Penalties
for failing to License under Part 2 OR Part 3
If the legal owner fails to Licence a property which requires a Mandatory Licence under Part 2 or Additional Licensing under Part 3 of the Housing Act 2004, he/she will be committing an offence which CITY & COUNTY OF SWANSEA WILL prosecute. The penalty is up to £20,000
Bajinder Bahi – known locally as Gilly – was fined more than £3,000 at Stratford Magistrates Court in June 2007 for failing to licence two flats in Warwick Street which were both occupied by students from Warwick University. In other recent cases landlords have been fined from £1000 up to £13,000 for not licensing an HMO.
In a more recent case in Bexley, a landlord was fine £110,000 (later on appeal dropped to £99,000, plus over £5,000 costs) for failing to licence an HMO a breaching more than 20 specific conditions.
Rent Repayment Order
If a landlord has been convicted of operating an HMO without a valid license the local housing authority may apply for a Rent Repayment Order to reclaim money paid to the landlord by means of housing benefit. Tenants including former tenants can also apply for a Rent Reyapment Order following the council being awarded an order for the same property. This would be to claim back money they have paid during this period
An example: a landlord in Leamington was ordered to repay his tenants more than £18,000 in what is believed to be the first case of its kind in Britain. The tenants claiming back rent while the property remained unlicensed between September 2006 and June 2007.
Whilst the property is unlicensed, the landlord will be unable to serve any legal Notice on a tenant for arrears of rent or eviction under Section 21 of the Housing Act 2004.
Section 98
Other consequences of operating unlicensed houses: restriction on terminating tenancies
(1)No section 21 notice may be given in relation to a shorthold tenancy of the whole or part of an unlicensed house so long as it remains such a house.
(2)In this section—
a “section 21 notice” means a notice under section 21(1)(b) or (4)(a) of the Housing Act 1988 (c. 50) (recovery of possession on termination of shorthold tenancy);
a “shorthold tenancy” means an assured shorthold tenancy within the meaning of Chapter 2 of Part 1 of that Act;
“unlicensed house” has the same meaning as in section 96 of this Act.
