Failing to obtain the correct Selective, Additional, or Mandatory HMO licence for a rental property can lead to serious financial and legal consequences for both landlords and letting agents.
Penalties for Not Having a Licence
If a property that requires a licence is rented out without one, the landlord or managing agent could face:
Fines of up to £30,000 per offence – Local councils can issue civil penalties for operating an unlicensed rental property.
Rent Repayment Orders (RROs) – Tenants (or the council if Housing Benefit/Universal Credit was paid) can reclaim up to 12 months' rent if the property was rented without a required licence.
Banning Orders – Serious or repeat offenders may be banned from renting out properties in the future.
Criminal Prosecution – In some cases, landlords and agents may face unlimited fines and a criminal record for operating an unlicensed property.
Restrictions on Serving Section 21 Eviction Notices – If a property requires a licence but does not have one, the landlord cannot issue a Section 21 notice to evict tenants legally.
Who is Liable?
Landlords – Always responsible for ensuring their rental property is licensed when required.
Letting & Managing Agents – If an agent manages the property, councils may hold them jointly responsible, particularly if they applied for the licence on behalf of a landlord.
What to Do If a Property Needs a Licence
Check with the local council or use Kamma’s licensing tools to confirm if a property requires a licence.
Apply for the correct licence as soon as possible to avoid penalties.
Ensure compliance with licence conditions, such as property safety standards and tenant management rules.
Failing to comply with property licensing laws can result in significant financial losses and legal issues.