Houses in Multiple Occupation (‘HMO’) require licensing under Part 3 of the Housing Act 2004. Mandatory HMO licensing applies to any HMO let to 5 or more people from 2 or more households (families).

Some councils also require other HMOs to be licensed, and some councils require all private landlords to get a licence.

It is a criminal offence to manage or be in control of an HMO that requires licensing but is not licensed under s.72 of the Housing Act 2004.

However, a reasonable excuse for controlling or managing the unlicensed HMO is a defence.

The reasonable excuse defence is not easily made out, and it usually requires circumstances outside of the offending party’s control that 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 offending party’s name into the database of rogue landlords and property agents.

Not all the above sanctions will necessarily have an 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, a defence or mitigating factors may be relied on to reduce the offending party’s liability.

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 applies 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 in 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 has the discretion to extend this time where no other enactment provides a time restriction.

If you have an HMO licensing issue, contact our experts at 020 3903 2000 for assistance.

Source; Landlord Advice UK – one of the leading tenant eviction companies in the UK 

Author: Mr Sasha Charles

Date: 7th of October 2023

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