Section 72: the three ways an HMO licence goes criminal

Scope: England and Wales — section 72 sits in the Housing Act 2004, which extends to both. Scotland has an entirely separate HMO regime under the Housing (Scotland) Act 2006; see the divergence map.

Landlords talk about "the unlicensed HMO offence" as though it were one thing. Section 72 of the Housing Act 2004 creates three, and they catch different people in different situations. Two of them apply to landlords who hold a licence.

The three offences

s.72(1) — controlling or managing an unlicensed HMO

The one everyone means. The property is required to be licensed, and it is not. Note the wording: having control of or managing. That is a factual test about who receives the rack rent and who runs the property, not a question of who is named on the title — which is why it reaches intermediaries in rent-to-rent arrangements and can reach more than one person at once.

s.72(2) — knowingly permitting over-occupation

You hold a licence, and you knowingly permit the property to be occupied by more people than the licence allows. The word doing the work is knowingly: unlike the others this one has a mental element built in, so it turns on what you knew or shut your eyes to.

This is the offence that catches a landlord who lets a fifth person move into a four-person licensed HMO and decides not to ask questions.

s.72(3) — breach of any other licence condition

The broadest and the most overlooked. Any condition, not just the interesting ones. Fire door standards, tenancy documentation, waste arrangements, a training requirement where a council imposes one.

Each condition is a separate offence. A single inspection finding three breaches produces three offences, not one — which is how a "minor" paperwork problem becomes a multiple.

What each one costs

Prosecution: an unlimited fine

All three carry an unlimited fine on summary conviction. If you look them up on legislation.gov.uk you may still see a £20,000 maximum for s.72(1) and level 5 for the others — those printed figures stopped applying on 12 March 2015.

LASPO 2012 section 85, commenced by SI 2015/664, converted every summary maximum of £5,000 or more into a fine of any amount. It did this generally rather than by amending each provision textually, which is why the old numbers are still printed. Anything scraping penalty figures from the statute reproduces them faithfully and wrongly — see why legislation.gov.uk shows the wrong fine.

Or a civil penalty: up to £40,000

Instead of prosecuting, a council may impose a financial penalty under section 249A. Since 1 May 2026 the ceiling is £40,000, raised from £30,000 by SI 2026/319.

Both ceilings are live. Regulation 4 of that instrument says the increase does not apply where the conduct amounting to the offence occurred before it came into force. So the ceiling is fixed by when the letting happened, not by when the council got round to you. Conduct before 1 May 2026 is still capped at £30,000, and a landlord being penalised in 2027 for a 2025 letting is a £30,000 case.

Never both

Section 249A(5) is explicit: a council may not impose a civil penalty for conduct it has prosecuted, and may not prosecute conduct for which it has imposed one. It picks a route.

What it does not prevent is a rent repayment order on top, or a banning order. Those are separate proceedings brought by separate people. One unlicensed let can produce a £40,000 civil penalty and a two-year rent repayment order from the same facts.

The defences

s.72(4) — an application already in

A defence where, at the material time, a duly made application for a licence or a temporary exemption notice was in force. "Duly made" matters: a half-completed application with the fee unpaid is not one.

This is the single most valuable thing to know if you discover you should have licensed. An application does not undo the earlier period, but it starts the clock on this defence for everything after it.

s.72(5) — reasonable excuse

Available for all three offences. It is narrower than landlords hope. "I did not know the scheme existed" is generally not a reasonable excuse — designations are publicly advertised and the duty is on the landlord to check. What tends to work is genuine impossibility or matters outside your control, not inattention.

The new reverse-burden defences: (4A) and (4B)

Section 100 of the Renters' Rights Act 2025 inserted subsections (4A) and (4B) into section 72. These are reverse-burden defences: the defendant must prove the matter rather than merely raise it. If you are relying on one, the evidence has to be assembled by you and it has to be good enough to satisfy the court.

Strict liability, and it keeps running

Mohamed v Waltham Forest LBC [2020] EWHC 1083 (Admin) is the case to know. Two points:

• The s.72(1) offence is strict liability. There is no requirement to prove the landlord intended anything, or knew the property needed a licence. Contrast s.72(2), which has "knowingly" written into it.
• It is a continuing offence. It is committed for as long as the property remains unlicensed, rather than crystallising on a single day.

The practical consequence of "continuing" is that delay makes it worse rather than safer. A landlord waiting to see whether the council notices is accumulating offence, not running down a clock.

Rent repayment orders attach to s.72(1), not s.72(3)

An important distinction, and one that catches people out in both directions.

The RRO trigger is section 72(1) — controlling or managing an unlicensed HMO. Breaching a licence condition under s.72(3) is not an RRO offence. A landlord with a licence who breaches a condition faces prosecution or a civil penalty, but not a rent repayment order on that basis.

Where an RRO does apply, since 1 May 2026:

• Up to two years' rent for offences on or after that date; twelve months for earlier ones.
• The application window is 24 months from the offence.
• It reaches superior landlords and officers of a company personally, where the offence was committed with their consent or connivance or through neglect.
• The criminal standard applies. The tribunal must be satisfied beyond reasonable doubt that the offence was committed — but no conviction is required, and the landlord need never have been prosecuted.

What section 72 no longer does

Until 1 May 2026, section 75 of the Housing Act 2004 meant no section 21 notice could be served while a licensable HMO was unlicensed. Section 21 was abolished that day and section 75 was repealed with it.

We are not going to replace that with an invented rule. As the licensing guide sets out honestly, no provision has been established making licensing status a direct bar to a possession order under the amended section 8 grounds. What is true is that bringing a possession claim on an unlicensed property puts the licensing failure in front of the court and invites an RRO counterclaim. That is a practical risk, not a statutory bar, and the difference matters if you are planning around it.

If you have just realised you should be licensed

1. Apply now, properly. A duly made application engages the s.72(4) defence going forward. Half an application engages nothing.
2. Do not wait to be found. It is a continuing offence, so waiting increases exposure and removes the co-operation argument that moves civil penalty amounts.
3. Work out which offence you are facing. Unlicensed, over-occupied and condition breach have different defences and different RRO consequences.
4. Date the conduct. Whether your ceiling is £30,000 or £40,000 turns on when the letting happened.
5. Use the 28 days. A notice of intent is not a final notice, and representations evidencing low culpability, no harm and prompt remedy move real money.

Information tool, not legal advice.