Enforcement Policy - Leasehold Reform (Ground Rent) Act 2022

Financial Penalties

The Act provides that the Council may impose financial penalties from a minimum of £500 up to a maximum of £30,000 for a relevant breach of section 3(1) of the Act, where the Council is satisfied beyond a reasonable doubt that a relevant breach has occurred.

Recovery Orders  

The Act also provides that the Council may order the landlord, or a person acting on their behalf, who received payment of the prohibited rent [1] in breach of section 3(1) of the Act to refund the leaseholder who paid it, where the Council is satisfied on the balance of probabilities that a relevant breach has occurred.

The Council cannot order a person to refund the prohibited rent if a leaseholder has made an application under section 13 of the Act to the First-Tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales (in either context we will refer to the relevant forum as "the Tribunal") in relation to the same payment.

Where any part of two or more payments of a prohibited rent made by a leaseholder under the same lease have not been refunded, the Council may make a single order in respect of all the prohibited rent that has not been refunded.

Process

The decision to issue, and the process of issuing, a financial penalty and/or a recovery order happens in multiple stages:

• An investigation into the alleged breach of the Act
• Determination of the severity of the breach
• A notice of intent to issue a financial penalty and/or a recovery order
• A period for written representations
• Review of those representations, if provided
• A final notice imposing the financial penalty and/or recovery order

The Council may serve a single notice of intent and a single final notice in respect of both a financial penalty and a recovery order[2].

Other types of enforcement action that may be taken

The Council will determine the most appropriate and effective sanction and whether to impose a financial penalty and/or a recovery order.  In suitable circumstances, consideration will be given to less formal action such as warning letters or advice to secure compliance, in accordance with the relevant enforcement policy of the Council.

[1] Section 10(2) Leasehold Reform (Ground Rent) Act 2022

[2] Schedule ss.2(2) and 5(3) Leasehold Reform (Ground Rent) Act 2022