Landlord fines and the cost of renting an unfit or non-compliant property

If you rent out a property, you have a legal obligation to ensure that it is safe and fit for habitation. This means not only making necessary repairs but also complying with regulations regarding gas and electrical safety, fire prevention, energy efficiency, and more. 

If a problem arises, the financial consequences can be significant. Depending on its nature, you may face a fine from your local authority, legal action, a claim from your tenant, or an order to repay rent. As of 2026, certain housing violations in England are now subject to civil penalties of up to £40,000, with fines in Scotland, Wales, and Northern Ireland determined by their relevant devolved administration.

Your landlord insurance can protect your property against insured risks, but it will not cover fines or penalties resulting from a breach of the law. In fact, most landlord insurance policies will require you to remain compliant with your legal obligations towards your tenants; failure to do so risks invalidating your policy.

In this article, we look at the risks of renting an unfit or non-compliant property, as well as the fines and penalties you risk if things go wrong. 

Please note that this article is relevant to the private rental sector in England. Rules differ in Scotland, Wales and Northern Ireland.

This content was factually correct when written but may not reflect current developments or information.

Changes to landlord penalties in 2026

Under the Renters’ Rights Act, as of 1st May 2026, English local authorities have additional powers to take action against landlords who don’t comply with regulations.

The new system distinguishes between breaches and more serious offences. For example, failing to provide a tenant with the required Written Statement of Terms (detailing key rental conditions prior to a tenant committing to a tenancy, a requirement from 1st May 2026) is a breach and could result in a civil fine of up to £7,000. The breach itself can’t be prosecuted in criminal court, although certain persistent or repeated breaches can become criminal offences.

For more serious offences, local authorities have two options. For example, if you rent out a House in Multiple Occupation (HMO) without a licence, or you fail to comply with an improvement notice, they can either take you to court or issue a Civil Penalty Notice (CPN). A CPN can now be as much as £40,000, up from the previous cap of £30,000.

Crucially, non-compliance doesn’t just expose you to financial penalties. It can also prevent you from regaining possession of your property until you resolve the breach.

The new rules also affect how you can regain possession of a property. Since the abolition of Section 21 (“no-fault”) evictions, landlords must now rely on a valid ground for a Section 8 eviction notice. Importantly, if you rely on a ground that you do not reasonably believe applies, this may result in a civil fine of up to £7,000. 

The consequences can be more serious if you use a ground you know wouldn’t result in possession being ordered if you went to court, or are reckless about whether it would, and your tenant leaves as a result within four months without a possession order being made. In that case, you could be prosecuted or receive a civil penalty of up to £40,000.

What can landlords be fined for? The most common offences

If you’re a landlord, it’s useful to know some of the most common offences that you can be fined for. Below, we cover five of the most frequent breaches.

Failing to meet health and safety standards (Awaab's Law)

Councils use the Housing Health and Safety Rating System (HHSRS) to assess whether conditions in your property could harm your tenants. Hazards include damp and mould, excessive cold, fire risks, unsafe electrics, and structural problems.

The most serious problems are classed as Category 1 hazards. Since 22 June 2026, councils have been able to impose a penalty of up to £7,000 where a Category 1 hazard exists, and it would have been reasonably practicable for you to prevent or remove it.

Awaab’s Law currently applies to social housing (housing associations and residential property by the council) only. However, the Government has confirmed it will extend it to the private rented sector, although no date has yet been announced.

When this happens, you will have legally binding timescales for dealing with serious hazards. If a tenant reports damp and mould in one of your rental properties, for example, you will need to investigate the cause and take appropriate action within the required timeframe. Ignoring complaints or simply blaming the tenant’s lifestyle could leave you facing enforcement action and a compensation claim.

Gas, electric, and fire safety breaches

You must arrange an annual gas safety check for any gas appliances and flues you provide and give your tenant a copy of the Gas Safety Record before they move in, or within 28 days for an existing tenant.

In England, you must normally have your electrical installation inspected at least every five years. You must obtain an Electrical Installation Condition Report (EICR), give the required copies to your tenants and council when requested, and complete any remedial work identified within the required timescale. Specified breaches can now result in penalties of up to £40,000.

You must also provide working smoke alarms on every storey used as living accommodation and carbon monoxide alarms in rooms containing a fixed combustion appliance, apart from a gas cooker. Failure to comply with a remedial notice can result in a fine of up to £5,000.

Letting an energy-inefficient property (EPC rules)

Privately rented homes in England and Wales that are covered by the Minimum Energy Efficiency Standards (MEES) must comply with EPC rules by having an EPC rating of E or above before you can legally let them, unless a valid exemption applies.

If you let an F- or G-rated property in breach of the MEES, you can be fined up to £5,000 per property.

The standard is also set to become tougher. Currently, the Government plans to require privately rented homes to meet a higher energy efficiency standard, broadly equivalent to EPC C under the new assessment system, from 1st October 2030.

Unlicensed HMOs and Selective Licensing

If five or more people from at least two households share facilities such as a kitchen or bathroom, your property will normally require a mandatory HMO licence.

Your council may also run an additional HMO licensing scheme or a selective licensing scheme covering other privately rented homes in a particular area.

If you let a property without a licence when one is required, you can now receive a CPN of up to £40,000, instead of being prosecuted.

Your tenants may also be able to recover rent from you through a Rent Repayment Order (RRO) if the property should have been licensed but wasn’t. For offences committed on or after 1st May 2026, an RRO can cover up to two years’ rent.

Banned tenant fees

Under the Tenant Fees Act 2019, you can only require tenants in England to make certain permitted payments. These include:

Rent

A refundable tenancy deposit

A refundable holding deposit

Certain payments for changes requested by the tenant

Certain payments if a tenant ends the tenancy early

Permitted default payments

Payments towards utilities, communication services, and council tax

You cannot charge separately for things like referencing, administration, inventories, check-ins, insurance, or professional cleaning.

If you take a prohibited payment, you can be fined up to £5,000 for a first breach. A further breach within five years of a previous financial penalty or conviction can result in prosecution or a civil penalty of up to £30,000. If you are prosecuted, the fine is unlimited.

Rent Repayment Orders (RROs) and Banning Orders

Councils are not the only ones who can take action if you break housing law. Your tenants can apply to the First-tier Tribunal for a Rent Repayment Order (RRO).

For offences committed on or after 1st May 2026, you can be ordered to repay up to 24 months’ rent. Previously, the maximum was 12 months.

An RRO can be made for offences including:

Illegally evicting or harassing a tenant

Letting an HMO without the required licence

Letting another property without a licence, where Selective Licensing applies

Failing to comply with an improvement notice or prohibition order

Breaching a banning order

For serious or repeat offences, a council can also apply for a Banning Order. This can prevent you from letting property or carrying out letting agency or property management work in England for at least 12 months. If a banning order is made against you, your details must also be recorded on the Database of Rogue Landlords and Property Agents. Certain other convictions for banning-order offences, or two or more civil penalties within 12 months can also result in an entry on the database.

Failing to declare rental income

If you receive rental income, you may need to declare it to HMRC and pay Income Tax on your profits. Our guide explains how much tax you need to pay on rental income.

Do not assume HMRC will not know about income you don’t declare on your tax return. It receives information from accommodation platforms and can obtain data from letting agents and other third parties to determine undeclared income.

If you fail to declare rental income, you will have to pay the outstanding tax plus interest. You may also face a penalty. Penalties can reach 100% of the tax owed where the failure is deliberate and concealed. The amount you pay will depend on the circumstances and whether you told HMRC before it contacts you.

If you have rental income from previous years that you have not declared, HMRC’s Let Property Campaign gives you a way to put matters right.

With penalties increasing and enforcement options expanding, it is worth checking that every property you let complies with the rules that apply to it. Keep your licences, safety inspections, and EPCs up to date, respond promptly when tenants report problems, and keep records showing what you have done.

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Landlord fines and the cost of renting an unfit or non-compliant property

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In this article

Changes to landlord penalties in 2026

What can landlords be fined for? The most common offences