If you are renting out a property as a House in Multiple Occupation (HMO) without the required licence, you are committing a criminal offence under the Housing Act 2004. The consequences range from substantial financial penalties to losing the right to evict problem tenants. With enforcement increasing significantly in recent years, the risks of non-compliance have never been greater.
Operating an unlicensed HMO is a criminal offence. The High Court has confirmed that it is a continuing offence, meaning that each day the property remains unlicensed constitutes a separate offence.
Councils have two main enforcement routes:
Criminal prosecution: the council can prosecute in the Magistrates' Court. On conviction, there is no upper limit on the fine that can be imposed.
Civil financial penalty: under the Housing and Planning Act 2016, councils can issue a civil financial penalty of up to £40,000 as an alternative to prosecution. This maximum rose from £30,000 under the Renters' Rights Act 2025, in force since 1 May 2026, for serious or repeat offences.
Tenants (and local authorities) can apply to the First-tier Tribunal for a Rent Repayment Order (RRO), requiring the landlord to repay up to 24 months of rent received during the unlicensed period. This maximum doubled from 12 months under the Renters' Rights Act 2025, in force since 1 May 2026, and tenants will have up to 24 months to bring a claim.
As Paul Sowerbutts, Head of Legal at Landlord Action, has stated: "It is not about whether a landlord intended to break the rules but rather about whether they did. In most cases, there is no defence if the property should have been licensed but was not. Our role then becomes one of mitigating the impact, not avoiding it altogether."
Councils are actively pursuing non-compliant landlords. Recent examples include:
Across London, landlords received £13 million in licensing fines between January 2018 and December 2025, according to the Mayor of London's rogue landlord database.
Landlords without a valid HMO licence cannot serve a valid Section 21 notice to regain possession of their property. Any Section 21 notice served while the property is unlicensed is invalid and unenforceable.
If a property is operating without a required licence, the council can make an Interim Management Order (IMO) to take over the management of the property. Under an IMO, the council collects rent and carries out necessary works, deducting costs from the rent collected.
Ignorance of the licensing requirement is not a defence. As Paul Sowerbutts of Landlord Action has stated, the test is whether the property should have been licensed, not whether the landlord knew it needed to be. However, a landlord who has made genuine efforts to comply may have grounds to challenge a prosecution or to mitigate the penalty.
A landmark case at Leicester Crown Court in November 2025 illustrates this. A landlord originally convicted of 29 licensing offences and fined £29,000 plus costs successfully appealed, obtaining "not guilty" verdicts for 25 charges and a reduction in the fine to £0, after demonstrating that she had made genuine efforts to comply and that the council had not followed its own enforcement guidelines.
Use the Tuxa property licence checker to instantly check whether your property requires a mandatory HMO licence, additional licence, or selective licence. With 128 active licensing schemes across England and new schemes launching regularly, checking regularly is essential.
The fastest way to find out whether your property needs a licence is to use the Tuxa property licence checker — enter any UK address and get an instant result showing which schemes apply, scheme dates, and a direct link to the council's licensing page.