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HMO – Letting Without a HMO Property License

Houses in Multiple Occupation (‘HMO’) require licensing under Part 3 of the Housing Act 2004. Mandatory HMO licensing applies to any HMO which is let to 5 or more people that are from 2 or more households (families). Some councils also require other HMO’s to be licensed. Some councils require all private landlords to get a licence.

It is a criminal offence to manage or be in control of a HMO which requires licensing but is not so licensed under s.72 of the Housing Act 2004. However, it is a defence if there is a reasonable excuse for having control of or managing the unlicensed HMO. The reasonable excuse defence is not easily made out and it requires, usually, circumstances outside of the control of the offending party which resulted in the offence being committed.

This type of criminal offence is a strict liability offence. This essentially means that the offender is not required to have the guilty mind to be guilty of the offence as is the case with many other criminal offences. In other words, the fact that the offending party did not know they needed a property license is no defence.

There are various consequences for committing an offence under s.72 of the Housing Act 2004. The consequences are:

  1. The offending party could face a civil penalty of up to £30,000.00.

  2. You could be prosecuted in which case there will be court fees to pay.

  3. The tenant who occupied the unlicensed HMO or local authority may apply to the First-tier Tribunal for a rent repayment order.

  4. The local authority may apply to the First-tier Tribunal for a banning order against the offending party.

  5. The local authority may enter the name of the offending party on the database of rogue landlords and property agents.

Not all the above sanctions will necessarily have effect in relation to the same offence, for example, a civil penalty is an alternative to prosecution and a tenant or local authority may not choose to apply to the First-tier Tribunal for a rent repayment order. You cannot be prosecuted and face a civil penalty in relation to the same offence.

For any of the sanctions referred to above, there is a defence or mitigating factors that may be relied on to reduce the liability of the offending party.

If an offending party receives a civil penalty and disagrees with the amount, an appeal can be made to the First-tier Tribunal. Likewise, if a local authority or tenant apply to the First-tier Tribunal for a rent repayment order, a defence or partial defence may be raised to reduce liability. There is also the option to apply to the First-tier Tribunal to challenge a banning order or the decision of a local authority to add a landlord or managing agent to the database of rogue landlords and agents.

Landlord Advice UK assisted a client in the First-tier Tribunal appealing a civil penalty of £20,000.00 issued by Oxford City Council, the appeal succeeded, and the penalty was reduced to £2,500.00 by the First-tier Tribunal.

There are generally time limits to apply to the First-tier Tribunal within, although the First-tier Tribunal have discretion to extend this time where no other enactment provides a time restriction.

If you have a HMO licensing issue, you can contact our experts on 020 3903 2000 for assistance.

#HousingAct2004 #HMOLicensing #Banningorderoffence #databaseofroguelandlordsandpropertyagents #HMO


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