Tips on How to Avoid a Rent Repayment Order
A rent repayment order can wipe out a landlord’s annual gross rent. That’s why landlords must understand how to avoid them.
Our Landlord and Tenant Solicitors in London can advise you on rent repayment order applications and represent you in tribunal proceedings.
Rent repayment orders
Many landlords are unaware of what a rent repayment order is until a tenant makes a tribunal application.
A rent repayment order requires a landlord to repay their tenant’s rent. Alternatively, if the tenant receives housing benefit or universal credit, the landlord must repay the government.
A rent repayment order can be made if either:
- The landlord has been convicted of committing a relevant offence, or
- The tenant or the local housing authority can prove, beyond a reasonable doubt, that a relevant offence has been committed.
Many landlords struggle to understand that if they have not been convicted or fined, they can still be ordered to repay rent to their tenant. According to the law, a conviction is not required before the tribunal will make a rent repayment order. If the tribunal finds, beyond a reasonable doubt, that a relevant offence was committed, it can make a rent repayment order.
Relevant offences for a rent repayment order
Section 40(3) of the Housing and Planning Act 2016 details the offences that allow a rent tribunal to make an order. They are:
- Using or threatening violence for securing entry into premises contrary to Section 6 of the Criminal Law Act 1977.
- Failure to comply with prohibition orders contrary to Section 32 of the Housing Act 2004.
- Failure to comply with an improvement notice issued by a local authority contrary to Section 30 of the Housing Act 2004.
- Breach of a banning order contrary to Section 21 of the Housing and Planning Act 2016.
- Having control of, or managing, an unlicensed property where the property or the area requires it, contrary to Section 95 of the Housing Act 2004.
- Having control of, or managing, an unlicensed HMO property contrary to the Housing Act 2004.
- Illegal eviction or harassment contrary to Section 1 of the Protection from Eviction Act 1977.
Amount of rent repayable under a rent repayment order
A tenant can claim up to 12 months' rent back from their landlord or former landlord. This is the gross amount, excluding the costs of mortgage repayments, letting agents' fees, insurance, and household repairs, such as a new boiler.
The rules say that if a landlord has been convicted of one of the relevant offences, the tribunal must make the maximum 12-month rent repayment order.
Where the tribunal makes a finding, beyond a reasonable doubt, that a landlord is guilty of one of the relevant offences, the tribunal must consider these factors before making the rent repayment order:
- The conduct of the landlord and tenant.
- The severity of what led to the making of the rent repayment order.
- The landlord's financial circumstances.
- The landlord’s previous convictions.
Tips to avoid a rent repayment order
A rent repayment order can wipe out a year's rental payments. Landlords also face the hassle, time and expense of an application to the First-tier Tribunal (Property Chamber) by their tenant, former tenant or the relevant local authority.
Landlords can reduce their risk of receiving a claim for a rent repayment order by:
- Understanding your landlord legal obligations as a UK landlord.
- Ensuring you are aware of the licensing requirements for a house in multiple occupation. The classification of a property as an HMO varies between local authorities, so a property may require a license even though a similar property in a neighbouring borough does not. HMO Solicitors can advise you if you need a licence.
- Provide tenants with a tenancy agreement and an inventory of the property's items. You should photograph the property between tenants to provide evidence of its state of repair when the property is let out to new tenants. The tenancy agreement should include a provision for you to inspect the property periodically and to take photographs.
- Ensure that the tenant’s deposit is protected in accordance with the law.
- Tenants must receive prescribed information before the start of their tenancy agreement – if they don’t receive this, it may delay the eviction process.
- If the tenant contacts you about repairs or problems at the property, keep all contact (including texts, emails, and WhatsApp messages) and your responses. If you verbally agree to do something or if the tenant verbally indicates they are satisfied with the repair during a conversation, ensure you follow up with a written confirmation to confirm what was agreed upon.
- If a tenant does not pay their rent in full or if there are concerns about the tenant’s behaviour, do not assume that you are no longer under a legal obligation to keep the property in a habitable condition.
- Understand the law regarding when you can access your property and the notice you need to provide. Ensure that a record of this is kept, as otherwise the tenant may complain about landlord harassment.
- Ensure that you understand the law regarding revenge eviction and its consequences for you.
- If unsure of your legal position, speak to Landlord and Tenant Solicitors. They can advise you on tenancy agreements and inform you if there is a potential deposit dispute or a potential claim for disrepair.
Help if you are a landlord facing a rent repayment order application
At OTS Solicitors, our Landlord and Tenant Lawyers can advise you on how best to avoid a rent repayment order application by providing strategic and proactive legal advice.
If a rent repayment order application has already been made to the First-tier Tribunal (Property Chamber) by the tenant, former tenant or the relevant local authority, then our Rent Repayment Order Lawyers in London can help with advice on how best to settle the claim or, if you have a good case, to argue that no relevant offences were committed. We can also advise on your right as a landlord to appeal against a rent repayment order to the Upper Tribunal.
Appointments are available at our offices in central London, as well as by phone or online consultation.
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