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What is a rent repayment order?

Rent Repayment Orders (RRO) is usually imposed on a landlord when the local authorities licensing legislation has been breached. Rent repayment orders are how a tenant or local authority can ask a landlord to pay back up to 12 months of Rent, Housing Benefit, or Universal Credit.

If the landlord is an individual or a company, the Rent repayment orders apply to both.

The standard of proof for rent repayment order is high. The Firs-tier Tribunal needs to be satisfied beyond reasonable doubt the person has committed the offence. The standard used for this offence is the same as under the criminal standard of proof.

However, rent repayment orders (RRO) are not only limited to unlicensed property offences. They are also applicable to the following list of breaches:

As of April 2017, the complete list of offences for which a Tenant may claim an RRO is:

Violence for securing entry to the let premises
Illegal Eviction or harassment of tenants
Failure to follow improvement notice
Failure to comply with prohibition order etc
Control or management of unlicensed HMO
Control or management of unlicensed house
Breach of banning order

Amongst other offences, an RRO is a financial penalty that can be imposed upon a person; Where a landlord, without reasonable excuse, manages or lets an unlicensed property that ought to be licensed under the Housing Act 2016.

Rent repayment order (RRO) matters are dealt with by the First-Tier Tribunal. A landlord can appeal the Rent repayment orders, and many have successfully defended RRO’s.

Although the grounds for defence may be limited, in respect of rent repayment, the award of the financial penalty can often be appealed provided grounds to do so exist.

If the offence is for unlicensed property and the local authority is taking action against the landlord. The local authority is required to ensure the basis for legal action is sound.

Any award made by the First-Tier tribunal should be based on the financial circumstances of the defendant and other factors.

Landlords need to ensure they comply with the requirement of the housing legislation and the terms of the tenancy agreement. The premises let to the occupier should be in good repair to ensure the tenant has no basis for a claim under the RRO.

Even if the rent is paid by Universal Credit, an RRO can still be made.

Who can apply for a rent repayment order?

A local authority or the tenant can apply to the First-tier Tribunal for a rent repayment order. The amount of the RRO cannot exceed the amount of rent paid by the tenant.

Legal costs for Rent repayment orders

The Costs in the First-tier Tribunal and the Upper Tribunal are generally granted at the discretion of the relevant Tribunal.

The Tribunal does not usually award legal costs unless the claim is groundless or an applicant behaves unreasonably, and the Tribunal determines it is appropriate to make a costs order.

Tenants applying for a rent repayment order

A tenant can apply for an RRO to recover rent they have paid to the landlord/agent if the offence:

relates to housing that they were occupying under a letting agreement at the time of the offence, and
was committed in 12 months, completing with the day on which the application is made.

Tenants can apply to recover any period of rent during their tenancy, up to the maximum of 12 months. However, they must apply in 12 months from the date of the offence.

A tenant in this regard is either a tenant or licensee of the landlord. Tenancies or licences for a term of more than 21 years are included.

Local authorities are allowed to help an occupier to apply for an RRO. They can conduct proceedings on the tenant’s behalf or provide information on how they can do it.

Student tenant successfully claims back £35,000

Megan Cole, a student, has won a year’s rent back after living in a house of disrepair.

Megan and seven of her house friends moved into a student-let property in July 2019.

The property had various disrepair issue’s these varied from an ant infestation, damp and mould, poor Wi-Fi, a dodgy boiler, leaky showers and poor Wi-Fi.”

However, the landlord assured the tenants that these issues would be sorted in due course.

One of Megan’s housemates checked their premises on the HMO register and found it was unlicensed. A license is required by law. The license ensures HMO’s have certificates for gas safety, energy-efficient ratings. Checks to ensure the communal spaces are big enough.

After they contacted the council and informed them of their landlord’s rogue. The council assessed the property and found it was unlicensable due to its poor condition.

The 8-bedroom house was considered only suitable for five tenants. The level of mould and dampness was inadequate for the property to be habitable.

The council informed the tenants that their landlord was a known rogue landlord. Letting other premises in Birmingham.

The council officers also informed the tenants, they could seek a Rent Repayment Order that would allow them to take their landlord to court.

They were informed they could claim the rent back because it is an offence to let an unlicensed property.

While living in the accommodation with disrepairs. Megan and her housemates put up with a broken boiler, court bailiffs turning up, and other problems too.

During the summer of 2020, they took their landlord to the Tribunal.

The landlord denied all accountability and said he had complied with the legislation and rejected he had committed any offence.

The landlord represented himself at the Tribunal presented no substantive defence or evidence.

The tenants compiled 15 pages of evidence to show the landlord had breached the tenancy agreement.

A month after, they found out that they had won the sum of their entire year’s tenancy back. This totalled £35,000 between 8 of them.

However, the (RRO) rent repayment order is legally enforceable. However, they must pursue the money through the small claims court.

Megan said: “We feel stuck in our situation, unsure of how to obtain the money we are entitled to. We are wary of forking out more money”.

Miss Sasha Gain from Landlord Advice UK said: “Our data shows rent repayment order claims are on the increase. We believe this is due to the awareness of this legislation which is resulting in an increase in claims for RRO.

Mr Sajjad Ahmad the CEO of the British Landlords Association said: “The only landlords who need to worry about this legislation are rogue landlords, those who have no regard for the law or their tenant’s health and safety”.

Members of the British Landlords Association (The BLA) who require legal advice can ring our free helpline. Alternatively, you can email us. The contact details are on our contact us page.

FAQ

What are the common defences?

In the case of an HMO, section 72 HA 2004 has several defences for rent repayment order claims.

The potential defences that can be used are:

An exemption to apply for a license existed and was still effective at the time of the alleged offence.

An application for a license has been made duly and was still effective during the period of the alleged offence.

The landlord had a valid reason for not applying for a license.

The landlord had a valid excuse for permitted the tenant to occupy the house (HMO only).

What amounts to a reasonable excuse is not defined under the HA 2004.

If any of these defences do not apply, the Tribunal will consider the amount of rent to be repaid. One of the leading companies that deal with Rent repayment orders for landlords is Landlord Advice UK

Statistics

A major mitigating factor for landlords: The Upper Tribunal upheld the 75% reduction in the RRO amount based on the tenants conduct where they were in persistent rent arrears and obstructed property inspections.
Rent repayment orders may not always work when the landlord is a Rent-2-Rent company. They will likely dissolve the company before paying any court debt, then start up again under another company name.
The landmark case largely sets aside Parker v Waller (2012) and assumes that RRO awards should be 100% of rent paid, adjusted only by s44(4)
According to these authorities, the Tribunal proceeded on the basis that (i) there is no presumption that there will be a 100% refund of rent payments made (landlordadvice.co.uk)

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Author: Amanda Goldsmith [email protected]

Date: 1st of January 2024

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Disclaimer:

This post is for general use only and is not intended to offer legal, tax, or investment advice; it may be out of date, incorrect, or maybe a guest post. You are required to seek legal advice from a solicitor before acting on anything written hereinabove.

British Landlords Association