Birmingham court hands down record-breaking buy-to-let penalty

A rogue landlord has been ordered to pay more than £180,000 in fines after tenants were left living in unsafe and unacceptable conditions at four properties.

Leila Amjadi, the head of Vertu Capital Ltd, was found guilty of 35 offences relating to fire safety violations and poor maintenance, and was handed a record-breaking fine by a Birmingham court.

The record-setting fine related to offences at four houses in Selly Oak and Edgbaston, all of which were ‘houses in multiple occupation’ (HMOs), which means that more than three tenants lived there without forming a single household.

Upon visiting these properties, council officers found that fire blankets were missing, fire doors were inadequate and that smoke detectors were hanging loose. Ms Amjadi also failed to obtain HMO licences for her properties. In all, the council found 31 breaches of the HMO regulations.

The total fines ordered against both Ms Amjadi and her company came to £182,315.

What are the rules for large HMOs?

An HMO is a property with at least three tenants forming more than one household, where tenants share common living facilities.

If you have a large HMO – meaning it’s more than three storeys high with at least five tenants sharing facilities – then special rules apply.

You need to apply for a licence from the local council, and this will be valid for up to five years.

For a licence to be granted the house must be suitable for the number of occupants and the manager. Either you or your agent must be a ‘fit and proper’ person, meaning one with no criminal record or prior breaches of landlord laws.

In addition, you need to provide an up-to-date gas safety certificate, install and maintain smoke alarms and provide safety certificates for appliances. Councils can also add other conditions, such as improving the standard of your facilities.

Changes to HMO rules from October 2018

As of 1 October 2018, the criteria for large HMOs is set to change. The requirement for the building to be three storeys will be removed, and purpose-built flats (where there are up to two flats in the block) will be included.

Councils may also be allowed to set minimum room sizes and limit the number of occupants in each room.

The government estimates that up to 177,000 additional HMOs will face mandatory licensing in England.

At this stage, the new regulations are still subject to Parliamentary approval.

Other regulations applying to landlords

Aside from the rules around HMOs, there are other rules that apply to landlords more generally. And failure to comply could result in a hefty fine.

Tenant safety

All landlords have an obligation to ensure their property is safe for tenants and visitors to the property.

This includes having a valid gas safety certificate that’s renewed once a year by a Gas Safe-registered engineer, fitted and fully operational fire safety measures, and maintenance of heating and water systems.

Right to Rent

As of 2016, landlords need to ensure their tenants have the right to live in the UK. When letting a property, you or your letting agent must conduct checks on all new tenants.

The maximum penalty for failing to check your tenants’ status is £3,000.

Licensing schemes

Over 70 councils around the UK have introduced additional licensing schemes, which will apply even if you don’t own a large HMO.

If your council has a scheme and you fail to get a licence, you could face hefty fines – so check the regulations in your area.

You can find out more in our story on licensing schemes UK-wide.

Energy efficiency

Since 1 April, any buy-to-let property with a new or renewed tenancy agreement has needed to have an Energy Performance Certifcate (EPC) rating of at least E.

Homes rated F or G cannot legally be let out, and landlords could be fined up to £5,000.

Deposit protection

If you ask for a deposit from your tenants, you need to submit it to one of the government’s deposit schemes – either the Deposit Protection Service, Mydeposits or the Tenancy Deposit Scheme.

Failure to do so could result in severe penalties, including prison in the most extreme cases.

If you own a buy-to-let, make sure you fully understand your obligations under the law.

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