Ruling on Rental Repayment Orders in an HMO

A recent ruling has been made on the scope of rental repayment when a landlord fails to obtain a licence for a a House of Mutiple Occupation.

The case is Williams v Parmar and others [2021] UKUT 244 (LC).

The owner of a house in multiple occupation (“HMO”) in England which contains five or more persons who form two or more households must obtain a licence from the local housing authority. Controlling or managing an unlicensed HMO is a criminal offence. Where the First-Tier Tribunal (Property Chamber) is satisfied beyond reasonable doubt that a landlord has committed an offence under s.72, it may require the landlord to repay some or all of the rent to the tenant, to a maximum of 12 months rent.

In this case the landlord had let a property to the respondent tenants without having obtained a licence. The tenants applied to the FTT for a rent repayment order and sought to recover all of the rent paid for the previous 12 months. The Tribunal made a rent repayment order for the full sums claimed.

The Upper Tribunal allowed an appeal. The FTT appeared to have started from a presumption that full repayment was the default position, which was not correct. There was no presumption as to what amount should be repaid; rather, the FTT had to consider what was appropriate in all of the circumstance and take into account all relevant circumstances. In the present case, the landlord had no relevant previous convictions, which was a point in her favour. However, she was a professional landlord who knew or should have known of the requirement to obtain a licence. Moreover, there were significant deficiencies in the condition of the property. The appropriate order was for a rent repayment order in the sum of 80% of the rent for all but one of the tenants, and 90% for the other.

Oliver Kew

Published on 03/12/2021