Phil is Director of Compliance Services and co-founder of Landlord Licensing & Defence, defending landlords against overly aggressive enforcement and fines by councils and advising on regulatory compliance, housing health and safety (HHSRS) and fire risk assessment. He is a Certified HHSRS practitioner, Certified fire risk assessor, Certified damp assessor as well as having been a landlord and property developer for many years.
Tougher enforcement is a large, but not well publicised part of the upcoming Renters Rights Act (RRA).
Readers may know that the Bill has now completed its passage of The Lords and is expected to achieve Royal Ascent just prior to the part conference season which commences on 13th September.
As well as increasing the maximum ‘per breach’ fine from £30,000 to £40,000, the RRA will introduce a raft of new ‘crimes’ for which councils can meet out these fines to unwary landlords – including several related to the administrative process of creating tenancies.
Also hidden away in the detail of The Bill (and fully expected to make it unscathed into the final RRA) are two further important changes:
- Councils will no longer have the choice to whether to enforce against landlords in breach of any aspect of the Housing Act 2004 and many of the other 190+ pieces of legislation landlords are required to comply with. In the RRA it will become a ‘duty to enforce’.
- Council enforcement officers are being given the power to enter and inspect your property on the most flimsy of pretexts by giving the tenant 24 hours’ notice. N.B: That’s the tenants, not the landlord, nor your agent!
Now the theory, as ever, is that these powers are being handed out to enable the prosecution of rogue landlords.
However, what we see daily at Landlord Licensing & Defence in the thousands of landlord cases we defend, is that the majority use of existing powers are used against reasonable but not perfect landlords.
The reasons are not difficult to see. Councils are cash-strapped and the combination of licensing schemes and the eye-watering fines that the current and new legislation allow councils to impose fines (and keep the cash) makes a compelling business model for finding the softest targets, the low-hanging fruit of well meaning, decent landlords, who are not 100% up on the totality of legislation and regulatory compliance.
Will this new covert inspection power be abused by council enforcement officers?
Unequivocally it will as they abuse their powers already. This one will be a new magic money tree.
But mostly it won’t be against real rogue landlords – they are too much trouble to deal with – and even if the council tracks them down and fines them, the council knows it will never collect the fine money. And without the fine money they don’t have any cash to pay the enforcement officers – so instead they’ll go where the easy cash is to be made – landlords like you and me.
As an aside, my team assess many hundreds of landlord properties annually – on behalf of the landlord – to advise the landlord where their property falls short of regulatory compliance. We find that whether the landlord is a 1/2 properly landlord, or a large portfolio landlord, in over 90 per cent of the properties inspected there are ‘breaches’ that are under the legislation criminal, and for which the council could pursue enforcement and fines.
Obviously, the purpose of such inspections is to inform and protect the landlord so that rapid works can be undertaken to upgrade the property so that in short order there would be no breaches for the council to find and fine.
Can the council impose ‘on the spot’ fines when they undertake these inspections?
In effect the answer is yes and in fact they already do. This new power of easy access to your property just makes it easier for them.
So putting together the 90+ per cent incidence of enforceable breaches we see in ‘reasonable landlord’ properties, and the fact you’ll have no idea that the council has inspected one of your properties, the first thing you’re likely to know is when a ‘Notice of Intention to Impose a Financial Penalty’ lands by post at your registered office address telling you the council plans to issue a fine of usually several £10,000s.
Licensed properties are some of the easiest for the council to fine as any breach of a licence condition is a criminal offence and it is strict liability – so if the fire detector was removed from the ceiling or a fire door defective at the moment the council secretly inspected then “slam-dunk”, just like speeding you are guilty and they can choose whether to prosecute you in court or raise fines to feed their revenue budget.
You cannot argue that you were not guilty; and indeed, anything you yourself say to the council, you can expect them to use in evidence against you, since, by trying to ‘explain’, landlords invariably self-incriminate.
The defence in such cases is one of expert analysis of how (and very often not) the council has followed its own process; and negotiating the proportionality of the fine.
HMOs are easy prey for councils as the HMO Management Regulations are also ‘strict liability’, and councils have a frightening degree of ‘flexibility’ in deciding that you are in breach. These regulations apply to all HMOs from 3-persons upwards and to flats converted before the introduction of Building Regulations in 1991.
HHSRS – the housing health and safety rating system – applies to all the properties and they can use this too (although this makes more work for them so they prefer the strict liability ‘on the spot’ fire methods wherever they can).
Final word
- If you get wind that a property has been inspected, get in there immediately with a trusted compliance specialist and bring it up to 100 percent compliance immediately – this can help mitigate the fines;
- If a Civil Penalty Financial Penalty (fine) notice arrives, do not respond. Do not communicate with the council. Immediately appoint a specialist in Housing Act law and compliance to defend you. (NB very few solicitors have this specialism, and the solution to your predicament is rarely points of law bur points of process, procedure, challenging the claimed degree of breach and negotiation)
- Of course the best insurance is to ensure that all of your properties are compliant BEFORE the council sneaks in without your knowledge.
Councils love portfolio landlords because they reason (usually correctly) that if one of your properties has shortcomings, they can expect to find the same breaches at them all. So they will rapidly inspect all of your properties and enforce for massive fines against each property as they work through your portfolio to feed their new magic money tree.
