Rent Repayment Orders: A Guide For Landlords
Rent Repayment Orders are tool councils are increasingly wielding to penalise landlords and letting agents in England break housing laws.
Data from the Mayor of London’s Rogue Landlord and Letting Agent Checker reveals a massive increase in rent repayment orders before property tribunals.
In July 2021, tribunals awarded rent refunds of £139,146 to tenants who complained about poor standards and unlicensed letting of their homes.
The figure was triple the June penalty total of £42,500, which doubled May’s £22,000.
Meanwhile, landlord John Christodolou could face more than 40 Rent Repayment Order claims worth around £500,000 after a judge awarded three of his tenants an £18,000 rent refund.
The First-Tier Property Tribunal heard Christodolou had failed to licence a house in multiple occupation (HMO) at a block of flats in Stoke Newington, East London.
The three renters belong to Somerford Grove Renters, a lobby group for tenants at Christodolou’s flats.
What is a Rent Repayment Order?
Rent Repayment Orders are not new. Introduced in 2004, the order is an extra penalty against landlords who had committed HMO licensing offences.
However, tenants could only go to a property tribunal for an order after a court convicted a landlord of renting out an unlicensed HMO or when a council acted to reclaim housing benefits.
This narrow scope limited the number of awards under the order.
However, the Housing and Planning Act 2016 changed the legal framework and made the order a more potent weapon for tenants.
Under a Rent Repayment Order, a tenant or local authority can claim up to 12 months of rent paid to a landlord guilty of several housing offences, including:
- Letting an unlicensed HMO and related offences
- Failing to comply with an improvement notice
- Failing to comply with a prohibition order
- Breaking a landlord banning order
- Using violence to enter a property
- Illegally evicting or harassing tenants
The key to understanding Rent Repayment Orders are that no conviction is necessary, providing the judge at the property tribunal is satisfied the landlord has committed the offence.
The First-Tier Tribunal hears applications for an order.
Rent Repayment Orders and letting agents
If a landlord instructs a letting agent to find tenants, collect rents and deal with repairs, the landlord is responsible for any housing offences relating to the property.
Where there is a superior landlord (generally the owner) who rents to a sub-landlord whose intention is to further sub-let, the Rent Repayment Order will be made against the occupying tenant’s immediate landlord (the sub-landlord in this example).
Rent Repayment Order deadlines
Two crucial points to prove apply to the order:
1. The tenant must have lived at the property when the landlord committed the offence.
2. Tenants must make the application for an order within 12 months of the date of the offence.
Rent Repayment Order FAQ
How much rent can a tribunal order a landlord to repay?
If the landlord is found to be guilty of an offence, the award follows the scale in Section 44 of the Housing and Planning Act 2016.
For offences lasting less than 12 months, the award matches the term of the offence. For example, if an HMO was unlicensed for nine months and the landlord was convicted of the offence in court, the maximum award is nine months’ rent.
Can housing authorities claim benefit refunds under a Rent Repayment Order?
Yes, a housing authority can take a landlord before a tribunal to repay up to 12 months of housing benefits.
What is the First-Tier Tribunal?
The proper name is the First-tier Tribunal (Property Chamber).
The tribunal handles many land and property disputes, including unlicensed house in multiple occupation (HMO) cases and rent repayment order applications.
A judge heads the tribunal.
What factors does a tribunal consider when making a Rent Repayment Order?
The judge has no leeway when making an order if a convicted landlord is taken before the tribunal.
If the landlord is not convicted of any offence, any order should be set high enough that the landlord does not profit from committing housing offences and as a deterrent to others.
Can councils fine a landlord and seek a Rent Repayment Order?
Yes. A council can impose a civil penalty of up to £30,000 for qualifying offences and take the case before the tribunal for a rent repayment order.
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Suppose a landlord or agent is convicted of a “banning order offence”. In that case, a local authority may apply to the First-tier Tribunal for a banning order against the landlord or agent who committed the offence.