Decisions Made

Purpose

Legislation came into force in 2016 enabling local authorities to issue civil penalties of up to £30,000 as an alternative to prosecution for a number of specified offences under the Housing Act 2004. The use of civil penalties has recently been extended to include a breach of one or more duties specified within Regulation 3 of the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (“the Electrical Safety Regulations”). This paper seeks approval to amend the existing civil penalties policy to reflect the new duties brought in under these Regulations.

Drivers for the proposed enactment

The Housing and Planning Act 2016 amended the Housing Act 2004 and introduced a range of measures to assist Local Authorities (“LAs”) to tackle rogue landlords and managing agents, including the use of civil penalties of up to £30,000. In November 2017 Cabinet approved the policy for Crawley Borough Council’s use of civil penalties.

The Electrical Safety Regulations, recently made under section 122 of the Housing and Planning Act 2016, impose both duties and powers on LAs. The powers include that LAs may impose a financial penalties on private landlords where they have breached a duty under Regulation 3 of the Electrical Safety Regulations.

In summary, Regulation 3 requires landlords to:

•        ensure that electrical safety standards are met during any period when their residential premises is occupied under a specified tenancy

•        ensure every electrical installation in the residential premises is inspected and tested at regular intervals of no more than 5 years by a qualified person

•        obtain a copy of the Electrical Installation Condition Report (EICR) and supply a copy of it to each existing tenant within 28 days and a copy of it to the LHA within 7 days of receiving a request

•        further investigate or remedy any work identified within the report within the timeframe specified

Regulation 11 states that where a LHA is satisfied beyond all reasonable doubt that a private landlord has breached a duty under Regulation 3, they may impose a financial penalty (or more than one in the event of continuing failure) in respect of that breach.

It should also be noted that the Electrical Safety Standards Regulations do not enable the Council to prosecute as an alternative to issuing a financial penalty in respect of a breach of those regulations.

Description of Issue to be resolved

The provisions of the Electrical Safety Regulations are now in effect. As there is already a policy in place (agreed by Cabinet in November 2017) regarding the use of civil penalties, Democratic Services approved the following approach.

This report requests that the Head of Strategic Housing, in consultation with the Cabinet Member for Housing, approve the amendment of the existing Civil Penalties Policy to reflect the new powers of the Council.  This is in accordance with generic delegation 7 of the Strategic Housing Sub-Delegation Scheme. If approved, this will be entered into the Strategic Housing Sub-Delegation Scheme and published as a Significant Operational Decision (SOD).

When making the decision, regard should be had to the following government guidance:

•        Rent repayment orders under the Housing and Planning Act 2016 dated April 2017;

•        Civil penalties under the Housing and Planning Act 2016 updated on 06/04/2018; and

•        Guide for local authorities: electrical safety standards in the private rented sector dated 1 April 2021. dated 4/2021.

Purpose

Legislation has come into force enabling local authorities to pursue financial penalties of up to £5,000 for a number of specified offences under the Minimum Energy Efficiency Standard Regulations 2015. This paper seeks approval for the mechanism used to agree the fines issued by the Council.

Drivers for the proposed enactment

If a property has been let or marketed for sale or let, in the past 10 years it is likely to legally be required to have an Energy performance Certificate (EPC).

The Minimum Energy Efficiency Standard Regulations 2015 set a minimum energy efficiency level for domestic privately rented properties let under an assured tenancy, regulated tenancy or domestic agricultural tenancy.

Since April 2020 landlords can no longer let or continue to let properties under those tenancies if they have an EPC rating of F or G. Landlords must either take appropriate steps to comply with the Regulations (and carry out energy efficiency improvements to bring the property up to EPC E or above) and/or register an exemption via the Government website.

There are a number of reasons why a landlord might register an exemption:

•       An ‘All relevant improvements made’ exemption can apply where improvements have been made up to the cost cap (of £3,500), or there are none that can be made.

•       The ‘High cost’ exemption can apply where no improvement can be made because the cost of installing even the cheapest recommended measure would exceed £3,500.

•       A ‘Wall insulation exemption’ can apply where the only relevant improvements for the property are wall insulation measures and the landlord has obtained written expert advice showing that those measures would negatively impact the fabric or structure of the property.

•       A ‘Third party consent’ exemption can apply where the relevant improvements require consent from a third party and that consent cannot be obtained.

•       A ‘Property devaluation’ exemption can apply where making energy efficiency improvements to the property would devalue it by 5% or more.

•       Landlords may apply for a temporary exemption if they have recently become a landlord under circumstances laid out in guidance.

If a local authority believes a landlord has failed to fulfil their obligations under the MEES Regulations, they can serve the landlord with a compliance notice. If a breach is confirmed (or an invalid exemption has been registered in respect of the property), the local authority can issue a financial penalty. The financial penalty can be served up to 18 months after the breach and/or the details of the breach published for at least 12 months.

The maximum penalty amounts apply per property and per breach of the Regulations. The maximum penalties are specified in the Regulations and are:

•       up to £2,000 and/or a publication penalty for renting out a non-compliant property for less than 3 months

•       up to £4,000 and/or a publication penalty for renting out a non-compliant property for 3 months or more

•       up to £1,000 and/or a publication penalty for providing false or misleading information on the PRS Exemptions Register

•       up to £2,000 and/or a publication penalty for failure to comply with a compliance notice

•       A publication penalty means publication on the PRS Exemptions Register of information of details relating to the penalty notice such as:

o The landlords’ name

o Details of the breach of the regulations of which the penalty notice has been issued

o The address of the property in relation to which the breach has occurred, and

o The amount of the financial penalty.

The maximum fine that can be issued per property is £5,000.

Description of Issue to be resolved

The provisions of the Minimum Energy Efficiency Standard Regulations 2015 are in effect. Due to the size and limit of the fines available there is little room for discretion and therefore less need for guidance.