Superior landlords will be exposed to rent repayment orders and civil penalties for unlicensed HMOs from 1 May, widening enforcement risk beyond the immediate rent collector and into the ownership chain above them.
For landlords, the change matters most where properties are held through head leases, corporate structures or rent-to-rent arrangements. A freeholder or head lessee who sits one step removed from day-to-day management may still be pulled into enforcement action if the property needs a licence and does not have one.
Need the wider licensing picture? Read Landlord Knowledge’s Landlord licensing guide for HMO licensing, selective licensing, enforcement risk and the compliance issues landlords should watch most closely.
Rent repayment order risk moves up the chain
The change flows from the Renters Rights Act and accompanying government guidance on rent repayment orders for local authorities, which takes effect on and after 1 May 2026. That guidance confirms councils can pursue orders worth up to two years’ rent for a range of housing offences, including operating an unlicensed HMO.
Until now, many landlords took comfort from the Supreme Court’s Rakusen v Jepsen ruling, which limited rent repayment orders to the tenant’s immediate landlord. That position is now changing. Legal commentary published this morning by CMS says the new regime will bring superior landlords into scope where they hold a superior interest in an unlicensed property, even if another company or intermediary sits between them and the occupier.
The practical point is simple. If a landlord benefits from an HMO asset but relies on another party to handle licensing, that distance may no longer protect them. Councils are likely to target the party with the clearest legal responsibility and the strongest balance sheet.
HMO licensing checks can no longer be left to intermediaries
That creates a fresh problem for landlords using headlease and management structures. Paper clauses saying a tenant or operator must obtain a licence may not be enough on their own if the property is in breach. Landlords will need evidence that licensing status has been checked, renewal dates are diarised and occupation levels match the licence in force.
This follows Landlord Knowledge’s report on a £31,000 rent repayment order against a rent-to-rent HMO operator, which showed how quickly licensing failures can turn into tribunal claims. The latest change goes further by widening who may end up paying when councils or tenants pursue action.
It also sits alongside recent compliance pressure in the sector. Earlier this month, Landlord Knowledge reported on HMO application form errors triggering council fines. Taken together, the message is that HMO compliance is getting less forgiving just as the 1 May deadline approaches.
The immediate risk is not just an eventual tribunal award. Civil penalties can reach £40,000, and a licensing breach can become expensive before a landlord even gets to the rent repayment order stage. For portfolio investors, the weak point may be older deals where ownership, management and occupation have drifted apart over time.
What this means for landlords
- If you use a headlease or rent-to-rent structure: check now who is legally responsible for HMO licensing and get written proof that every required licence is live.
- Watch for: properties where room numbers, household mix or licence renewals have changed since the original setup.
- If you hold HMOs through companies: review whether directors, asset owners and managers are all seeing the same compliance information before 1 May.
- Bottom line: from next month, being one step removed from tenants will not necessarily keep a landlord out of an HMO enforcement case.
Editor’s view
This is a sharp change for landlords who assumed structure could soften liability. The firms that fare best after 1 May will not be the most complex – they will be the ones with the clearest grip on licensing, management and evidence.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 22 April 2026
Sources: GOV.UK, CMS
Related reading: Rent-to-rent HMO operator hit with £31,000 repayment order
📘 Renters’ Rights Act: Complete Landlord Guide
Everything you need to know about the new rules – 1 May 2026
