The licensing regime for houses in multiple occupation (HMOs) exists to protect the safety and welfare of tenants. Recently, four tenants of an unlicensed HMO obtained rent repayment orders totalling £23,177.
The tenants had rented a four-bedroom house between September 2022 and September 2023. The house was within an area that was subject to an additional licensing scheme requiring HMOs with three or more occupants living in two or more households to be licensed. However, the landlord did not apply for a licence until August 2023. The tenants applied to the First-tier Tribunal (FTT) for rent repayment orders on the basis that the landlord had committed the offence of controlling or managing an unlicensed HMO under Section 72(1) of the Housing Act 2004.
The FTT found that the landlord had committed the offence from the commencement of the tenancy until the date he applied for a licence. Rejecting his argument that he had a reasonable excuse because he had applied for a licence as soon as he became aware of the licensing requirement, the FTT did not accept that ignorance of the law provided a reasonable excuse. The FTT observed that the landlord’s agent had sent an email to the tenants before the start of the tenancy stating that the landlord had a licence. The FTT considered that it was appropriate to make rent repayment orders given that there had been a clear breach of the law.
Whilst there had been a failure to license the property, the FTT noted that the additional licensing scheme had only been in operation for a few months when the tenancy started: it was not a case of prolonged disregard of licensing requirements. Most of the legally required documents appeared to have been provided to the tenants.
On the other hand, the house had been in a poor condition when the tenants moved in. A working oven and microwave had not been provided, and there were problems with the heating that took some time to resolve. The agent did not seem to accept that the assertion that the property had a licence would have affected the tenants’ decision to rent it, and neither he nor the landlord took responsibility for the tenants’ problems. The FTT considered that rent repayment orders of 65 per cent of the maximum amount were appropriate.