March 5th, 2018 by James Goudie KC

The Housing (Management Orders and Financial Penalties) (Amounts Recovered) (England) Regulations 2018, SI 2018/209, coming into force on 6 April 2018, set out how a local housing authority (“LHA”) must deal with any surplus monies recovered under management orders under Sections 110(5A) and 119(4B) of the Housing Act 2004 (“the 2004 Act”) and any financial penalties received under Section 23(8) of the Housing and Planning Act 2016 (“the 2016 Act”). The Legislative Context is that Section 26 of, and Schedule 3 to, the 2016 Act amend Chapter 1 of Part 4 of the 2004Act to enable interim or final management orders to be made to be made in respect of property let in breach of a banning order made under Section 16 of the 2016 Act. A banning order is an order that may be made by the First-Tier Tribunal where a landlord or property agent has been convicted of a banning order offence specified in Regulations under Section 14(3). The effect of a banning order is to ban a person from letting housing in England and/or engaging in English letting agent or property management work. Under a management order the LHA takes over the management of a property and receives any rent paid by its occupiers in place of the landlord. Under Sections 110 and 119 of the 2004 Act the LHA is entitled to retain monies to cover relevant expenditure related to the management of the property and any compensation payable to third parties. These Regulations make provision about how a LHA must deal with the amount of rent recovered under a management order made under Sections 107(2A) or 113(3A) or (6A) of the 2004 Act (management orders relating to property let in breach of a banning order) after relevant expenditure and any required compensation has been deducted (“the surplus”). The surplus may be retained by the LHA to fund its enforcement functions connected with the private rented sector. If the surplus is not used for that purpose the LHA must pay it into the Consolidated Fund.

Section 23 of the 2016 Act enables LHAs to impose civil penalties of up to £30,000 as an alternative to prosecution following a breach of a banning order. These Regulations provide that the LHA must deal with any monies received as civil penalties imposed for a breach of a banning order in the same way as they must deal with surplus monies received from management orders in respect of any property let in breach of a banning order.


Comments are closed.