The Housing and Planning Act 2016 came into force on the 6th of April 2018 and it includes the introduction of a ‘Rogue Landlord’ database. This will list every landlord who has been prosecuted or fined by a Local Authority. Further, the regulations also provide the Local Authority with the power to pursue Banning Orders against landlords. If imposed, these orders will prevent the landlord managing any property for a set period of time, as well as their name appearing on ‘Rogue Landlord’ national database. The implications of this could be quite severe for some.
In previous cases, fines against landlords end up in the pocket of HM Treasury. For these new regulations, any fines imposed on landlords will be for the Local Authority to keep, the hope being, that with a direct financial incentive, LAs will be focussed on outing the issues.
Given how early we are into the new regulations, their success at improving standards remains to be seen. However, it’s the latest of a number of ‘sticks’ the government have been using on landlords and one that could have a severe impact.
A database such as this isn’t new, as a similar one has already been introduced into the London property market by Mayor Sadiq Khan. This database allows anyone to check whether their current or prospective landlord has been prosecuted or fined by a number of London Borough Councils. Just type in the landlord/agent name and the property address and away you go. The database proposed by the Housing and Planning Act 2016 is currently not intended to be publically available, unlike the London database, and more as a tool for Local Authorities. The offences that can lead to being on the database or being faced with a Banning Order include but not limited to:
The Banning Order powers that Local Authorities will now possess will prevent landlords from managing their properties, if any of these offences have taken place. A Banning Order can also be pursued if the landlord has failed to undertake what the Local Authority consider to be ‘necessary’ remedial works. Remedial works does not necessarily mean urgent repair work. The Regulations do not accurately define this and potentially leave it open for Local Authorities to enforce their opinion of ‘necessary’ works. If the landlord refuses to undertake this work for whatever reason (such as legitimate lack of funds), they are liable to be taken to a tribunal by the Local Authority in order to impose a Banning Order. This could result in either imprisonment (unlikely?) or a fine of up to £30k.
Local Authorities therefore have two wins from the introduction of these regulations. Increasing standards of rental properties as landlords wish to avoid a Banning Orders, or receiving fines from those landlords who do not undertake these works. If a Landlord fails to pay the fine, a charge is put on the property.
This is indicative of the general theme running through the industry at the moment where there are many more examples of government using ‘stick’ rather than ‘carrot’ regulations to encourage desired behaviour from landlords. There of course would not be any argument against the move to improve standards, but the proposed set up has the potential to affect all landlords and not just those with genuinely poorly maintained properties.