Prepare for New Rent Repayment Order Rules

A leading property lawyer warns that it's time to prepare your property business for predatory tenants who will try to profit from a new rent repayment order regime.

When the Renters' Rights Bill becomes law in the summer of 2025, no-win, no-fee lawyers are expected to sue landlords.

Although subject to change, the Bill allows councils to help renters claim huge compensation payouts from rent repayment orders (RRO).

Currently, a council can help tenants claim a rent repayment order against a landlord convicted of a qualifying offence. These include letting unlicensed property, using or threatening violence or an eviction, failing to comply with improvement or prohibition notices, and breaking a banning order.

If the offence occurred less than a year ago, a First-Tier Property Tribunal can order the landlord to repay up to 12 months' rent.

Double trouble

The Renters' Rights BIll adds more offences to the list and doubles the time to claim compensation and the amount to pay to 24 months. The new offences include falsely using a possession ground to regain a home and a breach of restriction on letting or marketing a property. For example, landlords serving an eviction notice alleging they will move in or sell the property but re-let it within a few months.

The Bill also allows claims against superior landlords and company directors for the first time.

The BIll promises maximum payouts for repeat offences.

Lawyer Tamanna Begum, of specialist property lawyer Anthony Gold, says: "The government has sought to introduce these broader measures to cover discrepancies that have come about since the existing regime was introduced under the Housing and Planning Act 2016.

Vulnerable landlords

"While the changes provide tenants with greater security and choice of whom to bring a claim against, claim back for a longer period and concerning a wider range of offences, it does mean that many landlords will be left vulnerable and exposed to RRO claims even if they were not liable for the offence.

"There is also an added risk of bringing claims even if a tenant suffered no immediate or actual harm. The new changes are quite problematic for landlords, and it is likely that there will be a few teething issues in the early days. It is yet to be seen how the new rules will be implemented in RRO cases and how liability of landlords will be dealt with fairly and justly by a tribunal, particularly, where there are multiple respondents or company directors involved."

The Bill allows applicants to bring a claim against company directors in their capacities if the company committed an offence with the director's "consent or connivance" or the offence was "attributable to any neglect on the part of such a person." That means that even if a company was wound up, a company director could be personally liable to pay the RRO instead.