The rent repayment order (RRO) was set at 50% of the potential total of £19,760 that could have been imposed in this case by the First Tier Tribunal (FTT). The landlord also had to pay £300 in costs.

The landlord was the long leaseholder of the property and had been granted a selective licence, by Newham Council. The selective licence was obtained on the basis that the property would be occupied by no more than 5 people from the same household. At the FTT hearing, the landlord accepted that the property was located in an area designated by Newham Council as also being subject to additional licensing and that he neither had the correct type of licence nor had he made an application for the correct type of licence given that there were 3 tenants but they weren't of the same household.

However, the landlord argued that the application for the RRO was "time barred" because he had served a section 21 "no fault" eviction notice on 9th May 2021 and then on 12th May 2021 sent a "statutory notice" to the council under section 62(1) of the 2004 Housing Act. This tells a local authority that the person in control of or managing an HMO that is required to be licensed but is not licensed is taking "particular steps with a view to securing that the house no longer requires to be licensed".

The problem for him though was that the steps that he was required to take under section 62 must be lawful but under section 75 of the Act serving a section 21 notice on tenants of an unlicensed HMO is not lawful and there was no evidence that he had at any time even applied for an HMO licence (an action which could have made the section 21 lawful). Thus, the statutory notice to the council "could not constitute a proper section 62(1) notification".

The FTT then considered the seriousness of the offence and highlighted that in this case the offence of operating an unlicensed HMO stretched over 22 months and that this long period added to the seriousness of the offence.

The landlord did say that he had used professional managers and "relied upon their expertise" and that he was also a member of a landlord organisation. But that, along with other evidence he supplied, showed that the landlord "was a business landlord" and that he was, therefore, "expected to know better".

The FTT also discounted the landlord's argument - in relation to the requirement in RRO decisions to take account of the parties' financial circumstances - that he did not make any profit from this particular property and it cited case law that said the ".... approach of adding up the landlord's expenses and deducting them from the rent, with a view to ensuring he repay only his profit, is not appropriate and not in accordance with the law .... that will be seen by landlords as harsh but .... Parliament intended a harsh and fiercely deterrent regime of penalties for the HMO licensing offence".

With regard to the conduct of the parties, no fault was found with the conduct of the tenants throughout their tenancy but with regard to the landlord's conduct the FTT said "... mere compliance with a legal obligation by a landlord does not constitute good conduct - it is simply what is to be expected. It was the case that the landlord should have correctly licensed this property but did not. This is a significant factor in relation to the matter of conduct".

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