Big Fines: Landlord and Estate Agent Hit in the Pocket

This week’s news is all about big fines that you could easily avoid

The majority of landlords are doing everything by the book. Nobody goes out of their way to break the rules, and most bend over backwards to ensure that every i is dotted and t is crossed, no matter how frustrating it may seem. 

That said, there are always exceptions that prove the rule. Although most landlords are fully compliant with the plethora of rules and regulations that govern the sector, there are a few that continue to bend the rules, earning the title of ‘rental rogues’, and copping hefty fines when caught. 

Rent-to-rent fine

One such landlord is London-based David Ravello, a landlord of a four-bedroom maisonette in the London Borough of Camden. The property is home to five tenants each paying a pricy £800 a month, a nice addition to any portfolio. 

However, with great potential comes great responsibility, and Mr Ravello found himself under scrutiny recently, when it was discovered that he had failed to correctly licence the property under Camden’s HMO licensing regulations. This slip cost him dearly, with a fine of £11,000 being handed out as a penalty. 

The Housing Act 2004 defines houses in multiple occupation (HMOs) as house and flat shares, student homes, bedsits and some buildings converted into flats.  Any properties that contain three or more occupiers forming two or more households who share amenities such as kitchen, bathroom, living area and any communal space require an HMO licence. 

Camden Council has both:

  • Mandatory licensing requirements. These apply to most properties occupied by five or more people forming two or more households, regardless of the number of storeys
  • Additional licensing. This applies to other HMOs not covered by mandatory licensing, including any property occupied by three or more people forming two or more households, including buildings converted into self-contained flats that do not meet the standards of the Building Regulations 1991

Mr Ravello’s property was managed by a managing agent, however the buck stops with the landlord when it comes to getting the correct licensing in place. 

Whilst the managing agent may have been responsible for organising maintenance, rent collection and any day-to-day hiccups, this legal requirement falls firmly at the feet of the landlord. 

Mr Ravello’s defence was that his managing agent had misinformed him of the current licensing status of his property, a defence that was thrown out by the Tribunal, upon hearing that he had a number of other properties that required licences and was therefore deemed fully aware of his requirements as a landlord. Additionally, landlords can check if their property requires a licence using a simple checking tool on the council website, so Mr Ravello’s argument that he was misinformed was pretty weak. 

Whilst £11k is undoubtedly a hefty hit in anyone’s pocket, Mr Ravello actually got away pretty lightly. He could have been hit with a bill of more than £20k, but the Tribunal must have been feeling charitable that day, as they deemed the offence ‘mid-range’ and set the fine accordingly. 

Estate agent fail leads to big fines

Another woeful tale is that of Green House Estate Agents Limited, based in Edmonton, North London. They were billed a massive £35,000 for (among other things) failing to licence three properties. 

The licensing issue prompted further investigation by Enfield Council’s licensing and enforcement team, where it was discovered that the properties in question not only were not licensed, but also had fire safety deficiencies and damp. The investigation also found that Green House failed to provide necessary information to the council and that its listing on Companies House shows filing of its latest accounts is overdue. 

Ensuring that properties are kept in a safe and liveable condition has come under scrutiny recently, with the dawn of the Decent Homes Standard. This change forms part of the upcoming Rental Reform, and will help ensure that all rented homes in the country, whether owned by local authorities or private landlords, are:

  • Meeting the current statutory minimum standard for housing
  • In a reasonable state of repair
  • Providing reasonably modern facilities and services
  • Providing a reasonable degree of thermal comfort (warm and cosy)

The current guidelines are assessed under the housing health and safety rating system (HHSRS), which provides clear guidance on how to minimise hazards and ensure a safe and compliant property – something which it sounds like Green House wasn’t overly familiar with. 

Following the discovery of the litany of issues, Highbury Corner magistrate’s court ordered Green House to pay costs totalling £2,348, plus a surcharge of £2,000 for each offence, bringing the final amount to be paid to £35,000 pounds. 

Susan Erbil, the cabinet member for licensing planning and regulatory said that the council wanted to help the ‘many law-abiding landlords’ in the borough meet the required standards and secure the proper legally required paperwork:

QUOTE: Unfortunately, there are also landlords who break the law by not obtaining the legally required licence to let their properties. The council’s successful prosecution of Green House Estates should be a wake-up call to all unscrupulous landlords who do not comply with the law.

Whilst nobody wants to hear of issues impacting landlords, or indeed their tenants, it is important that issues such as these are investigated. Rogue landlords paint the entire industry in a negative light and do a real disservice to the thousands of landlords who work hard to ensure that they provide the very best accommodation for their tenants. 

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