No HMO fines for let-only agents after court ruling

Let-only letting agencies could escape tens of thousands of pounds in fines after a landmark Upper Tribunal ruling.

Direct Discover Residential Limited had been fined over £7,000 for involvement in controlling or managing an illegal HMO. The agency was working on a let-only basis and had placed two new tenants, which took the total number of residents to five, making it a licensable HMO. While they had taken the tenants’ first month of rent in advance, that was where their involvement ended.

When the agency took their case to the First-tier Tribunal, the court reduced the fine but upheld the offence. But in their subsequent appeal, the Upper Tribunal clarified the law and cancelled the fine.

According to Judge Martin Rodger KC, who found in favour of the agency, agents who aren’t involved in the continuing management of the property shouldn’t be treated as a “person managing” an HMO under the Housing Act 2004.

The ruling means that agents who work with landlords on a let-only basis will be protected from potentially unlimited fines. Agencies who have been fined for managing unlicensed HMOs may also be able to appeal.