Landlord of unlicensed HMO ordered repay a years rental income

The landlord of an unlicensed house in multiple occupation (HMO) has been ordered to repay the full amount of universal credit she received from the local authority to meet the rent for people in need of emergency accommodation.

The property had five letting bedrooms on three floors. The tenants were people in need of emergency accommodation who had obtained the landlord's contact details from the local council's homelessness services.

Their rent was met by direct payments of universal credit from the council. The tenants shared bathroom facilities and a communal kitchen but did not form part of a single household.

In August 2018, the landlord was convicted of being in control of an unlicensed HMO contrary to the Housing Act 2004.

Following that conviction, the council successfully applied under the Housing and Planning Act 2016 for a rent repayment order to recover the universal credit received by the landlord in respect of the tenants' rent.

The order required her to repay the full amount she had received in the relevant 12-month period, there being no exceptional circumstances to justify a lesser payment.

The landlord appealed, submitting that as the tenants had been housed at the direction of the local council, she had been entitled to assume that any regulatory requirements were satisfied.

The Upper Tribunal (Lands Chamber) dismissed the appeal.

It held that the fact that a local housing authority might direct tenants to a particular establishment could not be taken as a waiver of the general law or as an encouragement to the proprietor to believe that enforcement action would not be taken if a regulatory offence were committed.

The responsibility for complying with the requirements to obtain a licence for an HMO fell squarely on the landlord in control of the HMO.

Please contact us if you would like more information about the issues raised in this article or any aspect of commercial property law.