Unlicensed HMO or rental property: what to do now

If your property needs a licence and does not have one, every day counts. The offence continues until a complete licence application is made, and rent repayment orders are calculated from the period it ran. Here are the steps in order.

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Information, not legal advice. If you have already received a council letter, a notice of intent or a tribunal application, take advice from a solicitor now.

Step 1: confirm which licence you need

Check the council's schemes: mandatory HMO (5+ people in 2+ households), additional HMO (usually 3+ people in 2+ households in a designated area) or selective (most rented homes in a designated area). Use the postcode check above or your council page from the selective licensing table. Read do I need an HMO licence? if unsure.

Step 2: make a complete application straight away

It is a defence to the licensing offence that an application had been duly made and was still effective. That usually means the full online form, the fee (or first part) and the required documents. Keep the acknowledgement and payment receipt. See how to apply. We can prepare the application for a fixed fee (pricing).

Step 3: or ask for a temporary exemption notice

If you intend to stop the property being licensable (fewer occupiers, a single household, sale), write to the council asking for a temporary exemption notice under section 62 (HMOs) or section 86 (selective licensing). It lasts up to 3 months; a second can be granted only in exceptional circumstances. Do not evict tenants to avoid licensing: unlawful eviction is itself an offence.

Step 4: fix the property

Councils inspect before or after granting a licence. Get current gas safety and electrical (EICR) certificates, check smoke and carbon monoxide alarms, fire doors and escape routes, and room sizes (6.51 m² for one adult). See HMO rules.

Step 5: understand your exposure

RiskWhat it meansFrom the tribunal decisions
ProsecutionUnlimited fine and a criminal record (Housing Act 2004 s.72 or s.95)—
Civil penaltyUp to £40,000 per offence from 1 May 2026 (£30,000 before)Median £7,000 in the council notice for appealed licensing penalties; £5,827 after appeal
Rent repayment orderUp to 2 years' rent for offences from 1 May 2026 (12 months before)Median £6,534 for unlicensed HMOs; £5,645 for selective licensing
Management orderIf a licence cannot be granted, the council may take over management through an interim management order—
Banning order and database entryFor some repeated or serious offences—

More detail: rent repayment orders (with a calculator) and civil penalties.

Step 6: if a council or tenant has already acted

  • Council letter or inspection: reply promptly and apply for the licence.
  • Notice of intent (civil penalty): you have 28 days to make written representations.
  • Tribunal application (RRO): follow the tribunal's directions and deadlines exactly.

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Unlicensed HMO questions

What is an unlicensed HMO?

An unlicensed HMO is a house in multiple occupation that needs a licence (mandatory, or additional where the council has a scheme) but does not have one, and no valid application or temporary exemption notice is in place. Controlling or managing it is an offence under section 72(1) of the Housing Act 2004.

What is the unlicensed HMO fine?

On conviction the fine is unlimited. As an alternative the council can impose a civil penalty; GOV.UK guidance says the maximum for Housing Act 2004 offences is £40,000 from 1 May 2026 (previously £30,000). A rent repayment order can be made as well.

Can I still collect rent from an unlicensed HMO?

The tenancy is not void and rent remains payable, but the tenant or council can apply for a rent repayment order to recover rent paid while the offence was being committed.

Does a licence application stop the offence?

Yes, from the date it is duly made. It is a defence to the licensing offence that an application for a licence (or notification for a temporary exemption notice) had been duly made and was still effective. "Duly made" generally means a complete application with the fee, so keep the council's acknowledgement.

What is a temporary exemption notice?

If you are taking steps so the property will no longer need a licence (for example reducing occupiers or selling), you can notify the council and ask for a temporary exemption notice. If granted it lasts up to 3 months, and a second notice can be granted in exceptional circumstances. While it is in force, the property does not need a licence.

Sources

Last checked 28 Sep 2026. Information, not legal advice. Licensing schemes change often; always confirm with the council before you act.