The Real Cost of Non-Compliance for Landlords in England
- Houseshare Heroes
- 1 day ago
- 6 min read
Why a competent managing agent can save you tens of thousands in penalties
For many landlords, management fees can feel like a cost.
In reality, a good managing agent is often a form of financial protection.
The government’s statutory guidance published on 13 November 2025 makes clear that, from 1 May 2026, local authorities in England will be able to impose civil penalties of up to £7,000 for breaches and up to £40,000 for offences across a wider range of landlord failings, while offences committed before that date remain subject to the earlier framework and guidance, including the previous £30,000 maximum under the 2018 civil penalty regime.
That means the cost of getting things wrong as a landlord especially with HMOs can be severe. And because local authorities can issue multiple civil penalties in some cases, the total exposure can become eye-watering very quickly.
Old rules vs new rules: what changed?
For offences committed before 1 May 2026, councils still use the earlier civil penalty framework under the Housing Act 2004 and Housing and Planning Act 2016, with a maximum civil penalty of £30,000 per relevant offence.
For breaches and offences committed on or after 1 May 2026, the newer statutory guidance applies. Under that framework, the guidance distinguishes between:
breaches, where councils may impose a civil penalty of up to £7,000, and
offences, where councils may either prosecute or impose a civil penalty of up to £40,000.
The same guidance also says the increase from £30,000 to £40,000 for relevant Housing Act 2004 and Housing and Planning Act 2016 civil penalties comes into force on 1 May 2026.
The penalties landlords need to take seriously
Below is a practical summary of the government starting points in the 2025 statutory guidance. These are not always the final amounts, because councils can adjust them for aggravating or mitigating factors, but they show the scale of risk.
1) Unlawful eviction and harassment
The guidance gives a starting point of £35,000 for unlawful eviction and harassment under the Protection from Eviction Act 1977. This is one of the clearest examples of how expensive poor management decisions can become.
2) New assured tenancy breaches under the post-Renters’ Rights system
The guidance sets starting points of:
£4,000 for attempting to let a property for a fixed term
£6,000 for attempting to end a tenancy by notice to quit
£6,000 for attempting to end a tenancy orally
£6,000 for serving a possession notice outside the prescribed section 8 process
£6,000 for relying on a ground where the person does not reasonably believe possession can be obtained
£3,000 for failing to provide prior notice where required
£4,000 for failing to issue a written statement of terms within 28 days
£4,000 for failing to give existing tenants prescribed information about the Renters’ Rights Act changes.
For more serious offences, the government starting points are even higher:
£30,000 for relying on a possession ground knowing the landlord would not be able to obtain possession, or being reckless as to whether they would
£25,000 for reletting or remarketing a property inside the 12-month no-let period after using the moving or selling grounds.
3) Improvement notices and general housing enforcement
The starting point for failure to comply with an Improvement Notice is £25,000. Under both the older and newer frameworks, councils can treat this as a serious enforcement matter.
4) HMO licensing offences
For HMOs, the starting points in the guidance are:
£17,000 for a mandatory HMO being unlicensed
£17,000 for an additional HMO being unlicensed
£20,000 for knowingly permitting over-occupation of an HMO.
The guidance also confirms that civil penalties for unlicensed HMOs may be imposed on the person managing, the person having control, and any landlord, including a superior landlord, which is particularly important in rent-to-rent and layered management arrangements.
5) HMO management regulation breaches
This is where many landlords underestimate the risk. The guidance states that each failure to comply with an HMO management regulation can constitute a separate offence for which a civil penalty can be imposed. Under the 2018 guidance, that point was already clear; the 2025 guidance continues that approach.
The government’s starting points are:
£3,000 for failure to provide information to the occupier
£20,000 for failure to take safety measures
£10,000 for failure to maintain water supply and drainage
£12,000 for failure to supply and maintain gas and electricity or supply a gas safety certificate
£7,000 for failure to maintain common parts
£7,000 for failure to maintain living accommodation
£7,000 for failure to provide adequate waste disposal facilities.
6) Overcrowding and licensing of other rented property
The guidance also gives starting points of:
£12,000 for a property subject to selective licensing being unlicensed
£20,000 for failure to comply with an overcrowding notice.
7) Banning order breaches
A breach of a banning order has a starting point of £35,000. Under the earlier framework, breach of a banning order was already one of the offences for which civil penalties could be used instead of prosecution.
8) Rental discrimination and rental bidding
The 2025 guidance also adds starting points for newer private rented sector rules, including:
£6,000 for discrimination against applicants on benefits or with children
£3,000 for marketing a letting without stating the proposed rent
£4,000 for inviting, encouraging, or accepting rent above the advertised rate.
How the numbers stack up in the real world
This is the part landlords need to pay attention to.
The guidance expressly says that if a person commits more than one breach or offence, a local authority may impose a civil penalty for each of them. It also says local authorities can issue multiple penalties for different breaches and offences in respect of the same property.
So let’s take an example of a badly managed HMO using only the government’s own starting points:
Unlicensed mandatory HMO: £17,000
Knowingly permitting over-occupation: £20,000
Failure to take safety measures: £20,000
Failure to maintain water supply and drainage: £10,000
Failure to supply and maintain gas/electricity or gas safety certificate: £12,000
Failure to maintain common parts: £7,000
Failure to maintain living accommodation: £7,000
Failure to provide adequate waste disposal: £7,000
Failure to provide occupier information: £3,000
That gives an indicative total of £103,000 in civil penalties before even adding a failure to comply with an Improvement Notice. If an Improvement Notice is then ignored, the government starting point adds another £25,000, taking the indicative exposure to £128,000.
And that is before factoring in prosecution risk, legal costs, management time, voids, tribunal proceedings, or the wider commercial damage of enforcement action. The guidance also allows local authorities to increase penalties to ensure punishment, deterrence, and removal of any financial benefit obtained from the offending behaviour.
Why HMOs are where landlords are most exposed
HMOs are often where risk multiplies.
That is because HMO compliance is not one single rule. It is a web of licensing, safety, maintenance, occupancy, and management obligations. A landlord may think they have “just one issue,” but the guidance makes clear that several different failings can be treated as several different penalties.
In practice, that means one poorly run HMO can expose a landlord to:
licensing penalties
management regulation penalties
overcrowding penalties
improvement notice penalties
unlawful eviction or harassment penalties if possession is mishandled.
Why a competent managing agent matters
A competent managing agent is not there just to collect rent.
A proper agent should be protecting the landlord from enforcement by making sure that:
the property is correctly licensed
HMO standards are being met
safety measures are in place
gas, electric and compliance paperwork are up to date
occupiers are given the correct information
possession action is legally correct
notices and tenancy documents are served properly
issues are fixed before they become enforcement matters.
That is exactly why experienced management saves money. It reduces the chance of a landlord drifting into a penalty position through oversight, delay, poor systems, or misunderstanding of the law.
The key commercial point for landlords
When landlords look at management fees, they sometimes compare them only to the monthly cost.
But the real comparison is this:
Paying for good management may cost a few thousand pounds a year.
Getting compliance wrong on one HMO could expose a landlord to an indicative six-figure risk, based purely on the government’s published starting points.
That is why the right managing agent should be seen as a risk-control partner, not an overhead.
Final takeaway
The direction of travel from government is obvious: stronger enforcement, clearer sanctions, bigger penalties, and less tolerance for poor practice. From 1 May 2026, the newer Renters’ Rights civil penalty framework sits alongside the older enforcement regime, and landlords who do not understand the transition risk getting caught on the wrong side of both.
For landlords, especially HMO landlords, the lesson is simple:
A competent managing agent does not just help run the property. They help protect the landlord from serious civil and criminal exposure.
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