A guide to HMO licence fines and other fines for landlords

A guide to fines for landlords

HMO licence fines

You could be fined for renting a property out to more than one household without the right licence.

A property is a house in multiple occupation (HMO) if at least three tenants live there, forming more than one household (for instance, these tenants are unrelated). Bathrooms, toilets, and other amenities will be shared by these tenants.

A property is a large HMO if at least five tenants live there (forming more than one household), and facilities like bathrooms and kitchens are shared between tenants.

You must meet HMO obligations and safety checks, including making sure the property is not overcrowded and that there are enough facilities for people living there. You’re responsible for repairs to communal areas.

If a property is a large HMO then you need a license from your council. Some councils need other HMOs to be licensed, so be sure to check with your local authority.

HMO fines and penalties depend on your local council but can include:

• prosecution and unlimited fines
• rent repayment orders, which your tenants can use to reclaim up to 12 months of rent
• management orders, which your council can use to take over managing your HMO

HMO fines for safety breaches

As above, landlords need to meet specific HMO obligations – these can vary from council to council. HMOs should be safe and provide all the basic conditions for living (for instance, it should be big enough with no overcrowding).

A Brighton landlord was fined £43,680 in 2017 for breaching safety obligations. At the time, it was Brighton Magistrates Court’s biggest fine on record.

The property had an obstructed fire escape, unsatisfactory fire equipment and alarms, tiny bedrooms, and 12 tenants (the property was licensed for just nine).

Landlord gas, fire and electrical safety fines

Landlords have gas, electrical, and fire safety responsibilities. Breaking them puts your tenants lives at risk and can incur significant penalties.

• gas safety certificates – a registered Gas Safe engineer should complete an annual gas safety check and you need to supply the certificate to your tenants
• electrical safety certificates – a qualified person needs to test electrical safety at least every five years
• fire safety obligations – you need to make sure the fire alarms are working and that there’s one on each storey

Fines vary depending on the severity of the situation, but they can reach huge sums:

• gas safety breaches can lead to prosecution and unlimited fines
• electrical safety rule breaches can lead to a £30,000 fine
• fire safety breaches can lead to prosecution and unlimited fines

As an example, a rogue landlord in Westminster was fined £214,000 in 2017 for putting his tenants’ lives at risk across various properties in London.

One of his properties was found to have an exposed live electrical cable on the electric cooker hob, posing a risk of electrocution.

Another property had inadequate safety measures. In terms of fire safety, there was no safe exit route in the event of a fire and the landlord was unable to supply gas and electrical certificates.

Landlord fines for illegally converting houses into flats

There are different types of residence for planning purposes, including houses, flats, and HMOs. Planning permission is automatically required when there’s a material change in use of the property.

Subdivisions (where a property is converted from one big flat into two smaller ones, for instance) are generally treated as a material change in use. HMOs also need to meet specific obligations and safety checks (as mentioned above).

There are minimum space requirements too, so always get planning permission from your local authority.

Fines vary, but there are many stories about rogue landlords receiving huge penalties for not getting planning permission. One landlord in Maida Vale, London, was fined over £500,000 for converting four floors of one property into eight flats.

Landlord illegal tenant eviction fines

Landlord harassment (such as changing locks) is a criminal offence that can lead to illegal eviction (also a criminal offence). Landlords can go to jail, plus tenants can claim damages and compensation.

To legally evict someone, you should follow three steps:

• you need to give your tenant at least two months' written notice of eviction (known as a Section 21 notice if you want your property back after a fixed agreement ends, or a Section 8 notice if your tenants have broken the terms of the tenancy) – but evictions are currently banned because of coronavirus
• you need to get a court order for them to leave the property
• only a bailiff can evict your tenant, providing they have a warrant from the court

A Sheffield landlord was convicted and ordered to pay a total of £3,700 in fines and compensation in 2017, after serving a tenant notice to move out and then removing and changing the locks only days later.

Other fines for landlords

• fines of up to £30,000 for breaching the Tenancy Fees Act, which outlaws charging tenants most fees (like fees for referencing, credit checks, and administration)
• various fines for breaching the Minimum Energy Efficiency Standards (MEES), including one for £4,000 for letting out a non-compliant property for more than three months

• deposit protection scheme breaches can lead to you repaying the deposit plus compensation to your tenant

More guides for buy-to-let landlords

• A guide to landlord boiler responsibilities
• What the Budget 2021 means for landlords
• What is capital gains tax?
• What is landlord insurance?