Commentary on provisions of Act Schedule 3: Financial Penalties
This Schedule sets out the procedure to be followed by an enforcement authority where it imposes a financial penalty on a landlord or letting agent. The same procedure applies if the authority also requires the landlord or letting agent to repay any amount to a tenant (or other relevant person).
	Before imposing a financial penalty, the enforcement authority must give the landlord or letting agent notice of their intention to do so. This notice must be given within a period of 6 months, beginning with the first day on which the authority has evidence that the person has breached the prohibitions in Sections 1 or 2 or the requirements relating to holding deposits (Schedule 2) or, if the breach is a continuing breach, while the breach is continuing or within 6 months of the last day on which the breach occurred. The notice of intent must set out the date on which the notice of intent is served, the amount of the penalty, the reasons for imposing the penalty and information about the right to make representations.
	A person who is given a notice of intent has 28 days to make representations to the local authority (paragraph 3). After the end of the period for representations, the enforcement authority must decide whether or not to impose a financial penalty and if so, the amount of the penalty.
	If the enforcement authority decides to impose a penalty or require the landlord or letting agent to repay a prohibited payment, holding deposit or an amount paid under a prohibited contract, it must give the person a final notice. The final notice must require payment of the penalty within 28 days if the authority has imposed a financial penalty and if ordered to repay a prohibited payment, holding deposit or an amount paid under a prohibited contract the period specified in the notice which will be between 7 to14 days. The notice must set out certain information, including the date on which the final notice is served, the amount of the penalty, the reasons for imposing it, how and when to pay, the rights of appeal and consequences of failing to comply with the notice.
	Under paragraph 5, an enforcement 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 or amend a notice to remove a requirement to repay a prohibited payment or holding deposit. The person who has received the notice must be notified in writing of any such withdrawal, reduction or amendment.
	There is a right to appeal to the First-tier Tribunal against a final notice. An appeal must be brought within 28 days from the day after the final notice was served if appealing against a financial penalty. If appealing against an order to repay a prohibited payment, holding deposit or an amount paid under a prohibited contract, the landlord or letting agent must appeal within the period specified in the final notice as the period within which that payment, deposit or amount must be repaid. A landlord or letting agent may appeal against the decision to impose the penalty or the amount of the penalty. An appeal is to be a re-hearing of the enforcement authority's decision and may take into account additional evidence of which the enforcement authority was unaware.
	If a landlord or letting agent makes an appeal, the final notice or part of the final notice which is the subject of the appeal is suspended until the appeal is determined or withdrawn. On appeal, the First‐tier Tribunal may confirm, vary or quash the final notice. The maximum penalty that the First-tier Tribunal can impose is the same as the maximum amount that the enforcement authority could have imposed.
	If a landlord or letting agent fails to pay all or part of a financial penalty, the enforcement authority may recover the outstanding amount on the order of the county court, as if it were payable under an order of that court.
	Paragraph 8 provides that if the authority requires the landlord or letting agent to pay an amount to a relevant person and the landlord or letting agent fails pay all or part of that amount then the relevant person may recover the outstanding amount on the order of the county court, as if it were payable under an order of that court. The enforcement authority may help the relevant person to do this (paragraph 9).
	Where an enforcement authority in England imposes a financial penalty it may retain the proceeds of the penalty and use this money for the purposes of any of its enforcement functions in relation to the private rented sector. Any excess must be paid to the Secretary of State (paragraphs 10 to 12).