Private sector housing enforcement policy

Introduction

The power to impose a Civil Penalty as an alternative to prosecution for the following offences was introduced by section 126 and Schedule 9 of the Housing and Planning Act 2016.

• Failure to comply with an Improvement Notice (section 30 of the Housing Act 2004);
• Offences in relation to licensing of Houses in Multiple Occupation (section 72 of the Housing Act 2004);
• Offences in relation to licensing of houses under Part 3 of the Act (section 95 of the Housing Act 2004);
• Offences of contravention of an overcrowding notice (section 139 of the Housing Act 2004);
• Failure to comply with management regulations in respect of Houses in Multiple Occupation (section 234 of the Housing Act 2004);
• Breach of a banning order (section 21 of the Housing and Planning Act 2016)

In determining the Civil Penalty amount, Coventry City Council will have regard to the statutory guidance issued under schedule 9 of the Housing and Planning Act 2016 and also to the developed Civil Penalty Matrix.

The approach to issuing a Civil Penalty is fundamentally made up of two stages, firstly determining the appropriate sanction and secondly (if appropriate) the level of Civil Penalty charged.

When determining the appropriate sanction the Council should satisfy itself that if the case were to be prosecuted there would be a ‘realistic prospect of a conviction'. This is currently determined by consulting the Crown Prosecution Service “Code for Crown Prosecutors” which provides two tests: (i) the evidential test and (ii) the public interest test.

Coventry City Council currently consults this code when determining whether to seek prosecution for offences committed and will continue to do so on a case by case basis in line with this procedure and its enforcement policy.

The maximum penalty that can be set is £30,000. A minimum penalty level has not been set and the appropriate amount of penalty is to be determined by the Local Housing Authority. Only one penalty can be imposed in respect of the same offence.

Statutory guidance has been issued by the Secretary of State under Schedule 9 (12) of the Housing and Planning Act 2016 and Local Authorities must have regard to this when exercising its functions in respect of civil penalties.

Paragraph 3.5 of the statutory guidance states that “the actual amount levied in any particular case should reflect the severity of the offence, as well as taking account of the landlord’s previous record of offending”. The same paragraph sets out several factors that should be taken into account to ensure that the civil penalty is set at an appropriate level.

1a: Severity of the offence.

The more serious the offence, the higher the penalty should be.

1b: Culpability and track record of the offender.

A higher penalty will be appropriate where the offender has a history of failing to comply with their obligations and/or their actions were deliberate and/or they knew, or ought to have known, that they were in breach of their legal responsibilities. Landlords are running a business and should be expected to be aware of their legal obligations.

1c: The harm (or potential harm) caused to the tenant.

This is a very important factor when determining the level of penalty. The greater the harm or the potential for harm (this may be as perceived by the tenant), the higher the amount should be when imposing a civil penalty.

1d: Punishment of the offender.

A civil penalty should not be regarded as an easy or lesser option compared to prosecution. While the penalty should be proportionate and reflect both the severity of the offence and whether there is a pattern of previous offending, it is important that it is set at a high enough level to help ensure that it has a real economic impact on the offender and demonstrate the consequences of not complying with their responsibilities.

1e: Deter the offender from repeating the offence.

The ultimate goal is to prevent any further offending and help ensure that the landlord fully complies with all of their legal responsibilities in future. The level of the penalty should therefore be set at a high enough level such that it is likely to deter the offender from repeating the offence.

1f: Deter others from committing similar offences.

While the fact that someone has received a civil penalty will not be in the public domain, it is possible that other landlords in the local area will become aware through informal channels when someone has received a civil penalty. An important part of deterrence is the realisation that (a) the local authority is proactive in levying civil penalties where the need to do so exists and (b) that the level of civil penalty will be set at a high enough level to both punish the offender and deter repeat offending.

1g: Remove any financial benefit the offender may have obtained as a result of committing the offence.

The guiding principle here should be to ensure that the offender does not benefit as a result of committing an offence, i.e. it should not be cheaper to offend than to ensure a property is well maintained and properly managed.

The Council will consider the above factors when deciding where, within the relevant band of the Civil Penalties Matrix below, a particular offence and penalty fall. Further, the Council considers factors (d) to (g) above, inclusive, to be primary objectives of financial penalties and will attach particular weight to them when determining the appropriate level of penalty.

Factors in determining penalty levels

Clearly, a single level penalty will not be appropriate in all cases and when assessing the level of penalty to be imposed it is expected that the maximum amount would be reserved for the worst offenders. The actual amount levied should reflect the severity of the case and the Council will have regard to the following:

• Culpability of the landlord – Factors to take into account when determining the culpability include where the offender:
  • Has the intention to cause harm, the highest culpability where an offence is planned,
  • Is reckless as to whether harm is caused, i.e. the offender appreciates at least some harm would be caused but proceeds giving no thought to the consequences, even though the extent of the risk would be obvious to most people,
  • Has knowledge of the specific risks entailed by his actions even though he does not intend to cause the harm that results; and
  • Is negligent in their actions.

Harm or Potential for Harm

In determining the level of harm the Council will have regard to:

• the person: i.e. physical injury, damage to health, psychological distress;
• the community; i.e. economic loss, harm to public health; and
• other types of harm; i.e. public concern/feeling over the impact of poor housing condition on the local neighbourhood.

The nature of the harm will depend on the personal characteristics and circumstances of the victim, e.g. tenant.

Where no actual harm has resulted from the offence, the Council will consider the relative danger that persons have been exposed to as a result of the offender’s conduct, the likelihood of harm occurring and the gravity of harm that could have resulted.

Factors that indicate a higher degree of harm include:

• Multiple victims;
• Especially serious or psychological effect on the victim; and
• Victim is particularly vulnerable.

Punishment of the Offender

The Council will also have regard to the following:

• A Civil Penalty should not be regarded as an easy or lesser option compared to prosecution;
• The penalty should be proportionate and reflect the severity of the offence; and
• The penalty should be set high enough to help ensure that it has a real economic impact on the offender and demonstrate the consequences of not complying with their responsibilities.

Deter the offender from repeating the offence

• The ultimate goal is to prevent further offending and help ensure the landlord fully complies with all their legal responsibilities in future.
• The level of penalty should be set at a high enough level to deter repeat offending.

Deter others from committing similar offences

• An important part of deterrence is the realisation that the Council is proactive in levying Civil Penalties where the need exists and that the level of Civil Penalty will be set high enough to punish the offender and deter repeat offending.
• Remove any financial benefit the offender may have obtained as a result of committing the offence.
• Ensure that the offender does not benefit as a result of committing an offence i.e. it should not be cheaper to offend than to ensure a property is well maintained and managed.

Determining the amount of civil penalty

In determining the level of a civil penalty, officers will have regard to the matrix set out below, which has been developed taking into the factors set out in the statutory guidance provided by Government.

The matrix is intended to provide an indicative minimum ‘tariff’ under the various offence categories, with the final level of the civil penalty adjusted in each case, and generally within the relevant band, to take into account aggravating and mitigating factors.

The Council may, exceptionally, increase the penalty above the band maximum or, again exceptionally, decrease it below the minimum ‘tariff’. In order to meet the objectives of this policy and of financial penalties in particular, however, including the need for transparency and consistency in the use of such penalties, the Council will exercise its discretion to increase or decrease a penalty beyond band limits in exceptional circumstances only [excluding any Discounts as set out below]. The Council will consider on a case-by-case basis, in light of the information with which it is provided, whether any such circumstances exist.

Aggravating Factors

The starting point for the penalty may be increased by 3% for each aggravating factor up to a maximum of 15% of the initial penalty level.

In order to determine the final penalty, the Council will consider all aggravating factors relevant to the case.

Below is a list that will be considered as part of the determination. This is not an exhaustive list and other factors may be considered depending on the circumstances of each case.

• Previous convictions having regard to the offence to which applies and time elapsed since the offence;
• Motivated by financial gain;
• Lack of co-operation/communication or obstruction of the investigation;
• Deliberate concealment of the activity/evidence;
• Offending over an extended period of time i.e. more than 6 months
• Number of items of non-compliance – greater the number the greater the potential aggravating factor;
• Record of non-compliance;
• Record of letting substandard accommodation;
• Record of poor management/ inadequate management provision;
• Lack of a tenancy agreement/rent paid in cash; and
• Already a member of an accreditation scheme or letting standard

Mitigating Factors

The starting point for the penalty may be decreased by 3% for each mitigating factor to a maximum 15% of the initial penalty level.

In order to determine the final penalty, the Council will consider all mitigating factors relevant to the case.

Below is a list that will be considered as part of the determination. This is not an exhaustive list and other factors may be considered depending on the circumstances of each case:

• Co-operation with the investigation;
• Voluntary steps taken to address issues e.g. submit a licence application;
• Willingness to undertake training;
• Willingness to join Coventry City Council`s landlord accreditation scheme;
• Evidence of health reasons preventing reasonable compliance – mental health, unforeseen health issues, emergency health concerns;
• No previous convictions;
• Vulnerable individual(s) where their vulnerability is linked to the commission of the offence;
• Good character and/or exemplary conduct;
• Early admission of guilt i.e. within 1 month

When considering aggravating and mitigating factors the Civil Penalty imposed must remain proportionate to the offence.

Reference will be made to Magistrates Court Sentencing Council guidelines when considering relevant aggravating and mitigating factors.

An offender will be assumed to be able to pay a penalty up to the maximum amount unless they can demonstrate otherwise.

Illustrative Examples

Failure to comply with an Improvement Notice

Maximum Court fine that can be levied for failure to comply with an Improvement Notice - Unlimited

An Improvement Notice served under Part 1 Housing Act 2004 specifies repairs/improvements that the recipient should carry out in order to address one or more identified Category 1 and/or Category 2 hazards in a property. Category 1 hazards are the most serious hazards, judged to have the highest risk of harm to the occupiers; the Council has a duty to take appropriate action where a dwelling is found to have one or more Category 1 hazards present.

In most cases, the service of an Improvement Notice will have followed an informal stage, where the landlord had been given the opportunity to carry out improvements without the need for formal action. In such cases, an identified failure to comply with an Improvement Notice will represent a continued failure on the part of the landlord to deal appropriately with one or more significant hazards affecting the occupier[s] of the relevant dwelling.

The Council would view the offence of failing to comply with the requirements of an Improvement Notice as a significant issue, exposing the tenant[s] of a dwelling to one or more significant hazards. The civil penalty for a landlord controlling five or fewer dwellings, with no other relevant factors or aggravating features [see below], would be regarded as a serious matter, representing a band 3 offence, attracting a civil penalty of at least £10,000.

Where a landlord or agent is controlling/owning a significant property portfolio and/or has demonstrated experience in the letting/management of property the failure to comply with the requirements of an Improvement Notice would be viewed as being a severe matter attracting a civil penalty of £20000 or above.

Aggravating features/factors specific to non-compliance with an Improvement Notice

• The nature and extent of hazards that are present. Multiple hazards and/or severe/extreme hazards that are considered to have a significant impact on the health and/or safety of the tenant[s] in the property would justify an increase in the level of the civil penalty

Generic aggravating features/factors

The Council will have regard to the following general factors in determining the final level of the civil penalty:

• A previous history of non-compliance would justify an increased civil penalty. Examples of previous non-compliance would include previous successful prosecutions [including recent convictions that were ‘spent’], works in default of the landlord and breaches of regulations/obligations, irrespective of whether these breaches had been the subject of separate formal action
• Any available information regarding the financial means of the offender, not restricted to just rental income from the rented home[s]

Failure to License offences

Maximum Court fine that can be levied for failure to license an HMO or Part 3 House – Unlimited

Failure to license a Mandatory ‘HMO’

Under Part 2 Housing Act 2004, most higher risk HMOs occupied by five or more persons forming two or more households are required to hold a property licence issued by the local authority. HMO licensing was introduced to allow local authorities to regulate standards and conditions in high risk, multiply occupied residential premises. Through the property licence regime, local authorities ensure that the HMO has sufficient kitchens, baths/showers and WCs and place a limit on the number of persons permitted to occupy it and the licence holder is required to comply with a set of licence conditions.

The Council would view the offence of failing to license an HMO as a significant failing; Licensing was introduced by the Government in order to regulate management, conditions, standards and safety in the properties considered to represent the highest risk to tenants as regards such matters as fire safety and overcrowding.

Under the Council’s policy the civil penalty for a landlord controlling one or two HMO dwellings, with no other relevant factors or aggravating features [see below] would be regarded as a serious matter, representing a band 3 offence, attracting a civil penalty of at least £10000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property, the failure to license an HMO would be viewed as being a severe matter attracting a civil penalty of £20000 or above [a band 5 offence]

Aggravating features/factors specific to non-licensing offences

• The condition of the unlicensed property. The nature and extent of any significant hazards that are present would justify an increase in the level of the civil penalty. Equally, an HMO that was found to be poorly managed and/or lacking amenities/fire safety precautions and/or overcrowded would also justify an increased civil penalty
• Any demonstrated evidence that the landlord/agent was familiar with the need to obtain a property licence e.g. the fact that they were a named licence holder or manager in respect of an already licensed premises

Generic aggravating features/factors

As set out under ‘Improvement Notice’ above

Failure to license a property under the Council’s Additional [HMO] Licensing Scheme

The Council has designated the whole of the borough as an additional licensing area. The scheme came into force on 4 May 2020 and expires on 5 May 2025. Under the scheme, all HMOs occupied by three or more persons forming two or more households sharing one or more basic amenities such as a WC or kitchen, but which fall outside the scope of mandatory HMO licensing, will be required to hold an additional licence in order to be legally let as well as those HMOs that fall within the definition of self-contained flats under Section 257 of the Housing Act 2004.

The Council would view the offence of failing to license an HMO under its additional licensing scheme as a significant failing. The Council has introduced additional HMO licensing, amongst other reasons, in order to regulate management, conditions, standards and safety in the properties considered to represent a higher risk to tenants as regards such matters as fire safety and overcrowding compared with properties occupied by a single-family household.

Under the Council’s policy the civil penalty for a landlord controlling one or two HMO dwellings, with no other relevant factors or aggravating features [see below] would be regarded as a moderate matter, representing a band 2 offence, attracting a civil penalty of at least £5000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property, the failure to license an HMO would be viewed as being a serious matter attracting a civil penalty of £15000 or above [a band 4 offence]

Aggravating features/factors specific to non-licensing offences

• The condition of the unlicensed property. The nature and extent of any significant hazards that are present would justify an increase in the level of the civil penalty. Equally, an HMO that was found to be poorly managed and/or lacking amenities/fire safety precautions and/or overcrowded would also justify an increased civil penalty
• Any demonstrated evidence that the landlord/agent was familiar with the need to obtain a property licence e.g. the fact that they were a named licence holder or manager in respect of an already licensed premises

Generic aggravating features/factors

As set out under ‘Improvement Notice’ above

Breach of licence conditions

Maximum Court fine that can be levied for failure to comply with a licence condition - unlimited

All granted property licences impose a set of conditions on the licence holder. These conditions impose a variety of obligations relating to the letting, management and condition of the rented property, including:

• Undertaking Gas Safe and electrical checks
• Installing and maintaining smoke alarms
• Obtaining tenant references, providing written tenancy agreements and protecting deposits
• Notifying the Council in any specified changes in circumstances
• Carrying out specified measures to prevent or address anti-social behaviour
• Maintaining the property in reasonable repair
• Ensuring that the gardens are tidy and free from refuse
• For HMO, licences granted under part 2, carrying out works that were a condition of the granted licence or reducing occupation levels as necessary

It is important that the manager of a licensed property complies with all imposed conditions, but the Council recognises that a failure to comply with certain licence conditions is likely to have a much bigger impact on the safety and comfort of residents than others.

In determining the level of a civil penalty, the Council will therefore initially consider;

1. The number and nature of the licence condition breaches; and
2. The nature and extent of deficiencies within each specified licence condition

Clearly, the circumstances of a breach of licence condition offences have the potential to vary widely from case to case but, as a guide:

• The civil penalty for a landlord controlling five or fewer dwellings [or 1 or 2 HMOs], with no other relevant factors or aggravating features [see below], for a failure to provide tenants with their contact details or for failing to address relatively minor disrepair would each be regarded as a moderate band 1 offence, attracting a civil penalty of £1000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property, these same offences would be regarded as a moderate band 2 offence, attracting a civil penalty of £5000 for a ‘professional’ landlord or agent.
• The civil penalty for a landlord controlling five or fewer dwellings [or 1 or 2 HMOs], with no other relevant factors or aggravating features [see below], for a failure to provide or maintain smoke alarms in working order, to fail to address serious ASB issues such as the use of licensed premises for illegal purposes or the failure to carry out works/improvements imposed as a condition of a granted HMO licence would each be regarded as a serious band 3 offence, attracting a civil penalty of at least £10000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property, these same offences would be regarded as a severe band 5 offence, attracting a civil penalty of £20000 or above for a ‘professional’ landlord or agent.

Aggravating features/factors specific to non-licensing offences

• None – the nature of the licence condition breaches and their impact upon the occupiers would be an integral part of the initial assessment process

Generic aggravating features/factors

As set out under ‘Improvement Notice’ above

Failure to Comply with The Management of Houses in Multiple Occupation [England] Regulations

Maximum Court fine that can be levied for failure to comply with each individual regulation - unlimited

The Management of Houses in Multiple Occupation (England) Regulations 2006 impose duties on the persons managing certain HMOs in respect of:

• Regulation 3 - Providing information to occupiers
• Regulation 4 - Taking safety measures, including fire safety measures
• Regulation 5 - Maintaining the water supply and drainage
• Regulation 6 - Supplying and maintaining gas and electricity, including having these services/appliances regularly inspected
• Regulation 7 - Maintaining common parts
• Regulation 8 - Maintaining living accommodation
• Regulation 9 - Providing sufficient waste disposal facilities

Note - The Licensing and Management of Houses in Multiple Occupation (Additional Provisions) (England) Regulations 2007 place similar obligations on the managers of HMOs as defined by Section 257 Housing Act 2004.

It is important that the manager of an HMO complies with all regulations, but the Council recognises that a failure to comply with certain regulations is likely to have a much bigger impact on the safety and comfort of residents than others. Furthermore, and using Regulation 8 as an example, a breach of this regulation could relate to defects to an individual window in one HMO but multiple defects to the structure, fixtures & fittings in a number of rooms in a second HMO.

In determining the level of a civil penalty, the Council will therefore initially consider;

1. The number and nature of the management regulation breaches; and
2. The nature and extent of deficiencies within each regulation

Clearly, the circumstances of HMO Management Regulation offences have the potential to vary widely from case to case but, as a guide:

• The civil penalty for a landlord controlling one or two HMO dwellings, with no other relevant factors or aggravating features [see below], for a failure to display a notice containing their contact details or for failing to address relatively minor disrepair would each be regarded as a moderate band 1 offence, attracting a civil penalty of £1000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property these same offences would be regarded as a moderate band 2 offence, attracting a civil penalty of at least £5000 for a ‘professional’ landlord or agent.
• The civil penalty for a landlord controlling one or two HMO dwellings, with no other relevant factors or aggravating features [see below], for a failure to maintain fire alarms in working order, to maintain essential services to an HMO or to fail allow an HMO to fall into significant disrepair would each be regarded as a serious band 3 offence, attracting a civil penalty of at least £10000. Where a landlord or agent is controlling/owning a significant property portfolio, and/or has demonstrated experience in the letting/management of property these same offences would be regarded as a severe band 5 offence, attracting a civil penalty of £20000 or above for a ‘professional’ landlord or agent.

Aggravating features/factors specific to non-licensing offences

• None – the nature of the Management Regulation breaches and their impact upon the occupiers would be an integral part of the initial assessment process

Generic aggravating features/factors

As set out under ‘Improvement Notice’ above

Process

The procedure for imposing a civil penalty is set out in Schedule 13A of the Housing Act 2004 and Schedule 113 of the Housing and Planning Act 2016 and summarised below.

Coventry City Council must give the person a notice of its proposal (‘notice of intent’) to impose a civil penalty. The notice of intent must set out:

• the amount of the proposed financial penalty;
• the reasons for proposing to impose the penalty; and
• information about the right of the landlord to make representations

The notice of intent must be given no later than 6 months after the authority has sufficient evidence of the conduct to which the penalty relates, or at any time when the conduct is continuing.

A person who is given a notice of intent may make written representations to the local housing authority about the intention to impose a financial penalty. Any representations must be made within 28 days from the date the notice was given.

After the end of the period for representations, the local housing authority must decide whether to impose a penalty and, if so, the amount of the penalty. If the authority decides to impose a financial penalty, it must give the person a notice (‘final notice’) requiring that the penalty is paid within 28 days.

The final notice must set out:

• 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 rights of appeal; and
• the consequences of failure to comply with the notice.

The local housing authority may at any time:

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

On receipt of a final notice imposing a financial penalty a landlord can appeal to the First Tier Tribunal against the decision to impose a penalty and/or the amount of the penalty. The appeal must be made within 28 days of the date the final notice was issued. The final notice is suspended until the appeal is determined or withdrawn.

Civil Penalties – Multiple Offences

Where the Local Housing Authority are satisfied that more than one offence is being committed concurrently in respect of a single property, they may issue multiple Civil Penalty Notices, (for example, where there are multiple breaches of the HMO Management Regulations).

However, where satisfied on the merits of the case and/or where the authority consider that issuing multiple penalties at the same time would result in an excessive cumulative penalty, nothing in this policy shall require the authority to do that. The authority may 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.

Discounts

The Council will automatically apply the following discounted rates to any imposed financial penalties in the following circumstances:

• In the event that the offender complied with the identified breach [for example by making an application to license a previously unlicensed address] within the representation period at the ‘Notice of Intent’ stage, the Council would reduce the level of any imposed civil penalty by 20%;

Illustrative example

The landlord of an HMO property fails to obtain a licence. They only operate one HMO and there are no other relevant factors or aggravating features. The offence is regarded as a serious matter, representing a band 3 offence, attracting a civil penalty of at least £10,000. Upon receipt of the ‘Notice of Intent’ to impose a £10,000 financial penalty, the landlord makes a complete application for the HMO licence within the period allowed for representations. No other representations [or representations that are upheld] are made to the Council.

The Council issues a ‘Final Notice’ imposing a financial penalty of £8,000 [£10,000 with a 20% discount having been deducted due to compliance during the representation period].

Totality of offences

When arriving at penalty levels the total is inevitably cumulative, however the Council will determine the fine for each offence based on the relevant criteria above so far as they are known, or appear, to the Council and add up the penalties for each offence and consider if they are just and proportionate. If the aggregate total is not just and proportionate the Council will consider how to reach a just and proportionate penalty level.

There are a number of ways in which this can be achieved, for example:

• where an offender is to be fined for two or more offences that arose out of the same incident or where there are multiple offences of a repetitive kind, especially when committed against the same person, it will often be appropriate to impose for the most serious offence a fine which reflects the totality of the offending where this can be achieved within the maximum penalty for that offence.
• where an offender is to be fined for two or more offences that arose out of different incidents, it will often be appropriate to impose a separate fine for each of the offences. The Council will add up the fines for each offence and consider if they are just and proportionate. If the aggregate amount is not just and proportionate the Council will consider whether all of the fines can be proportionately reduced. Separate fines will then be considered. Where separate fines are passed, the Council will be careful to ensure that there is no double-counting.