Rent Repayment Orders: The Real Cost of an Unlicensed HMO

Of all the penalties attached to unlicensed HMO operation, the Rent Repayment Order is the one that catches landlords most off guard — because unlike a council-imposed civil penalty, it can be brought by tenants directly, and it is aimed squarely at the money already collected.

What is a Rent Repayment Order?

Under the Housing and Planning Act 2016, a tenant (or, in some cases, a local authority) can apply to the First-tier Tribunal for a Rent Repayment Order against a landlord who has committed certain housing offences — operating an unlicensed HMO chief among them. If the Tribunal grants the order, the landlord must repay rent already received during the unlicensed period, paid directly back to the tenant or the authority that brought the claim.

It doesn't matter whether the tenant knew the property was unlicensed, or was happy living there. The offence is operating without a licence — the tenant's satisfaction with the property is irrelevant to whether an RRO can be granted.

The exposure has doubled

Since the Renters' Rights Act took effect on 1 May 2026, the amount recoverable under an RRO has doubled from 12 to 24 months of rent, and the window in which a claim can be brought has also extended from 12 to 24 months after the relevant period. For a shared HMO with several tenants, each entitled to bring their own claim, the cumulative exposure across a single unlicensed property can run well into six figures.

This sits on top of — not instead of — the separate civil penalty a council can impose, which itself has risen to up to £40,000 per offence under the same Act.

How to protect yourself

The only real protection against an RRO is not being unlicensed in the first place. If you're unsure whether your property currently requires a licence — mandatory, additional, or selective — or if a previous licence has lapsed, treat it as urgent rather than routine. Contact us today; we will confirm your exact position and, if a licence is needed, handle the full application from £300+VAT.