HMO landlord wins appeal against penalty
Original Article Summary
Judgment likely to have implications for councils, landlords and property managers involved in HMO enforcement cases
PropMatch Curated Analysis
The Upper Tribunal has ruled that 'rack-rent' under the Housing Act 2004 must be based on a property's actual use as an HMO, not a hypothetical lawful-use valuation, overturning a £19,600 penalty against an owner whose management company operated an unlicensed HMO without her knowledge. The ruling narrows when an owner can be classed as a 'person having control' and has wider implications for HMO enforcement liability.
Investor Relevance
HMO investors who delegate management to third-party agents need to understand the legal boundary between being a 'person having control' and a 'person managing' — this ruling reduces but does not eliminate enforcement risk for passive owners receiving fixed management fees, and highlights the importance of monitoring licence status even when management is outsourced.
Original Source:
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