Landlords will face fines of up to £40,000 if they fall foul of new complicated rules – and experts warn even those who slip up unintentionally could face steep costs.
The Government published its statutory guidance to local authorities last week, which reveals the level of fines that landlords will face if they break the rules coming into force in May as part of the new Renters’ Rights Act.
On top of this, fines for existing offences will be ratcheted up.
For example, Rent Repayment Order Offences fines will almost double to up to two years’ worth of rent. This could happen, for example, if a landlord has a property that is rented by three or more unrelated people sharing facilities, known as a House in Multiple Occupation (HMO) and they do not have the licence they need.
From December 27, councils will also be granted greater powers to investigate any landlords suspected of failing to comply with the rules.
Experts warn that landlords need to familiarise themselves with the rules to avoid being caught out.
Allison Thompson, national lettings managing director at Leaders, fears that some of the new fines could result in well-meaning landlords getting punished for fairly rudimentary mistakes.
‘The risk now is that well-intentioned landlords are exposed to significant penalties for technical or procedural errors, especially where the rules are new, complex and still bedding in,’ she says.
Allison Thompson, national lettings managing director at Leaders, fears that some of the new fines could result in well-meaning landlords getting punished for fairly rudimentary mistakes
‘Our concern is that the shift from enforcement as a last resort to routine financial penalties may accelerate the number of landlords quitting the market at a time when rental supply is already under pressure.’
‘This is heavy-handed legislation,’ adds Timothy Douglas, head of policy at the estate agent membership body Propertymark. ‘While punishing bad landlords is a good thing, increased fines and doubling of Rent Repayment Orders will be a terrifying prospect to many landlords who are already taxed to the hilt.’
Experts warn repeat offenders who breach the rules could face fines of £40,000.
These are some of the new fines that landlords could face – and the rules they need to be aware of…
Re-letting within the 12-month no-let period
The Renters’ Rights Act, which received Royal assent in October, gives private renters the greatest increase to their rights in a generation.
From May 1, so-called no-fault evictions will be banned, which means landlords will not be able to ask tenants to move out without a good reason.
Renters will be given the right to end tenancies with two months’ notice.
Timothy Douglas, head of policy at estate agent membership body Propertymark, says the legislation will be terrifying for many landlords who are ‘already taxed to the hilt’
Landlords will still be permitted to recover their property if they plan to sell it or if they or a family member plan to move in. But they will not be allowed to evict under these grounds in the first year of a tenancy, and after that they will need to give tenants four months’ notice.
If a landlord gives notice because they plan to sell up and then don’t, they cannot re-let the property for a year. That is to prevent landlords from evicting tenants by falsely claiming they plan to sell and then just getting in new tenants.
But if landlords break these rules, they could be fined £25,000. ‘This feels particularly severe given how easily a landlord could fall foul of it unintentionally,’ adds Thompson.
‘Changes in personal circumstances, failed sales or mortgage issues could all trigger a need to re-let, yet the penalty is close to the level reserved for serious safety breaches.’
l Attempting to let the property for a fixed term
From May 1, all fixed-term assured tenancies and assured shorthold tenancies will be abolished and replaced with rolling periodic tenancies, meaning renters will no longer be tied into long contracts.
Those landlords who continue trying to let on a fixed-term basis could be fined £4,000, under the new rules.
Accepting an offer greater than the advertised rent
In a move to end bidding wars between renters, landlords can accept offers only at the set listed price or below. A landlord found to have accepted more than the advertised rent could face a £4,000 fine.
A landlord can also be fined £3,000 for failing to specify what the rent is in their advert.
Discriminating against tenants on benefits or those who have children
The act will make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children. Those who are deemed to fall foul of this could be dealt a £6,000 fine.
Failing to serve a notice correctly
Landlords must now serve notice under a formal Section 8 process, which requires serving a so-called Form 3 notice to renters for breaches such as owing at least three months’ rent or committing anti-social behaviour or criminal activity. Landlords who try to end the tenancy improperly, such as over the phone, in person or without a valid reason, could face a £6,000 fine.
Unlawful eviction and harassment of tenant
Unlawful eviction and harassment of a renter is defined under the Protection From Eviction Act 1997.
It can include entering the property without the tenant’s permission, changing locks, or threatening to remove essential services such as electricity, gas or water.
An illegal eviction would be when a tenant has been forced to leave without the landlord following the correct legal process, including a court order.
Tenants in this situation could seek help from local councils which will be able to fine the landlord as much as £35,000.
Not keeping property up to the Decent Homes Standard
The Decent Homes Standard sets minimum levels that homes must meet and applies Awaab’s Law – which sets strict timeframes for repairing dangerous hazards like damp and mould – to rented homes. It’s named after Awaab Ishak, a two-year-old who died in 2020 from severe respiratory issues caused by mould.
For landlords who fail to take reasonable steps to keep their properties free of serious hazards, local councils will also have a new power to issue civil penalties of up to £7,000.
- Are you still able to make a good return from buy to let? money@mailonsunday.co.uk
