Court case

Record fine highlights importance of HMO licences and compliance

An “unscrupulous” landlord in Birmingham has been handed a record-high fine of more than £180,000 for breaching the rules related to four of her HMOs (houses in multiple occupation) after being found guilty of 35 offences.

The director of property business Vertu Capital, which is now in administration, has been ordered to pay a total of £182,314 in fines, costs and compensation to her tenants in what is the largest penalty handed out in Birmingham for related offences.

The case related to the defendant’s four properties in the Selly Oak and Edgbaston areas, which were all HMOs. The tenants had complained of the poor condition of the properties, and were eventually visited by the council’s private rented services team who found numerous violations.

The 35 offences the landlord was eventually convicted of included missing fire blankets, inadequate or missing fire doors, and smoke detectors hanging loose from the ceiling. Further to this, the landlord had failed to obtain the required HMO licences for the properties.

Sending a message to landlords

The costs the landlord was ordered to pay included an £85,000 fine, costs of £22,975, a victim surcharge of £170 and financial compensation to 11 tenants of £21,000. The landlord’s company, Vertu Capital, was convicted of 21 offences and ordered to pay £52,000 in fines as well as a victim surcharge of £170.

Robert James, director of housing at Birmingham City Council, said: “We are delighted with the result of this case.

“This is the largest fine that Birmingham has seen for these type of offences, and it sends out a strong message to all landlords that Birmingham City Council will use all its enforcement powers to ensure that tenants are protected from rogue landlords who neglect their responsibilities.”

The judge labelled the landlord “unscrupulous” as it emerged that she had been in the business for more than 10 years and her tenants were forced to put up with “unacceptable” living conditions.

HMO landlords must play by the rules

In a landmark case earlier this year involving a rogue HMO landlord in London, the council was given the right to use the Proceeds of Crime Act (POCA) against the landlord, which could mean they would be forced to pay back all of the profits they made through running their properties.

While all large HMO landlords must obtain a licence in order to operate, from October this year the rules will be changing, which will mean that almost all HMO properties housing five or more people will need a licence. Learn more about this here.

As the government increasingly cracks down on landlords flouting the law with their rental properties, a register has also been created which lists all landlords and agents who have been convicted of housing-related offences, so that local councils can more closely monitor their activity and ban them if necessary. Further to this, the government is working to make the complaints procedure in the private rented sector (PRS) easier by creating one single housing ombudsman to replace the current overcomplicated system.

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