£28,000 Tribunal Award Highlights the Cost of Rental-Law Non-Compliance

A landlord was ordered to pay more than £28,000 to four tenants after a tribunal found that the property was being operated as an unlicensed HMO.

The case involved a property in Tower Hamlets that fell under the council's additional licensing scheme.

What happened?

According to the tribunal reporting, one tenant had contacted the council about the property's licensing status.

The landlord subsequently removed a council letter concerning the issue.

The tribunal also heard allegations concerning repeated visits to the property without the required notice.

The case additionally involved tenancy deposits that had not been protected in an approved deposit-protection scheme.

Why licensing matters

Local authorities can introduce additional or selective licensing schemes for certain rental properties.

Where a property falls within such a scheme, landlords may need to obtain the relevant licence and meet specified management requirements.

Operating without the required licence can expose landlords to serious financial consequences.

Tenant deposits are another important obligation

Landlords in England and Wales generally have legal responsibilities concerning tenancy deposits where the relevant rules apply.

Failure to comply can create financial and legal risks.

The tribunal case illustrates why landlords should maintain proper records and ensure that deposits, licences and tenancy documents are handled correctly.

Landlords should understand local rules

Licensing requirements can vary between councils.

A landlord who owns several properties in different areas should therefore not assume that one local authority's rules automatically apply elsewhere.

Before letting a property, landlords should establish:

• Whether licensing applies

• Which licence is required

• The licence conditions

• Deposit requirements

• Property safety requirements

• Inspection obligations

• Record-keeping requirements

Compliance is now a core investment cost

The modern buy-to-let business is increasingly about more than collecting rent and paying a mortgage.

Landlords must also manage regulatory responsibilities.

The recent tribunal award demonstrates that ignoring those responsibilities can result in substantial financial exposure.

Legal note: This article summarises reported proceedings and is not a substitute for legal advice.