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Under new powers local authorities will be able to take quick action to hand out civil penalties to landlords and property managers who don’t have licenses and whose properties don’t meet licensing standards. This includes landlords who fail to comply with an improvement notice served by the council, breaches of HMO management, HMO licensing, selective licensing and overcrowding rules.
If you’re a landlord, property manager or agent you can’t take the risk of getting caught - a £30,000 fine would be a crippling expense for most portfolios or businesses, not to mention the reputational damage for an agent or property management company.
A shift in prosecution patterns
There’s already been an increase in prosecution activity: Barnet Council have handed out over £200,000 in fines, Islington and Brent have issued individual fines or rent repayment orders ranging from £20,000 to £40,000.
Previously, local authorities bore the cost of investigation and central government acquired the proceeds. Under the new rules, the proceeds of civil penalties are now kept locally, and some agents and landlords worry this will become an easy way to generate income for cash-strapped local authorities.
Kate Faulkner one of the UK’s top property experts explains “education and knowledge of the 400 plus rules and regulations on lettings, including licensing, is poor in this country. Lenders, insurance and legal companies don’t insist on any evidence a property is being let legally, including sight of any required licences prior to supporting a property’s purchase so if a landlord doesn’t use a qualified ARLA, NALS, UKALA or RICS agent who are most likely to be trained in lettings legals, properties can be bought and rented without the landlord having a clue of their responsibilities.”
Lack of consistency means tracking licensing schemes is onerous
In addition to education issues, licensing requirements differ throughout the UK, from one local authority to another, and often from one side of a street to another.
Geographic variance is perfectly understandable - licensing schemes are designated to raise standards, tackle anti-social behaviour and designed at the local government level to best fit the area’s needs.
However there is an inconsistency in the presentation of this information leaving the responsible landlords and property managers confused and at risk of penalties. If someone is going to be fined, make sure the information was easy to get to in the first place.
Searching Conwy’s local authority website specifically for information on their Additional HMO licensing yields no relevant results. So, should landlords assume they do not need a licence, or should they keep searching to be really really sure they don’t need a licence?
Should landlords potentially be fined £30,000 for a faulty technical setting on their local authority’s website which doesn’t search it’s own subdomains for critical information?
There is a solution
GetRentr has created a system which tracks all licensing schemes down to the property level. This helps landlords and agents know which licensing schemes apply anywhere in the UK with a simple postcode lookup. So far they track 520+ different schemes and consultations and can automatically notify you if a change in the law will start (or stop!) affecting a property.
Richard Tacagni, MD of housing consultancy London Property Licensing explains: “Understanding the complexities of property licensing has become a major challenge for landlords and letting agents, yet the compliance risks from getting it wrong are huge. With no consistent national approach to licensing, the service offered by GetRentr marks an important step forward in increasing awareness of licensing schemes”
Orla Shields, CEO of GetRentr says: “With up to date and consistent information, it becomes much faster to help landlords, property managers and tenants know their responsibilities and rights. Our system can analyse portfolios in minutes which typically could take months for large-scale property management companies and letting agents”.
You can find out more about the services that GetRentr offer to agents here
Quote that you are a PRS member to obtain GetRentr's best current offer.
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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015