Risks involved for private landlords who rely on letting agents!
Published by Robinson Allfree on 16th March 2020 -
Residential landlords who fail to meet their extensive legal obligations put themselves at risk of severe financial consequences and reliance on the advice of professional letting agents is no defence. In a case on point, an otherwise responsible private landlord who let a house in multiple occupation (HMO) without a licence was ordered to repay more than £20,000 in rent that had been unlawfully collected from his tenants.
The house consisted of nine rooms, including four bedrooms, on four floors and was let to five tenants. The property was an HMO, within the meaning of Section 254(2) of the Housing Act 2004, in that it was occupied by more than three tenants who did not form one household and who shared facilities. As there were five tenants and the property had more than three storeys, it also fell into the category of a large HMO, giving rise to a mandatory duty to obtain a local authority licence before it could be lawfully let.
Such a licence not having been in place for about a year whilst the tenants were in residence, they applied to the First-tier Tribunal (FTT) for a rent repayment order (RRO) under Section 41 of the Housing and Planning Act 2016 in respect of more than £30,000 in rent they had paid during that period.
In ruling on the matter, the FTT noted that the landlord’s failure to licence the HMO was an offence under Section 72(1) of the 2004 Act. His letting agents had admitted what the FTT found to be an inexcusable error in failing to advise him that such a licence was required, but the fact that they had apparently let him down did not amount to a defence.
The FTT acknowledged that the non-professional landlord’s personal conduct had been good. Having spent £18,000 on refurbishing the house’s bathroom whilst the tenants were in situ, he had shown himself willing to invest in the property. He was, however, ordered to repay to the tenants £21,069 of the rent he received from them during the relevant period. The FTT noted that a professional landlord would probably have been dealt with more hars