£5,600 Proposed Penalty: A Warning for Landlords Under the Renters' Rights Act
A recent case shows just how important it is for landlords to understand the changing rules before making changes to an existing tenancy.
A landlord recently approached Woodstock Legal Services for advice about gaining possession of his property. During the matter, it became apparent that he had also received a Notice of Intent from a local authority proposing a £5,600 financial penalty.
The circumstances are an important warning for landlords dealing with the Renters' Rights Act changes.
How a Short-Term Tenancy Agreement Led to a £5,600 Penalty
The landlord had been renting his property to a family for around two years. The tenancy had generally run without difficulty, with rent paid on time and an amicable relationship between both parties.
The landlord then decided to sell the property and put it on the market. A Section 21 notice was served in March 2026.
Before the tenants were due to leave, however, the landlord was told that a member of the family was undergoing cancer treatment. The property had not yet sold, so the landlord decided to give the family extra time to stay.
A separate short-term agreement was entered into for a further period. The landlord also agreed to take responsibility for council tax and household bills during that time.
The landlord believed the original tenancy had ended and that the new arrangement simply gave the tenants some additional time while he continued trying to sell. It was this new agreement that ultimately attracted the Council's attention.
Why Did the Council Issue a Civil Penalty to the Landlord?
The tenants contacted the Council for housing advice. The Council obtained a copy of the new agreement, which set out a fixed term running from 24 May to 24 July 2026.
Following its investigation, the Council concluded that the landlord had attempted to let the property for a fixed term, contrary to section 16E(1)(a) of the Housing Act 1988.
The landlord was served with a Notice of Intent to Impose a Financial Penalty, proposing a penalty of £5,600.
It is important to note that this was a Notice of Intent, not a final penalty notice. The landlord was given the opportunity to make representations before the Council reached its final decision.
How Are Landlord Civil Penalties Calculated?
The Council's enforcement policy set a starting penalty of £4,000 for the alleged breach. It then applied further adjustments based on the circumstances it identified, including the landlord's property and management experience and the vulnerability of the occupants. This resulted in a proposed penalty of £5,600.
For a landlord who believed he was simply giving his tenants extra time to remain in their home, the potential financial consequence was significant. The tenants have since moved out by choice, but the penalty remains pending.
Can Landlords Still Offer Fixed-Term Tenancies or Short Lets?
The lesson is not that landlords should avoid being flexible with their tenants. Rather, landlords should take advice before changing the contractual basis on which a tenant occupies a property.
The wording used in an agreement does not necessarily decide its legal status. Calling an agreement a "short let" does not automatically make it one. The substance of the arrangement and the statutory framework both need to be considered.
How the Renters’ Rights Act Is Changing Landlord Obligations
This case comes at a time of significant change in the private rented sector.
The Renters' Rights Act introduces a number of new obligations for landlords, such as the Register your Rental Property Scheme, along with new restrictions. Existing requirements under the Housing Act 1988 also continue to apply.
As the next phases of the regime come into force, landlords need to recognise when a proposed change to a tenancy requires advice. This case is a useful reminder that, in the current regulatory environment, a well-intentioned decision can still create an unintended legal problem.
Get Legal Advice Before Changing a Tenancy Agreement
At Woodstock Legal Services, we advise landlords on
possession proceedings,
tenancy arrangements and the changing legal requirements affecting the private rented sector. If you are thinking about changing an existing tenancy, contact us by completing the form below.
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