Rent repayment orders are a relatively new phenomenon, they occur when a First Tier Tribunal finds in favour of a tenant because a landlord hasn’t fulfilled their obligations, these obligations can include the following:
- Not protecting the deposit
- Failure to have the correct license in place at the start of the tenancy
- Failure to repair after being served an improvement notice
- Ensuring the property is not overcrowded
- Ensuring any eviction is carried out lawfully
Landlords legal obligations
As landlords’ obligations increase, so therefore does the likelihood that a tenant will seek a rent repayment order. A rent repayment order poses a significant financial burden on the landlord as they will be required to pay the tenant back up to a year of rent. A case in Camden, which can be viewed in full here, meant that the landlord was out of pocket and had to repay each tenant £1,500 within 28 days meaning a total of £4,500 was due.
The landlord had failed to apply for an HMO license before the tenants took up residency, the property therefore didn’t have the correct license in place between August 2017 and December 2017.
No win no fee
There are now two companies advertising rent repayment order services to tenants on Google, and this is likely to increase as other methods for no-win no fee lawyers and companies offering PPI claims look for the next big money spinner and undoubtedly will be a no-win no fee service offered to cases that are likely to see a decision in favour of the tenants.
Who can apply for a rent repayment order?
Rent repayment orders can be initiated by tenants or local authorities. The total amount that can be awarded will not exceed the rent or in the case of local authorities the housing benefit or universal credit element.
What landlords need to do
Landlords need to ensure they are fulfilling all of their legal obligations with respect to the property or properties they own as we expect an increase in rent repayment orders as tenants become more aware of their rights.
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance