While there has been much focus on the so-called ‘tenant tax’, agents are warned that new legislation coming into force today has been largely overlooked despite its potential significance.

It gives local authorities in England tough new powers to crack down on rogue agents and landlords.

For the first time, local housing authorities will be able to impose a civil penalty of up to £30,000 for a range of housing offences, including:

• Failure to comply with a housing improvement or overcrowding notice;
• Failure to have the correct licence for a property that needs a mandatory HMO, additional or selective licence; and
• Failure to comply with the HMO management regulations.

When it comes to properties that do not have the correct licence or where management rules for Houses in Multiple Occupation (HMOs) are breached, both the landlord and letting agent can be held liable.

Before imposing penalties, local authorities must have regard to government guidance, issue a notice of intent and invite representations. There is also an appeals process.

The Government has also expanded the Rent Repayment Order (RRO) provisions that enable the local authority or tenant to claim back up to 12 months’ rent.

Previously, this power was only available in relation to licensable but unlicensed properties, and tenants could not lodge a claim unless the local authority had prosecuted the landlord.

From today onwards, RROs are available as a sanction for a wider range of offences including:

• Illegal eviction or harassment of occupiers;
• Using violence to secure entry; and
• Failure to comply with a housing improvement notice or prohibition order.

Tenants will now be able to submit a claim without the local authority having prosecuted the agent or landlord, and the local authorities have the power to assist them.

Unlike criminal prosecutions, any income received from civil penalties and RROs can be retained by the local authority and spent on certain housing enforcement activity.

Isobel Thomson, chief executive of NALS, said: “Whilst we support local authority action to crack down on rogue agents and landlords, it is vital that councils resist the temptation to issue financial penalties for very minor infringements purely to raise income and fill their budget black hole.

“If used wisely, these powers could mark an important step forward in driving rogue operators from the market and improving consumer protection.

“With councils able to retain revenue from targeted enforcement action, the business case for introducing new bureaucratic and costly licensing schemes is weaker than ever. It is time for councils to think again and adopt a smarter approach to regulation.”