As a landlord, you have to know the laws and regulations that apply to your rental properties. From penalties for illegal eviction to unlimited fines for lack of proper licensing, failing to comply with regulations can be costly and damaging to your reputation. An offence might result in you being banned from letting and even ending up in a database of rogue landlords.
In this article, we'll explore some of the most common fines and penalties that landlords face and provide tips on how to avoid them.
These are the most common penalties landlords in the UK face:
Failing to obtain the correct licence is one of the common reasons for costly landlord fines. To avoid this fine, visit your local council’s website and research the required licences and permits in your area. Make sure you obtain them before you start renting out your property.
Watch out for these licence fines:
If you fail to obtain an HMO licence when renting to more than 3 individuals from different households, you could be prosecuted in court. If convicted, you could face an unlimited fine (often in the range of £10,000-£40000). In addition, your tenants may be able to apply for a Rent Repayment Order for up to 12 months' rent, which means that you would have to pay back a portion of the rent you collected during the period that the property was unlicensed.
Some local authorities require landlords to obtain a Selective license to rent out their properties in certain areas. If you fail to comply with the selective licencing scheme, you risk prosecution and unlimited fines.
Landlords cannot illegally evict their tenants, for example, by changing the locks or physically removing them from the property. There’s a penalty for illegal eviction in the UK, and the tenant can apply to the court for compensation. Although there’s no maximum penalty, some landlords face illegal eviction penalties of £13,000 and even several years of imprisonment.
When deciding the compensation, the courts will look at how the illegal eviction affected the tenant, considering factors like the time they spent without a home. Take the famous Cashmere v Walsh case, where the court ordered a hefty fine of £81,215 in compensation. On top of that, the tenant gets to stay in the property.
On top of that, your tenant has the right to stay in the property, which can be frustrating if a mistake, like an incorrect date on a form, led to the eviction being overturned.
Renting out a property to someone who does not have the legal right to rent in the UK is a serious offence that can result in significant penalties for landlords. Here's what can happen if a landlord rents illegally to someone who doesn’t have the right to rent:
civil penalties: up to £3,000 per tenant. These penalties are issued by the Home Office and can be appealed if the landlord believes they have been issued incorrectly.
criminal penalties: in serious cases, illegal renting can result in criminal charges, including fines and imprisonment. Landlords can face up to 5 years in prison and/or an unlimited fine for renting to illegal immigrants.
To avoid these penalties, you must ensure that your tenants have the legal right to rent in the UK. Always check the tenant's identity documents and take copies of them, ensuring they are genuine and up to date. Moreover, conduct regular checks to ensure that the tenant continues to have the right to rent in the UK.
In the UK, landlords who harass their tenants, for example, by entering the property without notice, refusing to carry out repairs or making threats, can be fined or even face imprisonment.
The penalty for harassment varies depending on the severity of the offence, but fines can range from several hundred to thousands of pounds. Imprisonment can range from several months to several years, depending on the offence.
The 'fitness for habitation' standards were introduced in 2019 to ensure that rental properties in England are safe, healthy, and free from hazards. These standards cover a range of issues, including sanitation, ventilation, heating, and lighting.
If a rental property does not meet these standards, the tenant can take legal action against the landlord and claim compensation. The amount of compensation awarded is at the discretion of the judge.
Regular inspections and maintenance can help ensure that the property remains in good condition and that any issues are addressed promptly. Failing to maintain your property, you risk becoming a ‘slum landlord’ or ‘slumlord’ and damaging your reputation.
As a landlord, it's important to ensure that your rental property is safe for your tenants to live in. Failure to address safety breaches can result in serious consequences, including legal action, landlord fines, and even criminal charges. Here’re some common safety breaches that landlords should be aware of:
Failure to comply with fire safety regulations can endanger tenants' lives and result in prosecution and potentially unlimited fines. Landlords must ensure that their properties have adequate smoke alarms, carbon monoxide detectors, and fire extinguishers, and that all electrical and gas appliances are regularly maintained and safe to use.
Electrical safety breaches can also result in significant fines of up to £30,000. Landlords must ensure that all electrical installations and appliances in their rental properties are safe and regularly maintained by a qualified electrician.
Landlords must ensure that their properties have a minimum Energy Performance Certificate (EPC) rating of E, or they may face fines of up to £5,000. You also may be prohibited from renting out your property until you make the necessary improvements.
Landlords must ensure that their properties are properly insulated, have energy-efficient heating and hot water systems, and are fitted with energy-efficient lighting. They should also consider improving the property's energy efficiency, such as installing double-glazed windows to improve the EPC rating.
The Tenancy Fees Act prohibits landlords from charging tenants certain fees, such as for referencing or administration. The act also limits the amount for other fees, such as holding deposits. Landlords who breach the act may be fined up to £5,000 for the first offence and face an unlimited fine for reoffending within 5 years.
To avoid breaching the Tenancy Fees Act, landlords should ensure that they’re aware of the permitted fees and limits.
Protecting a tenant's deposit is a legal requirement in the UK. Landlords must place the deposit in a government-approved tenancy deposit protection scheme within 30 days of receiving it. You must also return the deposit to the tenant at the end of the tenancy in accordance with the scheme's rules and regulations.
Failure to protect the deposit can result in fines of up to 3 times the amount of the deposit.
Here’re some tips to avoid getting fined as a landlord in the UK:
By following the tips mentioned above, you can minimise the risk of facing fines and legal issues as a landlord. Providing safe and comfortable living environments for your tenants and complying with regulations will also help you attract and retain good tenants, and improve your reputation in the industry.
This article is for informational purposes only. Please consult the appropriate authorities or a lawyer for legal advice.
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