A new Bill that aims to reform the private rented sector will bring in harsh penalties for landlords who make common mistakes, a housing law expert has warned.
The Renters (Reform) Bill, which has had its second reading in Parliament, will end the use of Section 21 'no-fault' evictions and introduce new requirements for landlords to sign up to a national register.
Landlords will have to offer tenants the correct paperwork and notice forms and comply with more standards and regulations.
However, Des Taylor, a director of Landlord Licensing & Defence, said that the Bill will also criminalise many errors and oversights that landlords and agents make.
And the Bill will give local housing authorities (LHAs) the power to impose financial penalties of up to £30,000 for each offence.
'Expose landlords to the risk of hefty fines from LHAs'
Mr Taylor told Accommodation for Students: "Failure to do any of these things exactly, will expose landlords to the risk of hefty fines from LHAs, who will have a statutory duty to enforce them under the Bill when it is enacted."
He added that the Bill will also expand the scope of rent repayment orders (RROs), which allow tenants or LHAs to claim back up to 12 months of rent from landlords who have committed certain offences.
Mr Taylor explained: "This could be devastating for portfolio landlords who make a small mistake in registering or serving notice.
"They could face multiple RROs and fines, which could wipe out their income and assets.
"The consequences for their tenants' security of tenure would also be dire."
Lack of awareness and consultation on the Bill
Mr Taylor criticised the lack of awareness and consultation on the Bill, which he said has been overshadowed by the focus on ending so-called 'no fault' evictions.
He also warned that many landlords and agents are unaware of the new enforcement measures and their implications, and that there are no plans for a national advertising campaign or guidance to inform them.
He said: "The Bill will not only end the use of 'no-fault' evictions, but also introduce new requirements for landlords to register on a national register and with an ombudsman scheme, to provide meticulously correct paperwork and notice forms to tenants, and to comply with even more standards and regulations."
National authority to set the level of fines and RRO
Mr Taylor also called for a national authority to set the level of fines and RROs, rather than leaving it to the discretion of LHAs.
He said: "We have seen how many LHAs have abused their powers under the Housing and Planning Act 2016, which introduced civil penalties for rogue landlords.
"LHAs have instead targeted the low-hanging fruit of reasonable landlords, not rogues, and imposed exorbitant fines that are massively disproportionate to the offences, often without proper evidence or due process."
He added: "We fear that this will continue under the new Bill, unless there is a national framework to ensure consistency and fairness."
Landlords and agents to familiarise themselves with the Bill
Mr Taylor urged landlords and agents to familiarise themselves with the Bill and its requirements, and to seek professional advice if they are unsure or need help.
He said that Landlord Licensing & Defence offers advice and representation to landlords and agents who are facing enforcement action from LHAs.
Mr Taylor said: "The Renters (Reform) Bill might be a great idea in principle, but it has not been thought through in practice.
"It will create a lot of confusion and complexity for landlords and agents, who will have to navigate an enlarged minefield of new rules and regulations.
"It will also give LHAs a licence to print money from fines and RROs, which will ultimately harm both landlords and tenants as landlords exit and rents increase even more."
He adds: "We hope that the government will reconsider some of the proposals and listen to the concerns of the industry before it is too late."
'Debate about abolishing section 21 has overshadowed the Bill'
Simon Thompson, the managing director of Accommodation for Students, said: "Landlord Licensing & Defence are correct to say that the debate about abolishing section 21 has overshadowed the Bill.
"There will be lots of student landlords who will be horrified to hear about some of the other plans.
"We all need to read the Bill to reform the PRS and contact our MPs with an explanation of what is wrong with it - and what will happen if landlords sell up."
He added: "From what we have seen happen under selective licensing schemes, local councils won't be shy about imposing hefty fines for minor transgressions, so landlords need to be prepared."
