Financial Penalties for HMOs


The holder of an HMO Licence has to maintain certain standards in their Property. Local Authorities are charged with monitoring and ensuring compliance with these standards.

As part of this, Local Authorities can issue financial penalties; the below sets out this process.


​The issuing of a fine will usually be triggered by a tenant making a complaint to the Local Authority who will then carry out an inspection. Alternatively the Local Authority may use their powers to carry out a random inspection.

PACE Interview

If the Local Authority believes you may have committed an offence they might invite you to be interviewed under caution. This will be a PACE interview because the interview must be carried out in accordance with the Police and Evidence Act 1984.

You will be invited if the Local Authority has reasonable grounds to suspect that you have committed an offence relating to a property which you let, manage or control. Offences include:

  • Failure to comply with an Improvement Notice (section 30 of the Housing Act 2004);
  • Offences in relation to licensing of Houses in Multiple Occupation (section 72 of the Housing Act 2004);
  • Offences in relation to licensing of houses under Part 3 of the Act (section 95 of the Housing Act 2004);
  • Offences of contravention of an overcrowding notice (section 139 of the Housing Act 2004);
  • Failure to comply with management regulations in respect of Houses in Multiple Occupation (section 234 of the Housing Act 2004); and
  • Breach of a banning order (section 21 of the Housing and Planning Act 2016).

PACE interviews are recorded and you will be cautioned that any evidence collected through the interview can be used as evidence against you. If you fail to mention something which you later rely on, a negative inference can be drawn from your failure to mention it during the interview. Most financial penalties are ultimately issued on the basis of the evidence gathered during the PACE interview so great care should be spent in preparing for this.

If you are invited to an interview you have the right to obtain prior legal advice, and to be accompanied during the interview by your solicitor. Your solicitor cannot answer questions on your behalf but can advise you during the interview and help clarify questions asked by the local authority.

Sometimes the Local Authority will agree to a written interview whereby you must respond in writing to set questions.

Notice of Intention to issue Financial Penalties

​If after the PACE interview the Local Authority believes that you have committed an offence they will issue a Notice of Intention to issue Financial Penalties.A Notice of Intent can be issued in respect of each person and each breach. This means that multiple Notices of Intent can be issued in relation to a Property e.g. if the Managing Agent and the Landlord are believed to have committed the same offence.

The Local Authority can amend or withdraw the Notice of Intent at any time.


​After the issuance of the Notice of Intent you will have 28 days to file written representations with the Local Authority.Is it important that you take this opportunity to file evidence explaining the context of any perceived offences and detail any remedial works undertaken if these have been requested.

Financial Penalty for Housing Offences – Final Notice

​After considering the representations the Local Authority may decide to issue a Final Notice explaining their decision to impose a financial penalty.After the Final Notice you are able to file further representations; however the Local Authority is not obliged to consider these.
If you disagree with the decision of the Local Authority you have 28 days to appeal the notice. The Final Notice is suspended until the appeal is determined or withdrawn. If you fail to file an appeal within this time you are deemed to have accepted the Final Notice.
The Local Authority can amend or withdraw the Final Notice at any time.


The First-tier Tribunal has the power to confirm, cancel, increase, or decrease the size of the financial penalty.

The grounds for appeal are not set out in the legislation. Recent case law indicates that the Tribunal will not challenge the Local Authority’s policy on the size of fines, but can reduce a penalty where it has been calculated wrongly or the Local Authority has misinterpreted the seriousness of the offence.

More information

Pinney Talfourd has regular experience advising landlords who find themselves facing financial penalties. We have experienced Property Litigation Solicitors who can offer expert advice at all stages of the process.

They are recommended by Legal 500 UK and are able to meet clients out of hours and across Essex and London. Contact the team here.

Content correct at time of writing. The above is meant to be only advice and is correct as of the time of posting. This article was written by Oliver-James Topping, Solicitor in the Property Litigation Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of April 2020.


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