The government has issued stern guidance to landlords, signaling a dramatic shift in enforcement powers under the new Renters’ Rights Act (RRA). Landlords now face a two-tiered system of financial penalties, with fines reaching as high as £40,000 for serious or repeated breaches.

The message is clear: the era of lax enforcement is over, and administrative errors that were once minor issues could now result in significant financial penalties.

Council Powers Start This December (2025)

The enforcement regime is set to start before the main tenancy reforms. From December 2025, local authorities (councils) will be granted vast new investigatory powers, including the authority to:

• Demand Data from banks and third parties.

• Enter Private Rented Properties in certain circumstances without a warrant.

Critics have noted that the only guaranteed beneficiary of the RRA’s enforcement provisions will be local councils, as they gain the ability to levy substantial fines and retain the proceeds.

The £7,000 Paperwork Traps (From May 1, 2026)

Most landlords are at risk from the £7,000 fine levied for what are primarily administrative and procedural breaches. These penalties can be issued from May 1, 2026, when the new tenancy regime is expected to begin.

A £7,000 fine could be imposed for breaches including:

• Falsely Claiming a Fixed Term: Attempting to let the property on a fixed-term tenancy instead of a rolling (periodic) tenancy (e.g., by adding a contractual end date).

• Verbal Termination: Attempting to end a tenancy, or requiring a tenancy to be ended, verbally.

• Missing Written Notices: Failing to give the tenant a written statement of terms or the information sheet about changes made by the Act.

• Possession Notice Errors: Using an invalid possession notice (like a ‘notice to quit’) or failing to give a tenant the mandatory written warning when a specified possession ground (e.g., Ground 1B) might be used.

• Misusing Section 8: Using a possession ground in a Section 8 notice when you do not reasonably believe that a court order will be granted on that ground.

The £40,000 Hammer: Misuse of Possession Grounds

The highest penalty—a £40,000 fine (or prosecution)—is reserved for serious or repeated offenses, primarily those involving the misuse of the new mandatory possession grounds (Ground 1: Landlord Moving In, and Ground 1A: Landlord Selling).

A landlord could face a £40,000 penalty for:

• Breaching the 12-Month Restriction: Re-letting or re-marketing a property within the 12-month restricted period after successfully using Ground 1 or 1A to gain possession.

• Fraudulent Eviction: Knowingly using a ground for possession that you know the court would not grant, resulting in the tenant leaving within four months without a formal court order.

• Repeat Offences: Committing a breach or offense within five years of a previous penalty or conviction.

• Continued Non-Compliance: Continuing to commit a breach for more than 28 days after receiving a financial penalty for that breach.

Important: Exceptions to the 12-Month Restriction

The 12-month restriction on re-letting after using Ground 1 or 1A will not apply, or will end early, if:

• You or a close family member moves in and uses the property as an only or main home.

• The property is sold with a long lease (over 21 years) or via a rent-to-buy agreement.

• The court makes an order for possession on a ground other than Ground 1 or 1A.

Action Point

Local authorities must be satisfied beyond reasonable doubt that a breach has taken place. If a fine is to be issued, you will receive a notice detailing the proposed penalty and will have 28 days to make written representations before the local authority issues a final notice.

Landlords must immediately focus on ensuring perfect documentation and compliance to mitigate the massive new financial risks posed by the Act.