What is a rent repayment order?

A rent repayment order is an order issued by the First-tier Tribunal that requires repayment of rent from a landlord who commits an offence in the legislation. Rent repayment orders can require a maximum repayment of up to 12 months of rent if convicted. 

Landlords need to understand rent repayment orders. This ensures they prevent any offences that could result in a rent repayment order. We will discuss in more detail the grounds for issuing a rent repayment order before going into how to calculate them, how to prevent them, and lastly, the legal implications. 

When were rent repayment orders introduced and why? 

Rent repayment orders were first introduced by the Housing Act in 2004 to penalise landlords who failed to license their property, especially in houses of multiple occupations. Since 2004, rent repayment orders have developed and cover many more offences now and allow tenants to make claims. 

Although there are a relatively small number of landlords that would commit such offences. The government wanted to crack down on bad landlords and get rid of them through penalties. Since the expansion of the order in 2016, more people have become aware of the order, and more landlords face the risk of being issued with a rent repayment order.

Understanding rent repayment orders

The purpose of a rent repayment order is to provide tenants with up to 12 months of full rent payments in the event their landlord commits an offence such as evicting a tenant illegally or discriminating against them. Here are the grounds for issuing a rent repayment order:

• Using or threatening violence to secure entry into the premises
• Illegal eviction or harassment
• Failure to comply with improvement notice
• Failure to comply with prohibition order
• Breach of banning order
• Having control of, or managing an unlicensed property

If you commit any of the above offences, a rent repayment order can be issued against you, and you can be liable to pay up to 12 months of rent to the tenant or housing association. A rent repayment order can only be issued to the immediate landlord, and the tenant must apply within 12 months of the offence for the application to be considered eligible. 

Calculating rent repayment order amounts

If a landlord has committed an offence that results in having to pay rent repayment orders, the amount of the order usually depends on the severity of the offence committed and the extent of the impact it had on the tenant. Here are some of the key factors to take into account: 

• The seriousness of the offence: If the offence is quite severe, there may be a higher repayment amount. For example, illegal eviction or harassment would result in a larger penalty than minor breaches of housing regulations. This is to prevent other landlords from committing these offences through deterrence.

• The impact on the tenants: Depending on how much of an impact the offence has on the tenant, it can also influence the decision made by the judge. For example, if there is stress, loss of income, or disruption to tenants’ lives, this could increase the rent repayment order amount.

• History of offences: This may result in more severe consequences compared to first-time offenders.

Interest will be the same as the statutory rate, which is currently 8% per year. Additional costs may include legal fees and court costs associated with the claim. 

How to avoid rent repayment orders

To avoid the risk of receiving rent repayment orders, landlords should prioritise effective communication, timely maintenance, and compliance with authorities and regulations.

Maintain open communication with your tenants 

Open communication with your tenants is really important for maintaining a close and positive relationship. Landlords shouldn’t shy away from rent repayment orders, and landlords should ensure their tenants understand what a rent repayment order is and that it is clearly outlined in the tenancy agreement. As long as you maintain open and regular communication, you can prevent any problems from escalating. 

Provide adequate maintenance of a property

Prioritising your tenant’s requirements and making sure that all maintenance requests are attended to promptly can improve your tenant-landlord relationship and avoid rent repayment orders being issued. By neglecting your obligations, you can cause tenant dissatisfaction, which is where problems can arise. 

Comply with authorities and follow regulations 

It is fairly simple to avoid being issued a rent repayment order as long as you comply with authorities and follow the basic regulations that come with being a landlord. All landlords should be familiar with their obligations under housing law and make sure that they treat all their tenants equally and with respect. This includes respecting tenants’ privacy, avoiding harassment, and complying with notice periods for eviction. 

By implementing these strategies, landlords can significantly reduce the risk of rent repayment orders and maintain a positive relationship with their tenants. It’s always best to consult with a legal professional for help and advice.

Legal implications of rent repayment orders

As we have touched on above, various legal implications can arise when rent repayment orders are issued to landlords. From financial penalties for non-compliance to the potential impact on future rental income and reputation. 

If you do commit offences, it can ruin your reputation. As well as make it harder for you to find new tenants. This can significantly impact your future rental income and livelihood. 

All landlords need to understand rent repayment orders and ensure they are compliant with the rules and regulations that are involved when letting property. Remember to seek legal advice if you need further advice. If you are a landlord and are looking for landlord insurance to protect your property, CIA Landlords provides comprehensive quotes compared with nine leading insurers. Get in touch with us today or call us at 01788 818670.