Letting a property that needs a licence without one is a criminal offence. Most landlords know there is a fine. Fewer know that the fine is only the first of four separate consequences, that they stack, and that the largest of them is usually not the fine.
1. The offence itself
Two sections, depending on which licence you needed:
- Section 72 — having control of or managing an HMO that is required to be licensed under Part 2 and is not.
- Section 95 — the equivalent for a house required to be licensed under Part 3, which is selective licensing.
Both are summary offences. On conviction the court can impose an unlimited fine: the previous level 5 cap of £5,000 was removed for offences committed on or after 12 March 2015 by section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
Both sections provide a defence of reasonable excuse, and a duly made licence application is treated distinctly from no application at all.
2. The civil penalty — up to £30,000
Section 249A of the Housing Act 2004, inserted by the Housing and Planning Act 2016, lets a council impose a financial penalty of up to £30,000 as an alternative to prosecution. It cannot do both for the same offence.
Three things landlords get wrong about this figure:
- It is a maximum, not a tariff. Councils publish penalty policies with matrices weighing culpability, harm, the landlord's track record and the size of the portfolio. A first, promptly-remedied breach by a small landlord does not attract £30,000.
- It is per offence, not per tenant. Where several properties are unlicensed, each is capable of being a separate offence.
- There is a right of appeal to the First-tier Tribunal (Property Chamber), and penalties are reduced on appeal often enough to be worth taking seriously.
3. Rent repayment orders — up to twelve months' rent
This is usually the larger number, and the one landlords least expect.
Under sections 40 to 52 of the Housing and Planning Act 2016, a tenant or the local authority can apply to the First-tier Tribunal for a rent repayment order where the landlord has committed certain offences — including controlling or managing an unlicensed HMO under section 72, and an unlicensed house under section 95.
The tribunal can order repayment of up to twelve months' rent. Where the tenant applies, the money goes to the tenant. Where the council applies, it goes to the council, and it can do so where the rent was paid by housing benefit or the housing element of universal credit.
A conviction is not required. The tribunal must be satisfied beyond reasonable doubt that the offence was committed, but the landlord need never have been prosecuted.
On a property let at £1,400 a month, twelve months is £16,800 — payable in addition to any civil penalty.
4. Banning orders and the database
For repeated or serious offending, sections 14 to 29 of the Housing and Planning Act 2016 allow a council to apply to the First-tier Tribunal for a banning order prohibiting a person from letting housing, engaging in letting agency work, or both. The minimum period is twelve months. Breaching one is itself a criminal offence carrying up to 51 weeks' imprisonment.
A banning order offence also triggers entry on the database of rogue landlords and property agents under sections 28 to 39.
5. Section 21 and possession
Under section 75 of the Housing Act 2004, no section 21 notice may be given while an HMO required to be licensed is unlicensed; section 98 does the same for Part 3 houses.
Since the Renters' Rights Act 2025 abolished section 21 for new and existing tenancies from 1 May 2026, this matters less prospectively than it did. It remains relevant to historic matters, and the broader point survives: an unlicensed property is a property whose possession routes are constrained.
How they stack
The council chooses between prosecution and a civil penalty. It cannot do both. But a rent repayment order is separate from either, and a banning order is separate again. A single unlicensed property can therefore produce a £30,000 civil penalty and a twelve-month rent repayment order arising from the same facts.
The cheapest thing you can do
Check whether a licence is needed before you let, not after. Our council licensing index covers every council in England and Wales with the designated areas and dates, and the free compliance check takes about thirty seconds. Working out whether you need one is covered in do I need a property licence?