Renters (Reform) Bill – sanctions for misuse of eviction ‘grounds’ 

At our webinar on 30 January we discussed the main changes which the Renters (Reform) Bill will make to possession claims for private landlords, how rent increases will work for residential tenancies if the changes become law, and the criminal law and enforcement powers contained within the proposals. 

I am particularly interested in the proposals for financial penalties and criminal sanctions which the bill contains and this is something I covered in my presentation. 

The government’s explanatory notes on the Bill provide this example of how wrongdoing by a landlord, and the consequences they might face: 

Misuse of the moving in ground  

A landlord evicted a tenant using the moving in ground, claiming they were planning to move in their brother. The tenant moved out as a result. The landlord’s brother had never intended to move in, and the property was advertised again immediately – an offence under section 16G(1) – at a higher rent. 

In this example the landlord has served a notice relying on a ground for possession they were not entitled to use, and they have also re-let the property during the ‘restricted period’ after notice was given. (There is a restricted period in this example because the landlord has relied on the ‘moving in’ ground for possession.) 

In the webinar I discussed the different penalties which the landlord could face. Local authorities will be able to impose penalties of up to £5,000 for first breaches. Where a notice was wrongfully served and the landlord knew or was reckless as to whether they were entitled to give that notice, the local authority will have a choice between criminal prosecution or a financial penalty of up to £30,000. 

Invalid notices given by agents 

One difficulty for letting agents will be that they will rely on information given by their landlord clients to serve notices. It is easy to imagine that a landlord could lie to their agent about planning to move in to the property. The agent would, unwittingly, serve a notice which the landlord is not entitled to rely on. 

Agents will need to consider how to avoid being ‘reckless’ when it comes to serving notices on behalf of their clients – of they will be at risk of committing the criminal offence under clause 16J of the bill. 

Another problem for agents is that the lower level of financial penalty (up to £5,000) can be imposed without the local authority providing any guilty ‘state of mind’ on the part of the agent. The penalties under clause 16H appear, on the face of it, to be ‘strict liability’ with no defence of reasonable excuse available. It will be very important for agents to have good systems in place to prevent invalid notices being served on tenants.