Rent repayment orders: what an unlicensed property actually costs

Most writing about licensing penalties leads with the £30,000 civil penalty, because it is the biggest number. In practice the rent repayment order is the one landlords meet, because a council has to choose to act and a tenant only has to apply.

What an RRO is

A rent repayment order is an order of the First-tier Tribunal requiring a landlord to repay rent already paid. It sits in Chapter 4 of Part 2 of the Housing and Planning Act 2016 and covers a defined list of offences — of which controlling or managing an unlicensed property is the most commonly used, under section 72 of the Housing Act 2004 for HMOs and section 95 for Part 3 properties.

It is not compensation. The tenant does not have to show loss, harm, or that anything about the property was wrong. The rent was paid; the offence was committed; the order requires repayment.

Who can apply

• The tenant, for rent they paid personally.
• The local authority, where the rent was paid through housing benefit or the housing element of universal credit.

In a shared house each tenant can apply separately for their own rent, which is why an unlicensed HMO with four sharers is four applications rather than one.

How much, and over how long

The Renters' Rights Act 2025 raised the maximum from twelve months' rent to two years' rent for the offences covered. The period is one during which the offence was being committed and the applicant was a tenant, ending within the twelve months before the application.

The tribunal decides the amount within that ceiling, taking account of the landlord's conduct, the tenant's conduct, the landlord's financial circumstances, and whether the landlord has been convicted of a relevant offence. Awards short of the maximum are common; awards of nothing are not, where the offence is established.

Why unlicensed letting is the easiest RRO to win

Because the offence is one of strict liability subject to a reasonable excuse defence, and the facts are usually documentary. Was a licence required in that area on those dates? Was one held? Both questions are answered from the council's designation and the council's licence register, neither of which is in the landlord's control.

There is no need to prove disrepair, bad management, or intent. "I did not know the area was designated" is not, on its own, a reasonable excuse — and this is precisely where the Croydon date conflict becomes expensive: 24 days of unlicensed letting at the start of a tenancy can support a claim over a much longer period.

The arithmetic landlords get wrong

A short unlicensed period is not a small exposure. The award is calculated on a period during which the offence was being committed — so if a property was unlicensed for the whole of the tenancy to date, the relevant period is that whole time, up to the statutory ceiling, not the days between noticing and fixing.

On a £1,400 a month let, twelve months is £16,800 and two years is £33,600, per tenant able to apply. Against a licence fee that in our records runs to a few hundred pounds — selective licences we hold run from £350 to £1,100.

What actually helps

• Apply before letting, not after. A duly made application is relevant to reasonable excuse; an unmade one is not.
• Keep the council's own words. A dated written reply saying no licence is required is the strongest thing you can hold.
• Diarise commencement, not designation. The offence starts when the scheme comes into force.
• Check at every letting. Schemes are designated and lapse mid-tenancy — see schemes in transition.

For tenants

If you rent privately and suspect the property should be licensed, check the council's position on our licensing index and then check the council's public licence register for the address. Applications go to the First-tier Tribunal (Property Chamber). Many councils' tenancy relations teams will confirm whether a property is licensed on request.

Information tool, not legal advice. Tribunal outcomes turn on their facts.