Landlords forced to refund rents after HMO convictions

AFS Team·7 December 2012·3 min read
Landlords forced to refund rents after HMO convictions
Judges and tribunals are cracking down on wayward shared house landlords who fail to licence their properties with record fines. One landlord has just been ordered to pay £39,000 in rent back to six student tenants in what is believed to be the largest penalty handed down by a residential property tribunal. But another case overlooked by many may lead to even bigger pay outs for tenants. Parker v Waller & Ors [2012] UKUT 301 (LC) [Click link for full judgment in new window] is a binding ruling on lower tribunals, like the residential property tribunal, and details exactly how tribunals should penalise landlords. The case revolves around a letting agent running a shared house in multiple occupation (HMO) without a licence. The law says that if a landlord is convicted of this offence, the tenants can take the case to a residential payment tribunal and request the refund of any rent paid in the 12 months to the date of the conviction. The Upper Tribunal hearing Parker v Waller decided five points must be considered before awarding rent payments to tenants: • The landlord had committed an offence – generally proved by conviction in court • The refund dates fall within the licence application dates and the offence dates – for example the landlord should have applied for a HMO licence to cover the 12 months before the conviction, not just part of the time • The seriousness of the offence • The appropriate amount to award taking in to account the landlords financial means, any fines and costs imposed and the rent any tenants paid • Whether the tenant’s conduct should result in reducing the award In the Parker case, the Upper Tribunal confirmed the lower tribunal decision that the landlord should refund £15,423 to his tenants – even though the fine for the HMO offence was just £525 plus costs.