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Housing and Regeneration Act 2008

Penalty
Section 226 - Overview

658.This section describes the power to impose fines to penalise failures by registered providers.

Section 227 - Grounds for imposition

659.This section specifies the grounds on which the regulator may decide to require registered providers to pay fines. As well as being satisfied that one of the grounds specified in this section applies, the regulator must also be satisfied that a fine is the appropriate penalty for the identified problem.

660.Subsections (2) to (7) of this section specify the cases where the regulator may issue a fine. These cases are where:

  • the registered provider has failed to meet a standard established under sections 193 or 194

  • the affairs of the registered provider have been mismanaged

  • the registered provider has failed to comply with an enforcement notice

  • the registered provider has failed to comply with an undertaking that it has given to the regulator

  • the registered provider has failed to pay an annual fee under section 117(2),and

  • where offences under this Part of the Act have been committed by the registered provider.

661.Subsection (8) provides that where the regulator is satisfied that an offence has been committed in respect of a registered provider by an individual, the grounds for imposing a penalty are as in subsection (7), and the regulator may require the individual rather than the provider to pay the fine. This subsection also provides that, in such cases, references in this Part of the Act to a registered provider can be read as references to that person.

662.Subsection (9) requires that the regulator must be satisfied beyond reasonable doubt in respect of the grounds at subsection (7).

Section 228 - Imposition

663.This section provides that a penalty is imposed by a written notice being served on a registered provider. Subsection (2) requires the notice to specify which of the cases listed in subsections (2) to (7) of section 227 is the basis for the notice, the amount of the penalty that must be paid, how the penalty must be paid, the deadline for the payment of that fine, and any interest or additional penalty payable in the event of late payment.

664.Subsections (3) and (4) require that the penalty notice explain the effect of sections 234(1), (3) and (6) and section 235. These state that a penalty is treated as a debt to the regulator; that interest is treated as penalty; that, if an offence is punished with a penalty, it may not also be punished through prosecution; and that the provider can appeal to the High Court.

665.Subsection (5) provides for the Secretary of State to make further regulations about the period for payment of fines, the content of the penalty notice and the way in which a penalty notice may be served.

Section 229 - Amount

666.This section provides that the amount of the fine for Case 6 of section 227, where an offence has been committed by a registered provider, may not exceed the maximum amount that the court could impose in those cases. In all other cases the maximum amount of penalty that the regulator may impose is £5,000. The Secretary of State may amend this maximum penalty of £5,000 by affirmative resolution order.

Section 230 - Warning

667.This section sets out a warning procedure which must be followed before a penalty notice can be imposed. The regulator must give a registered provider a notice, called a “pre-penalty warning”, which must specify the grounds on which a penalty could be imposed, warn the provider that the regulator is considering imposing a penalty, include any indication the regulator can give of the likely amount, and explain the effect of sections 231, 234(1), (3) and (6) and 235.

668.Subsection (2) requires the regulator to give the HCA, and any other person that it thinks appropriate, a copy of the pre-penalty warning. In doing so, subsection (3)sets out that it should particularly take into account, when considering to whom it would be appropriate to send a copy, any person who has provided information as a result of which the regulator is considering making an award of compensation.

669.Subsection (5) requires the regulator to refer to section 125 (which permits registered providers to offer, and the regulator to prescribe a procedure for, the use of voluntary undertakings) and indicate in its pre-penalty warning whether the regulator would accept a voluntary undertaking under section 125 instead of or in mitigation of a penalty.

670.Subsection (6) provides that the regulator may combine the pre-penalty warning with warnings about the use of its other enforcement powers.

Section 231 - Representations

671.This section allows registered providers issued with a pre-penalty warning to make representations to the regulator.

672.Subsection (2) specifies that the minimum period for representations must be at least 28 days, beginning on the date on which the registered provider receives the pre-penalty warning.

673.The representations may pertain to any matter connected with the contents of the warning, but in particular with whether a penalty should be imposed, or the likely amount of any penalty.

674.Subsection (4) provides that at the end of the period for representations the regulator must consider any representations that have been made, and decide whether to impose a penalty.

Section 232 – Notifying HCA

675.This section requires that, if the regulator imposes a penalty, it must send a copy of the penalty notice to the HCA.

Section 233 - Destination

676.This section specifies what the regulator must do with money that it receives from fines it has imposed on registered providers. Subsection (2) provides for the regulator to deduct from that money the direct costs of administering the penalty procedure, and a share of its overall expenditure that is proportionate to the effort and resource required for administration of the penalty procedure. Subsection (3) provides that any balance remaining will be paid to the HCA to be used, at the HCA’s discretion, for investment in social housing.

Section 234 - Enforcement

677.This section specifies how fines will be enforced, and provides for late payment or non-payment of fines. Fines are treated as a debt to the regulator once a penalty notice is issued under section 228.

678.Subsection (2) gives the Treasury a power to make regulations permitting the regulator to charge interest on fines that are not paid by the date specified in the penalty notice and to impose additional fines where the original fine is not paid by the specified deadline. In such cases, subsection (3)provides that the additional sums are also treated as fines, and that these additional amounts may have the effect of increasing the penalty above the limit set by section 229.

679.Subsection (4) provides for how interest rates may be set for interest charges on late payment of penalties as provided for in subsection (2).

680.Subsection (5) gives a discretionary power to the regulator to offer an early payment discount if the provider pays the fine in advance of the date specified in the penalty notice.

681.Subsection (6) specifies that if the penalty notice is served on a person under section 227 Case (6), he or she may not be prosecuted for the offence which is the ground for requiring the payment of a fine.

Section 235 - Appeal

682.This section gives a provider who has been served with a penalty notice the right to appeal to the High Court against the regulator’s imposition of the penalty, or its amount, or both.

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