Property licensing specialists Landlord Licensing & Defence are raising the alarm over a concerning enforcement tactic being used by some local authorities, where minor mistakes on application forms are triggering substantial fines for landlords.
According to the firm, an increasing number of councils – most recently a Midlands authority – are penalising landlords thousands of pounds for simply selecting the wrong option on House in Multiple Occupation (HMO) licence applications. In one high-profile case, a landlord was fined more than £5,000 after the council refunded their licence fee on the grounds that they had applied for the “wrong type” of HMO licence.
Landlord Licensing & Defence highlights that other councils are also rejecting applications where landlords inadvertently use an “additional” licensing form instead of a “mandatory” one, or vice versa, despite both forms covering identical licence conditions.
By rejecting the application and refunding the fee—often without notifying the landlord—the council removes the statutory protection granted under the Housing Act 2004 for an “application duly made.” Once this protection is gone, landlords are immediately exposed to Civil Penalty Fines for operating an unlicensed HMO, leaving them facing potentially crippling financial consequences.
Experts warn landlords to exercise extreme caution and seek professional guidance when submitting HMO licence applications to avoid falling victim to this growing enforcement loophole.
Phil Turtle, the compliance director at Landlord Licensing & Defence, said: “Whilst we achieved a reduction in this case, the council refused to accept they had created the situation.
“They have no right in law to refuse an HMO licence application simply because it was the ‘wrong sort’ of HMO application, but they are unregulated, unaccountable and frankly landlord-hating.
“It is the classic equivalent of British Rail blaming ‘the wrong sort of snow’ on the line!”
He continued: “Sadly, the landlord was not prepared to take this to the First-tier Tribunal because of the severe reputational damage that a public airing would inflict on their business, which would have carried a far greater impact than the fine itself.
“Effectively, a landlord was bullied into accepting the council’s unlawful action as their own guilt!”
Under the Housing Act 2004, there is no legal justification for a local authority to refuse or refund an HMO licence application that has otherwise been duly made just because the landlord did not understand the difference between two identical schemes or ticked the wrong box.
“It’s obviously morally repugnant,” added Mr Turtle. “The licences for most councils are exactly the same and rarely state whether they are mandatory or additional on the final document.
“By acting in this manner, councils are acting unlawfully and, as will surprise no-one, immorally.
“They are using pure bureaucracy as a weapon to generate enforcement revenue rather than to improve housing standards.”
