Since 2004 the courts have been able to order a landlord to repay rent received in relation to a ‘House in Multiple Occupation’ (or “HMO”) where that HMO should have been licensed but was not. More recently these “Rent Repayment Orders” have applied in a wider range of circumstances. These are where a landlord has:

• Failed to comply with an “Improvement Notice” in relation to hazards at a property;

• Failed to comply with a “Prohibition Order” preventing/restricting the use of a property;

• Breached a “Banning Order” preventing them from letting a property;

• Used violence to secure entry into a property; or

• Undertaken an “illegal” eviction, or harassment of a tenant.

In respect of some of those offences, a Rent Repayment Order can be sought in conjunction with a financial penalty or criminal conviction.

Applying for a Rent Repayment Order

Any application for a Rent Repayment Order must be made to the First Tier Tribunal. Any application must be made within 12 months of the offence complained of being committed.

The Tribunal can order repayment of up to 12 months’ rent. However, rent can only be claimed for periods during which the offence was committed, which may have the effect of reducing the amount to be repaid. For instance, if a tenancy commenced on 1 January, and the landlord was issued with an improvement notice which he failed to comply with by 1 September, if a claim was made at the end of the tenancy after 31 December, the tenant could only seek repayment for the period 1 September to 31 December.

Where the landlord has been convicted of an offence to which the application relates, the Tribunal is obliged to order the maximum amount of rent possible - in other words,12 months’ rent, or the full rent for the period during which the commence was committed, whichever is the lesser of those two amounts.

Where the landlord has not been convicted of such an offence, then depending on the exact nature of the offence it may be for the Tribunal to decide how much rent should be repaid.

When considering that question the Tribunal must consider:

• the conduct of the landlord and the tenant;

• the financial circumstances of the landlord; and

• whether the landlord has been convicted of an offence in relation to these rules at some other time.

Given that an application for a Rent Repayment Order can be sought by the Local Authority as well as by a tenant, it is vital that landlords ensure they fully understand their legal obligations. There has been a considerable increase in “red tape” for residential landlords over the past ten years or so, and the penalties for and consequences of a mistake or misunderstanding, even an accidental one, can be disastrous.

For further help or advice, please do not hesitate to contact Daniel Edwards, an Associate in our Dispute Resolution team, on 01904 561424 or daniel.edwards@luptonfawcett.law or Jeremy Scott, Partner and Head of Regulatory and Corporate Defence on 07971 520407 or Jeremy.scott@luptonfawcett.law