Rent Repayment Orders have become one of the most significant financial risks facing landlords who seriously breach housing law.
They are not ordinary compensation claims. A tenant does not necessarily have to prove that they suffered a financial loss equivalent to the amount being claimed. Instead, the tribunal can order a landlord to repay rent because a specified housing offence has been committed.
Following the Renters’ Rights reforms, the potential exposure has increased substantially. In appropriate cases, up to 24 months’ rent can now be at risk.
For landlords, that makes licensing, possession procedures and wider compliance increasingly important.
What is a Rent Repayment Order?
A Rent Repayment Order, usually shortened to RRO, is an order made by the First-tier Tribunal requiring a landlord to repay rent received during a period when a qualifying offence was being committed.
Where the tenant paid the rent themselves, the repayment can be made to the tenant.
Where rent was met through certain benefits or housing support, a local authority may be able to seek repayment of the relevant amount.
An RRO can therefore turn what appears to be a regulatory breach into a substantial direct financial liability.
Why has the risk increased?
Historically, the maximum repayment period was generally 12 months.
The Renters’ Rights reforms have strengthened the system and increased the maximum potential award to 24 months’ rent for relevant cases.
Consider a property let for £1,200 per month.
Twenty-four months’ rent represents:
£28,800.
For an HMO or higher-value rental property, the potential exposure can be considerably greater.
That is before considering legal costs, penalties, lost rent, licensing problems or other enforcement consequences.
Which offences can lead to an RRO?
Rent Repayment Orders are linked to specific housing offences rather than every breach of landlord legislation.
Depending on the circumstances, qualifying offences can include matters such as:
- operating a property that requires an HMO licence without the required licence;
- operating a property subject to selective licensing without the required licence;
- illegal eviction;
- harassment intended to force an occupier to leave;
- breaching a banning order; and
- certain other serious offences brought within the RRO framework.
The important point is that RROs tend to focus on serious regulatory or tenancy-management failures, not minor administrative errors.
Licensing remains one of the biggest risks
Licensing is particularly important because landlords can sometimes become non-compliant without appreciating that the rules have changed.
A property may require:
- mandatory HMO licensing;
- additional HMO licensing; or
- selective licensing.
Local authorities can introduce additional or selective licensing schemes covering particular property types or geographical areas.
A landlord who has owned a property for many years should therefore not assume that the licensing position remains unchanged.
This connects directly with an earlier Landlord Legal Update in this series: planning permission and HMO licensing are separate issues.
A property can satisfy one regime and still breach another.
“I didn’t know” may not solve the problem
A landlord who did not realise that a licence was required may still face an RRO application.
There can be circumstances where a landlord argues that they had a reasonable excuse, but landlords should not rely on ignorance as a compliance strategy.
Portfolio landlords should periodically check:
- whether each property is an HMO;
- whether mandatory licensing applies;
- whether the council operates additional licensing;
- whether selective licensing applies;
- when existing licences expire; and
- whether licence conditions are being followed.
A spreadsheet listing every property, licensing scheme and renewal date can be extremely valuable.
Illegal eviction creates a particularly serious exposure
We recently covered illegal eviction and harassment in this Landlord Legal Updates series.
That subject is directly relevant to Rent Repayment Orders.
Changing locks, removing belongings, cutting off essential services or deliberately pressuring a tenant to leave can create far greater consequences than simply getting possession wrong.
Depending on the circumstances, a landlord could face:
- criminal enforcement;
- civil proceedings;
- financial penalties;
- compensation; and
- a Rent Repayment Order.
This is why landlords should never attempt to replace the lawful possession process with self-help.
Does the landlord have to be convicted first?
Not necessarily.
A tenant can apply to the First-tier Tribunal for an RRO even where there has not already been a criminal prosecution and conviction.
The tribunal must, however, be satisfied to the required legal standard that the relevant offence was committed.
This is an important distinction.
A landlord should therefore not assume:
“The council has not prosecuted me, so there can be no Rent Repayment Order.”
The tribunal process can operate independently.
Evidence matters
An RRO case may involve evidence including:
- tenancy agreements;
- rent statements;
- bank records;
- licensing records;
- council correspondence;
- inspection reports;
- photographs;
- messages between landlord and tenant;
- possession notices; and
- evidence about how the property was managed.
This is another example of why the record-keeping themes running throughout our Landlord Legal Updates matter.
Good records do not excuse an offence, but they can help establish exactly what happened, when it happened and what steps the landlord took.
Is the maximum automatically awarded?
No.
The maximum figure does not mean every successful application results in 24 months’ rent being repaid.
The tribunal considers the particular case and the factors prescribed by the legislation.
The seriousness of the conduct, the landlord’s behaviour and the wider circumstances can all matter.
However, landlords should not take comfort from the fact that the maximum is discretionary.
Even an award significantly below the maximum can represent a major financial loss.
Agents do not remove the landlord’s risk
Using a letting or managing agent does not mean the property owner can ignore compliance.
Landlords should know:
- who is responsible for licensing;
- who checks licence renewal dates;
- who monitors local licensing changes;
- who deals with council correspondence; and
- what evidence confirms that the work has actually been completed.
If the management agreement says the agent will handle licensing, the landlord should still obtain confirmation that the appropriate licence exists.
This follows a principle we have returned to throughout this series:
delegating a task is not the same as eliminating responsibility.
Buying an existing rental property needs extra due diligence
Landlords purchasing an occupied property should not concentrate solely on the tenancy and rent.
Before completion, establish:
- whether the property requires a licence;
- whether an existing licence transfers;
- whether a fresh application will be necessary;
- whether licence conditions have been breached;
- whether the council has already taken enforcement action; and
- whether there are outstanding tenant complaints.
Inherited compliance problems can quickly become expensive.
Build an RRO risk check into portfolio reviews
Every landlord should periodically ask:
- Does every property that needs a licence have one?
- Are licence renewal dates diarised?
- Are all licence conditions being followed?
- Are possession procedures being handled lawfully?
- Are complaints and repair reports properly recorded?
- Are agents being monitored?
- Has the local authority introduced a new licensing scheme?
- Is there documentary evidence supporting compliance?
For landlords with several properties, this should form part of an annual portfolio compliance review.
Two years’ rent changes the calculation
Rent Repayment Orders demonstrate how landlord regulation is changing.
Compliance failures are increasingly capable of producing consequences that go far beyond a warning letter or modest fine.
A landlord receiving £1,000 per month may be looking at potential rent exposure measured in tens of thousands of pounds.
For larger properties, HMOs and higher-rent locations, the figures can be much greater.
The best protection is therefore not trying to defend an RRO after the event.
It is making sure the circumstances giving rise to one do not happen in the first place.
NetRent’s Landlord Legal Updates are building a practical, searchable knowledge resource covering the legal and regulatory issues landlords face across the UK — connecting individual rules so landlords can understand how licensing, possession, repairs, complaints, safety and enforcement interact.
NetRent also supports landlords with landlord insurance, mortgages and property sales.
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Important information
NetRent does not provide legal advice. The articles represent our understanding of rental property law and are for general information only.