What is the purpose of RROs?
Rent Repayment Orders for Houses in Multiple Occupation were first introduced by the Housing Act 2004. The overarching purpose of this legislation was to tackle issues relating to rogue landlords renting out poorly maintained and often unsafe property to multiple households to profit from cramming as many people into the property as possible.
What is a HMO?
Generally, amongst other requirements, a HMO is a building or part of a building that consists of one or more units of living accommodation occupied by two or more households that share or do not have one or more basic amenities. These include a bathroom, toilet or cooking facilities.
In addition to other, more technical requirements, a single household is defined as a single person or a family. A family includes a couple (whether or not married, and including same sex couples) and persons related to one another including half-brothers or sisters.
What is a Rent Repayment Order for Houses in Multiple Occupation?
The First-tier property tribunal is able to make a rent repayment order, requiring a landlord to repay an amount of rent paid by a tenant, up to 12 months, where it is satisfied beyond reasonable doubt that the landlord has committed the specified offence of controlling or managing an unlicensed HMO. The tenant can only apply for an RRO if the offence was committed in the period of 12 months ending with the day in which the application is made and the offence relates to housing that, at the time of the offence, was let to them.
What Factors Influence the Tribunals Decision for the amount to be repaid?
The maximum amount of rent that is ordered by the tribunal is rarely the full amount paid in the 12 month period. First, any rent paid by the tenant that was strictly for their own benefit such as utilities is deducted. Then the remaining rent paid in the 12 month period is assessed by the tribunal based on the seriousness of the offence and three additional factors.
The tribunals have ruled that a full rent repayment order should be reserved for the most serious kind of offences, such as a landlord’s failure to perform serious repair obligations or remedy any fire hazards. However, it is not uncommon for tenants to be awarded up to 80 – 90% of the rent claimed.
Further, in determining the amount of an RRO, the tribunal will take into account three additional factors:-
- The conduct of the landlord and tenant;
- The financial circumstances of the landlord; and
- Whether the landlord has been previously convicted of a relevant offence.
The Conduct of Landlord and Tenant
Although each case will depend on their individual facts, some of the things that the tribunal has taken into account in previous cases include the following:-
| Landlord | Tenant |
| Is the landlord a professional landlord? | Is the tenant in substantial rent arrears? |
| Has the landlord complied with their repair covenants under the lease? | Has the tenant persistently delayed paying rent? |
| Did the landlord place the tenant’s deposit in a Tenancy Deposit Scheme? | Is the tenant in breach of any leasehold covenants? |
| Does the landlord hold all the relevant gas and fire safety certificates? |
Closing Thoughts
Although, it is rare that the tribunal orders a 100% repayment of rent, awards of 80 – 90% are fairly common even in cases where the landlord has no previous convictions, is not a professional landlord, and the lack of a HMO license did not result in any harm to the tenants.
While the heavy repercussions certainly act as an effective deterrent in tackling the issues of overcrowded and poorly maintained properties, are the good landlords that act in good faith and remain on top of their repairing obligations, being punished too heavily as a result?
Perhaps, these are questions that future cases will answer.