Who is Pursued For a Rent Repayment Order?

If you are a landlord of an HMO you want to make sure that you are licensed by the local authority. If you aren’t, you are very possibly committing an offence and may be liable to repay some of your tenant’s rent. Below is a recent interesting case however.

Some background law:

• 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.
• A person in control of or managing an unlicensed property commits an offence, subject to a defence of ‘reasonable excuse’.
• The Housing and Planning Act 2016 makes provision for “rent repayment orders”, being an order whereby the landlord must repay some of the tenant’s rent for failing to have obtained an HMO licence.
• Where a body corporate commits an offence, which offence was committed with the consent or connivance of, or is otherwise attributable to any neglect on the part of, a director, the director also commits the same offence.

A most recent case where tenants tried to get a rent repayment order was Kaszowska v White.

Mr White was the director of a company which had been managing an unlicenced HMO. That company entered voluntary liquidation. The tenants sought a rent repayment order against him, rather than his company. They contended that he had committed the same offence as his company so that a rent repayment order could be made.

The First Tier Tribunal dismissed the application; Mr White was not the “landlord” and so could not be the subject of an order. The Upper Tribunal dismissed an appeal from the tenants.

A rent repayment order could only be made against the immediate landlord of the tenant and not against any third party.

To structure your rental portfolio in the right way and ensure you are not open to any claims from tenants, or at risk of breaking housing laws, please speak to Oliver Kew at Hewetts Solicitors on 0118 957 5337.

Oliver specialises in Landlord and Tenant law and helps landlords and tenants throughout the Thames Valley, including Reading.

Published on 31/01/2022