Penalty Policy in relation to relevant Letting Agency Legislation

Stockton-on-Tees Borough Council has adopted the Penalty Policy on deciding financial penalties and the appropriateness of prosecution as an alternative to imposing financial penalties under the relevant letting agency legislation.

It applies in relation to any decision made by Stockton-on-Tees Borough Council in its capacity as an Enforcement Authority under Section 6 of the Tenant Fees Act 2019.

For clarity, "relevant letting agency legislation" means:

1. The Tenant Fees Act 2019, "the TFA 2019"
2. Chapter 3 of Part 3 of the Consumer Rights Act 2015 as it applies in relation to dwelling houses in England
3. An order under Section 83(1) or 84(1) of the Enterprise and Regulatory Reform Act 2013 
4. Regulations under Sections 133 to 135 of the Housing and Planning Act 2016 

The content of this Policy does not constitute legal advice, only a court of law can provide certainty.

The Tenant Fees Act 2019 provides that enforcement authorities may impose financial penalties of up to £30,000 depending on the breach, as follows:

a. in respect of a first breach of S.1 & S.2, or a breach of Schedule 2 of the T FA 2019, a financial penalty not exceeding £5,000

b. under S.12 of the T FA 2019, a second or subsequent breach of S.1 or S.2 within 5 years of the previous breach provides for a financial penalty not exceeding £30,000 and there is alternative power to prosecute in the Magistrates Court where an unlimited fine may be imposed

In respect of a failure of Letting Agents to publicise their fees as required by S.83(3) of the Consumer Rights Act 2015, a financial penalty not exceeding £5,000 applies.

In respect of a failure by any person engaged in Letting Agency or Property Management work who fails to hold membership of a Redress Scheme as required by Article 3 Redress Schemes for Let tings Agency Work and Property Management Work (requirement to belong to a Scheme for example) (England) Order 2014 (in respect of Let tings Agency work) or Article 5 (in respect of property management work), a financial penalty not exceeding £5,000 applies.  Note that it is not sufficient to simply register for redress - the correct category of membership must be obtained depending on the work carried out.

In respect of Client Money Protection Schemes for Property Agents (Requirements to Belong to a Scheme for example) Regulations 2019:

a. a failure by a property agent who holds client money to belong to an approved or designated Client Money Protection ("C MP") Scheme as required by Regulation 3, a financial penalty not exceeding £30,000 applies

A failure to display a certificate of membership; or publish a copy of that certificate on the relevant website (where one exists); or produce a copy of the certificate free of charge to 

a. any person reasonably requiring it as required; or notify any client in writing within 14 days of a change in the details of a underwriter to the C MP scheme or that the membership of the C MP scheme has been revoked, as required by Regulation 4, a financial penalty not exceeding £5,000 applies.

Stockton-on-Tees Borough Council will determine what is the most appropriate and effective sanction and whether it is appropriate to impose a financial penalty or prosecute having due regard to its Regulatory Services Enforcement Policy.

Other types of enforcement action that may be taken

In appropriate circumstances, consideration will be given to less formal action such as warning letters or advice, in an effort to secure compliance, and will be done so in accordance with the relevant SBC Regulatory Services Enforcement Policy.

The Government has published guidance for enforcement authorities in respect of the Tenant Fees Act 2019 - "Tenant Fees Act 2019: Statutory Guidance for Enforcement Authorities" and in respect of Client Money Protection requirements - "Mandatory Client Money Protection for Property Agents - Enforcement Guidance for Local Authorities".

This is statutory guidance to which enforcement authorities must have regard to when considering to impose a financial penalty. This statutory guidance recommends certain factors that an enforcement authority should take into account when deciding on the level of financial penalty to impose and further recommends that enforcement authorities develop and document their own Policy on determining the appropriate level of financial penalty in a particular case.

In accordance with the provisions of the TFA & CMP statutory guidance, SBC will consider the following factors when determining the level of penalty to impose for a breach of relevant letting agency legislation:

a. severity of the breach

b. punishment of the landlord or agent

c. aggravating and mitigating factors

d. fairness and proportionality

Each of these factors are explained in more detail in the statutory guidance which should be referred to for each penalty under consideration.  For ease, the same considerations will be applied in cases of redress membership and breaches of S.83 Consumer Rights Act 2015.

Although the Council has therefore a wide discretion in determining the appropriate level of financial penalty in any particular case, regard has been given to the statutory guidance when making this Policy.

Appendix 1 of this Policy contains the processes that the Council will use in order to determine the level of financial penalty under the TFA 2019 and other relevant letting agency legislation. All stages subsequent to the issue of a Notice of Intent are subject to statutory time limits and the suspension of the process should an appeal be made to the First Tier Tribunal.

• young adults and children
• persons vulnerable by virtue of age
• persons vulnerable by virtue of disability or sensory impairment
• people on a low income
• persons with a drug or alcohol addiction
• victims of domestic abuse
• children in care or otherwise vulnerable by virtue of age
• people with complex health conditions
• people exploited where English is not their first language
• victims of trafficking or sexual exploitation
• refugees
• asylum seekers people at risk of harassment or eviction
• people at risk of homelessness

Housing law or landlord and tenant related

Offences under:

• The Public Health Acts of 1936 and 1961
• The Building Act 1984
• The Environmental Protection Act 1990
• The Town and Country Planning Act 1990
• The Prevention of Damage by Pests Act 1949
• The Protection from Eviction Act 1977
• The Local Government (Miscellaneous Provisions) Acts of 1982 and 1976
• The Housing Grants, Construction and Regeneration Act 1996
• The Local Government and Housing Act 1989
• The Housing Act 2004
• The Consumer Protection from Unfair Trading Regulations 2008

Offences Involving Fraud

Offences in which the victim has been deprived of money, property or other benefit by misrepresentation/deception on the part of the offender including:

• theft
• burglary
• fraud
• benefit fraud (particularly where tenants are in receipt of Housing Benefit)
• conspiracy to defraud
• obtaining money or property by deception
• people trafficking
• being struck off as a company director

Offences Involving Violence

A conviction for the offence of:

• murder
• manslaughter
• arson
• malicious wounding or grievous bodily harm
• grievous bodily harm with intent
• actual bodily harm
• grievous bodily harm
• robbery
• criminal damage where the intent was to intimidate or was racially aggravated
• common assault
• common assault which is racially aggravated
• assault occasioning actual bodily harm
• possession of an offensive weapon
• possession of a firearm

Offences Involving Drugs

Consideration should be given to the nature of the offence and what bearing it could have on the Landlord or Agent's business activities. The nature, quantity, purity and class of drugs should be taken into account.  In addition, where an offence of possession with intent to supply is involved regard should be had to the role and importance of the subject in the supply chain.

Sexual Offences

An offence contained in Schedule 3 of the Sexual Offences Act 2003.

Unlawful discrimination

Unlawful discrimination can include findings of an Industrial Tribunal on unlawful employment practice such as discrimination under the Disability Discrimination Act. Consideration should be given to the nature of the unlawful discrimination and what bearing it could have on the management of a licensable property.

Other Offences

Modern slavery or human trafficking offences involving the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, abduction, fraud, deception, abuse of power or a position of vulnerability or the giving or receiving of payments or benefits to achieve the consent of a person having control of another person, for the purpose of exploitation.

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability.  Where exceptional circumstances apply Stockton-on-Tees borough Council may reduce the minimum penalties further but may not increase them above the maximum permitted level of £5,000.

Low culpability

Medium culpability

High culpability

Very high culpability

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply Stockton-on-Tees Borough Council may reduce the minimum penalties further but may not increase them above the maximum permitted level of £30,000.

Low culpability

Medium culpability

High culpability

Very high culpability

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply Stockton-on-Tees Borough Council may reduce the minimum penalties further but may not increase them above the maximum permitted level of £5,000.

Low culpability

Medium culpability

High culpability

Very high culpability

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply Stockton-on-Tees Borough Council may reduce the minimum penalties further but may not increase them above the maximum permitted level of £5,000.

Low culpability

Medium culpability

High culpability

Very high culpability

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply Stockton-on-Tees Borough Council may reduce the minimum penalties further but may not increase them above the maximum permitted level of £30,000.

Low culpability

Medium culpability

High culpability

Very high culpability

The tables gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply SBC may reduce the minimum penalties further but may not increase them above the maximum permitted level of £5,000.

Low culpability

Medium culpability

High culpability

Very high culpability