Part 5: Housing, Estate Agents and Rentcharges: Other Changes Housing regulation in England Schedule 9: Financial penalty as alternative to prosecution under Housing Act 2004
This Schedule makes amendments to the Housing Act 2004 to provide that a financial penalty may be imposed by a local authority as an alternative to prosecution in relation to certain offences under that Act. These are:
where a person has failed to comply with an improvement notice that has become operative, such as that their conduct would amount to an offence under section 30 of the Housing Act 2004;
where a person has control of or manages an HMO which is required to be licensed under Part 2 of that Act but is not so licensed; where a person has control of or manages an HMO which is licensed under Part 2 of that Act and that person knowingly permits another person to occupy the house, with the result of the house being occupied by more households or persons than is authorised by the licence; and where a person is a licence holder or person on whom restrictions or obligations under a licence are imposed and that person fails to comply with any condition of the licence (offences under section 72 of that Act);
where a person has control of or manages a house which is required to be licensed under Part 3 of the Housing Act 2004 but is not so licensed; and where a person is a licence holder or a person on whom restrictions or obligations under a licence are imposed and that person fails to comply with any condition of the licence (offences under section 95 of the that Act);
where a person has contravened an overcrowding notice such that their conduct amounts to an offence under section 139(7) of the Housing Act 2004; and
where a person has failed to comply with management regulations in respect of a house in multiple occupation (an offence under section 234(3) of the Housing Act 2004).
	A local authority has discretion to decide whether to impose a financial penalty or to pursue a prosecution in individual cases. Regardless of the route which the local authority decides to take, the same criminal standard of proof of beyond reasonable doubt must be met in order to bring a successful prosecution or to impose a financial penalty. However, a local authority may not impose a financial penalty if the person has already been convicted of an offence in relation to the conduct or criminal proceedings for the offence have commenced and have not been concluded. If a local authority has imposed a financial penalty on a person, that person may not then be convicted of an offence for that same conduct.
	Where a financial penalty is imposed, only one such penalty may be imposed in respect of the same conduct. The amount of the financial penalty shall be determined by the local authority but must not exceed £30,000. The Secretary of State may make regulations providing how local authorities are to deal with financial penalties recovered and amending the amount of the maximum financial penalty to reflect changes in the value of money.
	New Schedule 13A to the Housing Act 2004 sets out the procedure to be followed when imposing a financial penalty as an alternative to prosecution. Before imposing a financial penalty on a person under new section 249A of the Housing Act 2004, the local authority must give that person notice of their intention to do so. The notice must be given within a period of 6 months, beginning with the first day on which the authority has evidence of the conduct to which the penalty relates. The notice must set out the amount of the financial penalty, the reasons for proposing to impose the penalty and information about the right to make representations.
	A person who is given a notice of intent may make representations to the local authority and must do so within 28 days beginning with the day after the day on which the notice was given. After the end of the period for representations, the local authority must decide whether or not to impose a financial penalty and if it decides to do so, it must decide the amount of the penalty.
	If the local authority decides to impose a penalty, it must give the person a final notice imposing the penalty. The final notice must require payment of the penalty within 28 days, beginning with the day after the notice was given and must set out certain information, including the amount of penalty, how to pay, the rights of appeal and consequences of failing to comply with the notice.
	A local authority may at any time withdraw a notice of intent or a final notice. The authority may also reduce the amount specified in a notice of intent or a final notice. The person must be notified in writing of any such withdrawal or reduction.
	A person to whom a final notice is given may appeal to the First-tier Tribunal against the decision to impose the penalty or the amount of the penalty. If a person makes an appeal, the final notice is suspended until the appeal is determined or withdrawn. Following an appeal, the First-tier Tribunal may confirm, vary or cancel the final notice. The final notice may not be varied so as to increase the financial penalty by more that the amount than the local authority could have imposed.
	If a person fails to pay all or part of the financial penalty, the local authority may recover the penalty or part of it on the order of the county court, as if it were payable under an order of that court.
	A local housing authority must have regard to any guidance issued by the Secretary of State about the exercise of its functions under Schedule 13A or section 249A of the Housing Act 2004.