17. Penalties
The licensing process can be time-consuming and, in some instances, complicated and it is therefore important that the landlords or licensees of those properties that will fall within the additional licensing scheme are proactive in applying for their licences. Time spent by officers to identify and investigate non-compliant unlicensed but licensable properties, has significant impact on the overall success and efficiency of the scheme and other HMO-related work.
To encourage landlords/licensees to submit applications for licences in good time and before officers discover them through investigative work or complaints received, a penalty regime will be in place. This is in the form of reduced licensing periods, as detailed below:
|
Penalty schedule |
Length of licence |
|---|---|
|
Application submitted within three months of commencement of an additional HMO licensing scheme. |
Licence issued for five-year duration |
|
Application submitted after three months of the commencement date of the additional HMO licensing scheme but prior to investigation and/or contact by the Private Sector Housing team. |
Licence issued for three-year duration |
|
Application submitted after three months of the commencement date of the additional HMO licensing scheme but after investigation and/or contact by the Private Sector Housing team. |
Licence issued for two-year duration |
|
Application where a property is found to have been operating without a licence under the mandatory HMO licensing scheme for more than three months, following receipt of a complaint or as a result of other investigations. |
Licence issued for one-year duration |
The responsible person may also be subject to enforcement action, for example prosecution or issuing of a penalty notice.
Rent Repayment Orders
The Housing Act 2004 introduced Rent Repayment Orders (RRO) to cover situations where the landlord of a property had failed to obtain a licence for a property that was required to be licensed, specifically offences in relation to licensing of Houses in Multiple Occupation and offences in relation to licensing of houses under Part 3 of the Act. Rent Repayment Orders were extended through the Housing and Planning Act 2016 to cover a much wider range of offences. An unlicensed property subject to a RRO imposed by the local authority, can require the landlord to repay up to 12 months’ worth of rent. If rent was paid through Housing Benefit or through the housing element of Universal Credit, then the rent must be repaid to the local housing authority. If the tenant paid their rent themselves, then the rent must be repaid to the tenant. If the rent was paid partially by the tenant with the remainder paid through Housing Benefit/Universal Credit, then the rent should be repaid on an equivalent basis. Failure to comply risks being issued with a banning order that prevents the property from being let. Serious and repeat offences may result in prosecution, a sentence of up to five years, and an uncapped fine. The landlord may also be listed on the government’s Rogue Landlord database. An unlicensed property also means that the property manager cannot serve the occupier with a section 21 eviction notice under the Housing Act 1988, potentially preventing them from regaining possession of the property at the end of a tenancy agreement.
The penalty fees (and any other additional fees) proposed for the additional HMO licensing scheme will also be applied to the already existing mandatory HMO licensing arrangements to ensure consistency across the entire licensing regime within the district.