Commentary on Sections Part 2 – Licensing of Houses in Multiple Occupation Section 73: Other Consequences of operating unlicensed HMOs: rent repayment orders
209.Section 73 confirms that notwithstanding any common law rule that unlawful contracts are not enforceable, a tenancy or licence in respect of an HMO remains enforceable, even if the landlord is required to obtain a licence under Part 2 of the Act but fails to do so. The section provides, however, that a landlord who receives rent while operating an unlicensed property could be liable to a penalty equivalent to any rent received during the period of the offence, up to a maximum of 12 months. The RPT has the power to make a 'rent repayment order', imposing this penalty where it determines that an offence has been committed under section 72(1).
210.An LHA is entitled to make an application for a rent repayment order to the RPT where a landlord or managing agent has committed an offence under section 72(1) (irrespective of whether there has been a prosecution), and Housing Benefit has been paid during any period when such an offence was being committed. An occupier who has paid money to the landlord is also permitted to make an application to the RPT for a rent repayment order where any rent was not paid out of Housing Benefit and where the landlord has been convicted of an offence under section 72(1), or an order has already been granted to an LHA in respect of the same property.