19 May 2022

Rent Repayment Orders

Today another Rent Repayment Order case settled for a landlord and saved from a publicly listed decision being made against his name.

The landlord is in the business of Rent to Rent.

The letting agent was making the licence application.

The superior landlord lives abroad and agreed to the agent holding the licence.

The agent did not make the application due to not being confident to complete the application as it believed the licence was only needed for 5 people, despite the property being in an established Additional HMO Licensing Area, where it is triggered by the third occupant.

The agent instead of making the application and waiting for a decision decided to communicate with the local authority back and forth by email, asking if a licence was needed and waited for the council to reply which it did truculently each time.

The council officer was not even confident in its answers and misunderstood rent to rent operations and was slow to answer and process things.

The rent to rent operator was of the belief the agent was doing the application and left them to do the job as agreed.

Of course the agreement between the landlord and the agent and the landlord and the rent to rent operator catered for none of this.

Being in control of a HMO which needs to be licensed means it needs to be licensed regardless of who makes the application.

The council’s job is to assess the application and decide on the most appropriate person or entity to hold the licence based on the application. This means that they may even decide that a different person should be the licence holder to that person who applied. The point is that the application must be duly made. All the while the property was not licensed for nearly 200 days and an offence was being committed whilst the application had not been made.

The application was eventually duly made some 15 months from the first occupation of the third occupant.The council did not impose fines on the parties, accepting (without admitting) that it had played some part in the delay.

Nevertheless, the tenants were informed of their right to a rent repayment order as the property (which was recently built and to a very high standard) was unlicensed and the law entitles them to a Rent Repayment Order as a deterrent for other landlords to not run unlicensed properties. It is not compensation for tenants as the Upper Tribunal has decided, it is a tax-free tenant windfall.

The tenants used Conditional Fee Arrangement Lawyers (no win-no fee) for their case so the highest amount possible was sought.If you are a landlord and you rent to more than one person in a property, check it, inspect it, look for HMO tell-tale signs and ensure if there is a licence needed for any reason, that you are licensed.

The council imposes Civil Penalties of up to £30,000 for unlicensed properties and the Rent Repayment Order is independent of that too. So Double Jeopardy exists for the one offence.

Properties in Selective Licensing and HMO Licensing areas both are subject to Civil Penalties and Rent Repayment Orders for not being licensed when they should be.

Be wise, check out if you need a licence and seek advice on getting one if you need one.

*** Go incognito on your browser, Go to your local council website, check if and where in the borough licences are needed and see if you need one. If you do need one and you are unlicensed, seek professional advice immediately before applying. Your offence stops being committed when you apply and the local authority has 6 months to take enforcement action against you from the date you apply if you were operating unlicensed. ***

This landlord and agent were lucky they were not fined. The landlord will see no profit this year and next year and his tenants will holiday 5 star whilst he stays at home this year.

Sad as it is, the truth is, that he broke the law and has paid the price.Go to work for money, not for fines and repayments.

Good landlords, be careful, you are targets in other areas of the law too.

You can find out more about Rent Repayment Orders and how they work here:https://landlordsdefence.co.uk/rent-repayment-order/

Always here to assist and help.This landlord has saved £1,000s he would never have saved on his own.

Des Taylor

Landlord Licensing & Defence

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