A Rent Repayment Order (RRO) is a financial penalty that can be imposed upon a landlord who, without reasonable excuse, manages or lets a property which ought to be licensed under Part 2 or 3 of the Act and is not licensed.
An application to the Residential Property Tribunal for an order may only be made if the landlord has been convicted of the offence of operating a licensed property without a licence, or the local authority is satisfied the offence has been committed (even though the landlord has not been prosecuted for offence).
The Residential Property Tribunal may make an order if it is satisfied that the landlord has been convicted of the offence, or, that he has committed it.
A Local Housing Authority (LHA) may apply for an order where housing benefit has been paid to that landlord during any period when such an offence was being committed.
Occupiers (including former occupiers) are also permitted to make an application to the RPT for an RRO where an order has already been granted to an LHA in respect of the same property or where the landlord has been convicted of the offence.
A landlord has been forced to repay nearly £19,000 to his tenants for failing to license a house in multiple occupation (HMO) in what is believed to be the first rent repayment order in the UK.
The landlord was ordered to pay £18,540 to two groups of students who lived in his property in Leamington Spa from September 2006 to June 2007.
The Residential Property Tribunal awarded the equivalent of 50% of his rental income for his failure to apply for an HMO licence. The order followed the landlord's conviction for failing to licence his property as a HMO. He was prosecuted at Leamington Spa magistrates court and ordered to pay a total of £3,057, including costs.
Landlords need to be aware that while the fine imposed for failing to licence an HMO can be as much as £20,000, where there is mitigation, it can be considerably less.