If you may be operating an unlicensed HMO, act promptly
In England, letting an HMO that needs a licence without one is a criminal offence under section 72 of the Housing Act 2004. It can lead to an unlimited fine on conviction or a council civil penalty of up to £40,000, and tenants can apply to the First-tier Tribunal for a Rent Repayment Order. Large HMOs (five or more people forming more than one household) always need a licence, and councils can extend licensing to smaller HMOs in their area.
If your property may need an HMO licence, do not assume that a shared let is exempt or that another landlord’s position matches yours. Check the licensing position with the relevant local authority as soon as possible, and review the property’s condition and your supporting records at the same time.
The immediate priorities are to:
- confirm how the occupiers and households are arranged;
- ask the council whether a licence is required for that address and arrangement, including any local scheme that may apply;
- identify whether an application, renewal or other action is needed;
- gather tenancy, rent, occupancy, maintenance and safety-related documents; and
- deal with reported disrepair or safety concerns promptly, using suitably qualified help where appropriate.
The consequences can be serious where a required licence is absent: in one Haringey case the tribunal ordered the landlord to repay 90% of a year's rent. The precise licensing position, enforcement approach and available remedies depend on the facts and the applicable local requirements, so this is not legal advice.
Key facts
- An HMO rented to five or more people forming more than one household must be licensed, and smaller HMOs may need a licence under a local scheme. GOV.UK
- Operating an HMO that is required to be licensed but is not is an offence under section 72(1) of the Housing Act 2004, punishable by a fine on conviction. legislation.gov.uk
- Instead of prosecuting, a council can impose a civil penalty of up to £40,000 for this offence. legislation.gov.uk
- Tenants can apply to the First-tier Tribunal for a Rent Repayment Order covering a period of up to two years during which the offence was being committed. legislation.gov.uk
- Having a duly made licence application in at the time is a defence to the section 72(1) offence. legislation.gov.uk
- In February 2026 a tribunal ordered a Haringey landlord to repay £7,884.84 (90% of the rent) plus £341 fees for an unlicensed three-person HMO. First-tier Tribunal decision
What the law says
- Which HMOs need a licence. Every large HMO needs a mandatory licence. Councils can also designate additional licensing schemes for smaller HMOs, and selective licensing for other rented homes, so "you may still need a licence depending on the area". Bolton's new borough-wide scheme is a recent example.
- The offence. Having control of or managing an HMO that should be licensed but is not is an offence under section 72(1). A duly made application for a licence is a defence.
- Penalties. On conviction the fine is unlimited (GOV.UK). Instead of prosecuting, the council can impose a civil penalty of up to £40,000.
- Rent Repayment Orders. Unlicensed HMOs are one of the offences that allow tenants to claim rent back. The First-tier Tribunal can order repayment of rent for a period of up to two years during which the offence was committed. That two-year limit applies under the rules in force since 1 May 2026; older cases may be decided under the previous one-year limit, so check the position for your dates.
What happened in the Haringey case?
In a decision dated 5 February 2026, the First-tier Tribunal considered a Muswell Hill flat occupied from May 2023 to May 2024 by three tenants who were not related. Three people would not normally need a mandatory licence, but the flat sat inside Haringey's additional licensing area, a scheme that "came into force on 27 May 2019 and ceased to have effect on 26 May 2024", so it needed one throughout the tenancy.
The tribunal found that no licence had been obtained and that an offence had been committed. It considered "an award of 90 % of the rent for the relevant period" appropriate and ordered the landlord to repay £7,884.84, plus £341 in application and hearing fees. Haringey Council publicised the outcome in August 2026. This was a case-specific outcome, not a prediction of what will happen in every shared property or licensing case.
Keep licensing separate from property-condition concerns
Coverage of the case also described separate concerns about the condition of the property, including mould, fire hazards, a collapsed ceiling, blocked kitchen facilities, exposed pipework, and an alleged lack of basic fire-safety measures such as fire doors and smoke alarms.
Those condition issues should not be treated as the same thing as the licensing offence: the offence the tribunal found was managing an HMO without the required licence. Nevertheless, condition and safety concerns can trigger complaints, inspections and evidence gathering, so they deserve urgent attention in their own right.
A practical review checklist for landlords
Use this as an information-gathering list before speaking to the council or obtaining professional advice.
1. Establish the actual occupation arrangement
Bring together:
- the current tenancy agreement and any renewals or variations;
- names of all occupiers and the dates they moved in or out;
- information showing which occupiers form the same household, where known;
- rent payment records; and
- adverts, application records or correspondence that describe how the property was let.
Avoid relying only on the original plan for the tenancy. The current use of the property may be important, particularly if occupiers have changed over time.
2. Check the council’s licensing position for the address
Contact the relevant local authority and ask clear, address-specific questions. For example:
- Does the current arrangement require an HMO licence?
- Is there a local licensing scheme relevant to this property?
- Is there a licence already recorded for the address, and is it current?
- If a licence may be required, what information does the council need next?
Keep a dated note of the enquiry, the answer received and any documents submitted. Do not assume that a property with three occupiers from separate households will always need a licence: in the Haringey case it did only because the flat was inside an additional licensing area, so the answer depends on the schemes your council runs.
3. Review maintenance and safety evidence
Create a clear file for any reported issue and record what was done. It may include:
- tenant reports, photographs and correspondence;
- inspection notes and dated repair requests;
- contractor reports, invoices and completion evidence;
- records relating to smoke alarms, fire doors or other fire-safety measures where relevant to the property; and
- evidence of follow-up action where work was delayed or incomplete.
If a tenant reports serious disrepair or a potential safety issue, deal with the report rather than merely filing it. Keep a factual chronology: when it was reported, who attended, what was found and what remedial work was completed.
4. Preserve an organised rent and document trail
If there is a dispute or investigation, scattered records make it harder to establish a reliable timeline. Keep tenancy dates, rent records, council correspondence, applications, inspections, repair evidence and costs together for each property.
A landlord-management workflow can help make that review less onerous. You can see how Portfoliq works for an approach to organising property, tenancy, compliance, cost and document information. You can also explore Portfoliq's landlord features when you need a central place to keep those live records. It does not determine whether your HMO needs a licence or provide legal or compliance advice.
If enforcement or a tenant claim is already possible
Do not alter, discard or retrospectively recreate records. Instead, preserve the documents you have, make a dated chronology of events and obtain appropriate independent legal or professional advice for your circumstances.
The Haringey outcome is a useful reminder that an unlicensed-HMO allegation can sit alongside evidence about rent, occupation and property condition. A prompt, accurate review of the local licensing position and a well-organised evidence file are more useful than assumptions.
Key takeaway
Renting to several occupiers does not automatically answer the licensing question. But if a licence is required, operating without it is a criminal offence that can lead to an unlimited fine or a civil penalty of up to £40,000 and, as the Haringey case illustrates, a tribunal Rent Repayment Order. Check with the council, address condition concerns promptly and retain a complete property record.
This article is general information for landlords in England, not legal, tax, financial or investment advice.