Civil penalty policy for landlords

Contents

Introduction

Civil penalty is an alternative to prosecution under the Housing Act 2004, and this document sets out the Council’s policy on deciding when to impose a civil penalty notice and how we will determine the penalty amount.

The legislation is set out in section 249A of the Housing Act 2004 (as implemented by section 126 and Schedule 9 of the Housing and Planning Act 2016) and section 23 of the Housing and Planning Act 2016. It allows financial penalties, up to a maximum of £30,000, to be imposed as an alternative to prosecution for the following housing offences:

failure to comply with an improvement notice (section 30 Housing Act 2004)
offences in relation to licensing of houses in multiple occupation, commonly referred to as HMOs (section 72 Housing Act 2004)
offences in relation to licensing of houses under Part 3 of the Act (section 95 Housing Act 2004)
offences of contravention of an overcrowding notice (section 139 Housing Act 2004)
failure to comply with Management Regulations in respect of houses in multiple occupation (section 234 Housing Act 2004)
breach of a banning order (section 21 of the Housing and Planning Act 2016)

The Council is required to have a policy in place to determine when to prosecute and when to issue a civil penalty. To do this, we have had regard to statutory guidance issued by the Ministry of Housing, Communities and Local Government. This sets out the factors that we must take into account as part of the financial penalty setting process. It places particular emphasis upon the severity of the offence and the landlord’s previous record of offending.

The statutory guidance can be viewed on the GOV.UK website.

In this guidance the term “landlord” also includes property agents (letting agents and property managers).

Decision making process

We will assess each case carefully to identify and apply the appropriate sanction dependent on the severity of the offence and any other relevant circumstances. The same criminal standard of proof is required for a civil penalty as for prosecution for a criminal offence in the Magistrates’ Court, and we need to be satisfied and able to demonstrate beyond reasonable doubt that an offence has been committed. To assist us to do this, we will refer to the Code for Crown Prosecutors.

The Code has two stages:

the evidential stage – is there enough evidence against the defendant?
the public interest stage – is it in the public interest to bring the case to court?

Once satisfied beyond reasonable doubt that the conduct amounts to a relevant offence, we will decide on a case by case basis whether to prosecute or issue a civil penalty notice. Our policy is to use the civil penalty route as the principal way to apply a sanction and to deter re-offending. However prosecution may be the most appropriate option where an offence is particularly serious or where the offender has committed similar offences in the past.

A civil penalty matrix has been created to assist us to determine the most appropriate level of civil penalty, up to a maximum of £30,000. We will use the following factors to help ensure that the civil penalty is set at an appropriate level:

severity of the offence
culpability and track record of the offender
the harm caused to the tenant (this may be actual harm or potential harm)
punishment of the offender
deterring the offender from repeating the offence
deter others from committing the offence
removing any financial benefit the offender may have obtained from committing the offence

The matrix provides transparency in our decision making, aids consistency in the enforcement process and assists in the defending of appeals in the First-tier Tribunal (Property Chamber).

Our policy is to issue the maximum penalty in serious cases and when proportionate to do so. It is intended this will help to achieve the maximum deterrent for criminal landlord behaviour and drive landlord behaviour change.

Procedure for imposing a civil penalty notice

When it has been determined that a civil penalty notice is appropriate, we will follow the following procedure.

We must give the person notice of our proposal by issuing a notice of intent to impose a financial penalty. This must be issued within six months from the date when we have sufficient evidence of the offence to which the financial penalty relates or at any time when the conduct is continuing. The notice of intent must specify:

the amount of any proposed financial penalty
the reasons for proposing the financial penalty
information about the right to make representations to the council

The person who is given a notice of intent may make written representations about the intention to impose a financial penalty.
Following the 28-day period for representations, we will consider the representations and decide:

whether to impose a financial penalty
the amount of any such penalty

If we decide to impose a financial penalty, we must issue a final notice requiring that the penalty is paid within 28 days, beginning with the day after that on which the notice was given. The final notice will specify:

the amount of the financial penalty
the reasons for imposing the penalty
information about how to pay the penalty
the period for payment of the penalty (28 days)
information about the right of appeal to the First-tier Tribunal
the consequences of failure to comply with the notice

We may at anytime, by giving written notice;

withdraw a notice of intent or final notice or
reduce the amount specified in the notice of intent or final notice

Appeals

On receipt of the final notice imposing a financial penalty, the recipient may appeal to the First-tier Tribunal within 28 days, against the decision to impose the penalty or the amount of the penalty. The final notice is suspended until the appeal is determined or withdrawn. The First-tier Tribunal has the power to confirm, vary (increase or reduce) the size of the civil penalty, or cancel it.

Enforcement and consequences of non-compliance

Multiple offences

A civil penalty notice can be issued for each of the offences listed in Part 1 Introduction of this policy. A notice can be issued for each separate breach of the Management of Houses in Multiple Occupation (England) Regulations 2006. However with regard to improvement notices issued for hazards found under the Housing Health and Safety Rating System, only one civil penalty notice can be applied for each notice issued and not for each hazard.

When the Council are satisfied that more than one offence is being committed concurrently, we may issue multiple civil penalty notices. Where satisfied on the merits of a case and/or where we consider that issuing multiple penalties at the same time would result in an excessive cumulative penalty, nothing in this policy shall require the Council to do so. We may decide to take action in respect of one or some of the offences, and warn the offender that future action in respect of the remaining offences will be taken if they continue.

Failure to pay

Where a landlord fails to pay the whole or any part of a civil penalty including after any appeal has been finally determined or withdrawn, we will recover the penalty by order from the county court. If necessary, we will use county court bailiffs to enforce the order and recover the debt. We will also seek to recover the costs incurred in taking this action from the person.

Works in default

Our powers to carry out works in default under the Housing Act 2004 are unaffected by the civil penalty provisions.
Houses in multiple occupation

If a landlord or property agent receives a civil penalty notice, it can be taken into account when considering whether the person is a fit and proper person to be the licence holder for a house in multiple occupation, or any other property subject to licensing.

Database of rogue landlords and property agents

Where a landlord or property agent receives two or more civil penalties over a 12-month period, we will include that person’s details in the database of rogue landlords and property agents. While it is not a compulsory requirement, the government’s civil penalty guidance strongly encouraged councils to do so, to ensure that other councils are made aware that formal action has been taken.

Reduction in penalty

We will take into account mitigating factors, including any admission of guilt. Any reduction in the level of financial penalty will be decided on a case by case basis, with a discount of up to a maximum of a third.

If the person on whom a notice of intent has been served carries out the required works or obligations before the final notice is served, we will consider a reduction of up to one third in the civil penalty applied in the final notice. A discount for an admission of guilt and for completing required works may be applied, but the combined discount will not be greater than one third.

Any reduction must not result in a financial penalty being less than the financial gain received from committing the offence.

Financial hardship

We will make an assessment of a landlord’s assets and all income, and not just rental income, when determining an appropriate penalty. The landlord will have the opportunity to make representations following the service of the notice of intent and may set out any financial hardship in those representations. The onus is placed firmly on the landlord to provide sufficient documented evidence of income. We reserve the right to request further information to support any financial claim and where this is incomplete, appears to be inaccurate, or the person is being deliberately misleading, we may determine that the representations should not be considered.

It should be noted that due to the combination of high property and rental income levels in the Borough of Tunbridge Wells and an upper limit of £30,000 being associated with any civil penalty action, it is unlikely that owners of multiple properties will be able to demonstrate financial hardship.

Income from civil penalties

Any income received from civil penalties will be retained and used, in accordance with regulations, to further our enforcement activities in the private rented sector.

Contact and complaints

If you require any further information or clarification on the civil penalty process the case officer will be able to assist. If after speaking with the case officer, you would like further clarification or to make a complaint, then you should contact the Private Sector Housing Manager as follows:

Private Sector Housing Team
Tunbridge Wells Borough Council
Town Hall
Royal Tunbridge Wells
Kent
TN1 1RS
tel: 01892 554241
e-mail: privatesectorhousing@tunbridgewells.gov.uk

Civil penalty matrix

Factor	Score = 1	Score = 5	Score = 10	Score = 15	Score = 20
Deterrence and prevention	High confidence that a financial penalty will deter repeat offending	Medium confidence that a financial penalty will deter repeat offending	Low confidence that a financial penalty will deter repeat offending	Little confidence that a penalty will deter repeat offending	Very little confidence that a penalty will deter repeat offending
Removal of financial incentive	No signficant assets No or very low financial profit made by offender	Little asset value Little profit made by offender	Small portfolio landlord (2-3 properties) Low asset value Low profit made by offender	Medium portfolio landlord (4-5 properties) or a small managing agent Medium asset value Medium profit made by offender	Large portfolio landlord (over 5 properties) or a medium to large managing agent Large asset value Large profit made by offender
Offence and history	Offence committed with little fault e.g. failings were minor and occurred as an isolated incident or efforts were made to address risk although they were inadequate. Single low level offence. No previous enforcement history.	Offence committed through act or omission which a person exercising reasonable care would not commit. Single offence. Minor previous enforcement.	Offender aware of risk but does not alter actions in light of risk. Offence has moderate severity or small frequent impacts. Recent second time offender. Previous enforcement.	Offender knew their actions were unlawful. Ongoing offence of moderate to large severity or a single instance of a very severe offence. Several previous offences. More than one instance of previous enforcement action.	Offender has intentionally breached or flagrantly disregarded the law. Continuing serious offence. Serial offender. Multiple enforcement over recent times.

Factor	Score = 2	Score = 10	Score = 20	Score = 30	Score = 40
Harm to tenant(s)	Very little or no harm caused. No vulnerable occupants^[1]. Tenant provides no information on impact.	Likely some low level health/harm risk(s) to occupant. No vulnerable occupants^[1]. Tenant provides poor quality information on impact.	Likely moderate level health/harm risk(s) to occupant. Vulnerable occupants^[1] potentially exposed. Tenant provides some information on impact but with no primary or secondary evidence.	High level of health/harm risk(s) to occupant. Tenant(s) will be affected frequently or by occasional high impact occurrences. Vulnerable occupants^[1] more than likely exposed. Small HMO (3 -4) occupants, multiple occupants exposed. Tenant provides good information on impact with primary evidence (e.g. prescription drugs present, clear signs of poor health witnessed) but no secondary evidence.	Obvious high level health/harm risk(s) and evidence that tenant(s) are badly and/or continually affected. Multiple vulnerable occupants^[1] exposed. Large HMO (5+ occupants exposed. Tenant provides excellent information on impact with primary and secondary evidence provided (e.g. medical, social services reports).

Scoring system

each factor is scored in order with one score being chosen for each
all factors are scored
harm to tenants has an additional weighting, which doubles the selected score
the total score for all factors is used to calculate the financial penalty to be levied, below:

Score range	Penalty
1-5	£250
6-10	£500
11-20	£750
21-30	£1,000
31-40	£2,500
41-50	£5,000
51-60	£10,000
61-70	£15,000
71-80	£20,000
81-90	£25,000
91-100	£30,000

Non-exhaustive list of vulnerable occupiers

Young adults and children
Disabled persons
People on a low income
Persons with a drug or alcohol addiction
Victims of domestic abuse
Looked after children
People with complex health conditions
People exploited where English is not their first language
Victims of trafficking or sexual exploitation
Refugees
Asylum seekers
People at risk of harassment or eviction
People at risk of homelessness