The upcoming Renters (Reform) Bill poses a danger to landlords who could be hit with massive fines and potential bankruptcy, a housing law specialist has warned.
Des Taylor, a director of compliance service provider Landlord Licensing & Defence, said that the bill will criminalise many common errors and oversights that landlords and agents make, and give local housing authorities (LHAs) the power to impose financial penalties up to £30,000 for each offence of error or oversight.
Taylor said: “The bill will not only end the use of ‘no-fault’ evictions, but also introduce new requirements for landlords to register on a national register and with an ombudsman scheme, to provide meticulously correct paperwork and notice forms to tenants, and to comply with even more standards and regulations.
“Failure to do any of these things exactly, will expose landlords to the risk of hefty fines from LHAs, who will have a statutory duty to enforce them under the bill when it is enacted.”
He added that the bill will also expand the scope of rent repayment orders (RROs), which allow tenants or LHAs to claim back up to 12 months of rent from landlords who have committed certain offences.
Taylor said: “This could be devastating for portfolio landlords who make a small mistake in registering or serving notice.
“They could face multiple RROs and fines, which could wipe out their income and assets.
“The consequences for their tenants’ security of tenure would also be dire.”
Taylor called for a national authority to set the level of fines and RROs, rather than leaving it to the discretion of LHAs.
He said: “We have seen how many LHAs have abused their powers under the Housing and Planning Act 2016, which introduced civil penalties for rogue landlords.
“LHAs have instead targeted the low-hanging fruit of reasonable landlords, not rogues, and imposed exorbitant fines that are massively disproportionate to the offences, often without proper evidence or due process.
“We fear that this will continue under the new bill, unless there is a national framework to ensure consistency and fairness.”