The Housing Act 2004 introduces licensing for some Houses in Multiple Occupation (HMOs) and in some geographical areas, licensing for other properties too.
There have been a few prosecutions of landlords who have not complied with the new rules but the latest prosecution in Liverpool is believed to be the first where the maximum fine of Â£20,000 has been imposed on a landlord.
Mr Philip Olivier, the landlord, owned a three storey house that fell within the definition of the sort of property that needed licensing under mandatory licensing.
He had failed to license his property in Wellsfield Road, Liverpool and was found guilty on two counts. In addition to the fine of Â£20,000 he was ordered to pay prosecution costs of Â£250 and would have had his own costs on top of this.
After all this he will still have to apply for the licence and do all the necessary works to ensure the property meets the required standards.
This sends a clear message to landlords that they need to take this seriously and failure to do so will hit them hard in their wallet.
In another case in Warwick, landlord was fined only Â£ 1,000 per property for having properties that were not licensed and should have been so (plus Â£1,057.80 in costs).
This level of fine was much lower but resulted in the other penalty contained in the Housing Act, that of a Rent Repayment Order.
The tenants of two of the properties were students and, supported by the housing advice centre at University of Warwick they pursued the landlord through the Residential Property Tribunal Service (RPTS). The students claimed the accommodation was poor and that they received poor service whilst renting it. The RPTS, however, found that the accommodation was above average.
The result was that they were awarded 50% of their rent back, a figure totalling Â£ 18,450. The students claimed a Rent Repayment Order for the period from September 2006 when their tenancy started through to May 2007 when the landlord applied for a licence. If they had been there a full year or been awarded 100% of the figure rather than 50% the award could have been more than double.
Adding this to the potential for the landlord to have had to pay back the rent and been fined like the landlord in Liverpool, it can be seen that this is an area where landlords cannot afford to get it wrong.
TDP progressing slowly
Now that the deposit legislation has been in force for more than 6 months we are beginning to see some of the problems that need addressing when tenants leave. Government is claiming this is a great success. Their latest news release from October says almost 500,000 deposits have been covered in the first 6 months. That amounts to 3,300 per day and totals over Â£450 million.
Although the report says landlords are "embracing it", it is hard to find much enthusiasm and, in truth, most landlords are complying because most landlords are, and always have been, law abiding.
A few problems are beginning to emerge such as tenants of the custodial scheme who have lost their repayment ID.
Although it is early to really have seen any real evidence the fear is that the whole bureaucracy will scare tenants off and they will simply take the easy route of not paying the last month's rent. The custodial scheme have already been surprised by the volume of single claims where a tenant has disappeared. They have not yet had a single claim for a landlord disappearing!