Failing to comply with minimum efficiency standards - how we calculate fines

The offender's income and track record will be considered in each case. Therefore, the maximum level of penalty varies on the type of breach under the Regulations

Financial penalties (Regulation 40) for domestic private rental sector properties

Where we decide to impose a financial penalty, we have the discretion to decide on the amount of the penalty, up to maximum limits set by the Regulations. The maximum penalties are as follows:

We will use the following as a guide to determine the appropriate penalty. When determining the financial penalty, we will take a staged approach.

Stage 1

Three factors are considered:

1. culpability of the offender
2. potential for tenant harm
3. severity of the risk.  

Collectively these factors identify the seriousness of the offence. We then categorise the seriousness, which we use to determine the amount of penalty.

This stage also considers as part of culpability, the offender's history of legal compliance and any previous advice and guidance given or available to the offender.

Stage 2 - Penalty Review

We will check that the penalty is proportionate to the overall means of the offender and if there are multiple offences, we will take the totality principle into account.

We will first consider factors affecting culpability and harm to choose a starting point from the table below for the financial penalty under consideration.

Stage 1

Identify seriousness of the offence

Culpability of the offender

High - landlord has failed to comply with requests to comply with these regulations. Knowingly or recklessly providing incorrect information in relation to exemptions to these regulation

Low - first breach under these regulations, no previous history of non-compliance of with housing related regulatory requirements. Complex issues partially out of control of the landlord have led to non-compliance.

Potential for harm / risk

High - low EPC rating, for example G or close to G rating, vulnerable tenants occupying property and / or extended period since non-compliance.  

Low - EPC score close to minimum acceptable EPC rating (E), no vulnerable tenants and / or short period of non-compliance.

Financial penalties for breaches in relation to Domestic Private Rented Premises

The tables below show starting points for penalty for each type of breach:

a. Not meeting minimum standard for less than 3 months (maximum of £2,000)

Where the non-compliance is less 3 months, The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (regulation 40) sets the maximum financial penalty that can be applied.

b. Not meeting minimum standard for more than 3 months (maximum of £4,000)

[1] Where the non-compliance is more than 3 months The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (regulation 40) sets the maximum financial penalty that can be applied.

c. Providing False and Misleading information (maximum of £1,000)

d)  Failing to comply with a compliance notice (maximum of £2,000)

If two or more penalty notices apply, the statutory maximum per set of breaches at an individual property at a single point of time will be £5000. See The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

Publication Penalty

A Publication Penalty may also be imposed on its own, or in addition to a financial penalty under Regulation 38.

 This publication penalty is defined in Regulation 39, as being publication on the PRS Exemptions Register, information as follows:

1. Where not an individual - the landlord's name
2. Details of the breach for which a penalty notice has been issued
3. The address of the property to which the breach occurred
4. The amount of the penalty notice imposed.

This information must be published for a minimum period of 12 months and may be longer should we decide this.

Publication will not take effect until the expiry or any review period or determination of an appeal whichever is the case.

Further penalties

Failure to take the action required by a penalty notice may result in the issue of a further penalty notice.

Recovery of financial penalty

Unpaid financial penalties can be recovered from the landlord as a debt owed to the enforcement authority unless withdrawn or quashed.

Further consideration of aggravating and mitigating factors

We may consider it appropriate to adjust the penalty from that determined (in the above tables) either up or down if there are aggravating or mitigating factors. For example if the landlord has a previous history of non-compliance with housing related regulatory requirements.   

Factors may come to light as part of the investigation for the breaches. These adjustments will be made and included in the financial penalty. Details of these factors will be included in the penalty notice.

In addition, factors may be provided in representations from a landlord in his request to review after the penalty notice has been served.

We will regard to these factors and adjust the penalty to increase (up to the maximum of £5000) or to reduce the penalty as we feel appropriate.

Stage 2 - review of the penalty

We must check whether the level of penalty is proportionate to the overall means of the defendant. If necessary, we may amend the initial amount to ensure it fulfils the general principles outlined above. 

Reductions

We must consider any factors which indicate a reduction in the penalty and should consider the wider implications of the financial penalty on innocent third parties. For example the impact of the offender's ability to comply with the law or to make restitution to the victims/tenants.

Reduction for admission of guilt

We will consider a potential reduction in the penalty for an admission of guilt and / or with the co-operation with the investigation. The level of reduction will be decided upon the following factors:

• when the offender admits guilt - during the investigation or thereafter
• the circumstances in which they admitted guilt
• the degree of cooperation with the investigation

Totality Principle

We will, when issuing a financial penalty for more than one offence or where an offender has also been issued with another financial penalty, consider the total penalties are just and appropriate to the offending behaviour and adjust accordingly.

The overriding principle is that the overall penalty must be just and proportionate.

Where the landlord requests a review / we undertake a review

Where a notice is received requesting a review of the decision to serve a penalty notice or where we decide to review our decision, the processes under Regulation 42 must be followed.

• Any representations made by the landlord and all other circumstances of the case must be considered.
• If no longer satisfied that a breach was committed or if the landlord has taken all reasonable steps and exercised all due diligence or given all the circumstances issue of the penalty notice was not appropriate, the notice must be withdrawn.
• In such circumstances, a further notice must be served withdrawing the penalty notice.
• If the decision is upheld, a notice must also be served confirming the penalty notice and the effect of the provisions providing for an appeal.

Following a review, we may:

• waive the penalty
• allow additional time for payment of the penalty
• substitute a lower amount where a financial penalty is imposed
• modify the application of a publication penalty.

The landlord will be served a notice after the review with an explanation of any adjustment made. Details of how representations and appeals may be made are detailed in the information provided upon issue of penalty notices.