation and Use) Regulations 1998(6) Gas safety - duties on landlords 6. Immigration Act 2014 Section 33A(1) and (10) Section 33B(2) and (4) Residential tenancies landlord Residential tenancies agent 7. Fraud Act 2006 Section 1(1) Fraud Section 6(1) Section 7(1) Possession etc. of articles for use in frauds Making or supplying articles for use in frauds Section 9(1) Section 11(1) Participating in fraudulent business carried on by sole trader etc. Obtaining services dishonestly Section 12(2) Liability of company officers for by company 8. Criminal Justice Act 2003 Schedule 15 Specified violent and sexual 9. Misuse of Drugs Act 1971 Section 8 Occupiers etc. of premises to be punishable for permitting certain activities to take place there Section 9 Prohibition of certain activities relating to opium 8
Section 9A(1) and (3) Prohibition of supply etc. of articles for administering or preparing controlled drugs Section 18(1), (2), (3) and (4) Miscellaneous Section 19 Attempts etc. to commit Section 20 Section 21 Assisting in or inducing commission outside United Kingdom of offence punishable under a corresponding law Offences by corporations 10. Proceeds of Crime Act 2002 Section 327 Concealing etc. criminal property Section 328 Arrangements Section 329 Acquisition, use and possession 11. Protection from Harassment Act 1997 Section 2 Offence of harassment Section 2A Offence of stalking 12. Anti-social Behaviour, Crime and Policing Act 2014 Section 30 Breach of criminal behaviour order Section 48 Failure to comply with a community protection notice 13. Criminal Damage Act 1971 Section 1(1) Destroying or damaging property Section 2 Section 3 Threats to destroy or damage property Possessing anything with intent to destroy or damage property 14. Theft Act 1968 Section 7 Theft Section 9 Burglary Section 21 Blackmail 9
Section 22 Handling stolen goods Item Statute Provision Offence 1. Protection from Eviction Act 1977 Section 1(2), (3) and (3A) Unlawful eviction and harassment of occupier 2. Criminal Law Act 1977 Section 6(1) Violence for securing entry 3. Housing Act 2004 Section 30(1) Failing to comply with an improvement notice Section 32(1) Failing to comply with a prohibition order Section 72(1), (2) and (3) Offences in relation to licensing of Houses in Multiple Occupation Section 95(1) and (2) Offences in relation to licensing of houses under Part 3 Section 139(7) Contravention of an overcrowding notice Section 234(3) Failure to comply with management regulations in respect of Houses in Multiple Occupation Section 238(1) False or misleading information 4. Regulatory Reform (Fire Safety) Order 2005 Article 32(1) and (2) Fire safety 5. Health and Safety at Work etc. Act 1974 Section 33(1)(c) where a person contravenes any requirement specified in regulation 36 of the Gas Safety (Installation and Gas safety - duties on landlords 10
Use) Regulations 1998(6) 6. Immigration Act 2014 Section 33A(1) and (10) Residential tenancies landlord Section 33B(2) and (4) Residential tenancies agent 7. Fraud Act 2006 Section 1(1) Fraud Section 6(1) Possession etc. of articles for use in frauds Section 7(1) Making or supplying articles for use in frauds Section 9(1) Participating in fraudulent business carried on by sole trader etc. Section 11(1) Obtaining services dishonestly Section 12(2) Liability of company officers for by company 8. Criminal Justice Act 2003 Schedule 15 Specified violent and sexual 9. Misuse of Drugs Act 1971 Section 8 Occupiers etc. of premises to be punishable for permitting certain activities to take place there Section 9 Prohibition of certain activities relating to opium Section 9A(1) and (3) Prohibition of supply etc. of articles for administering or preparing controlled drugs Section 18(1), (2), (3) and (4) Miscellaneous 11
Section 19 Attempts etc. to commit Section 20 Section 21 Assisting in or inducing commission outside United Kingdom of offence punishable under a corresponding law Offences by corporations 10. Proceeds of Crime Act 2002 Section 327 Concealing etc. criminal property Section 328 Arrangements Section 329 Acquisition, use and possession 11. Protection from Harassment Act 1997 Section 2 Offence of harassment Section 2A Offence of stalking 12. Anti-social Behaviour, Crime and Policing Act 2014 Section 30 Breach of criminal behaviour order Section 48 Failure to comply with a community protection notice 13. Criminal Damage Act 1971 Section 1(1) Destroying or damaging property Section 2 Threats to destroy or damage property Section 3 Possessing anything with intent to destroy or damage property 14. Theft Act 1968 Section 7 Theft 12
Section 9 Burglary Section 21 Blackmail Section 22 Handling stolen goods References: The Housing and Planning Act 2016 Civil Penalties under the Housing and Planning Act 2016 Guidance for Local Housing Authorities - Department for Communities and Local Government, Published April 2017 *With thanks to Nottingham City Council who developed and implemented this process. 13