Havering Unlicensed Property Penalty: Fines, Rent Repayment Orders and POCA

The Cost of Operating Without a Licence

Letting a property in Havering without the required licence isn't a technical oversight the council overlooks. The borough actively enforces its licensing schemes, and the financial consequences of non-compliance stack up from multiple directions simultaneously.

As of January 2025, Havering's public register listed 255 mandatory HMO licences, 69 additional licences, and 3,206 selective licences — against an estimated 10,474 licensable properties in the borough. That compliance gap means the council has a substantial enforcement pipeline ahead of it.

Civil Financial Penalties

Since 1 May 2026, operating an unlicensed HMO (Section 72(1)) or an unlicensed selective property (Section 95(1)) carries a civil financial penalty of up to £40,000 per offence under Section 249A of the Housing Act 2004 as amended.

Havering calculates penalties using a structured matrix based on culpability, harm, and portfolio size:

• +20% uplift if the landlord owns or manages six or more properties, is a company/director, or has significant letting experience
• -20% reduction only if the landlord has no more than two properties, no prior enforcement history, and cooperates fully with the investigation

Penalties can be applied per individual offence. A property that's unlicensed, overcrowded, and in breach of HMO management regulations could attract separate penalties for each failing.

Rent Repayment Orders

Tenants or the local authority can apply to the First-tier Tribunal for a Rent Repayment Order (RRO) against a landlord operating an unlicensed property. Under the Housing and Planning Act 2016, RROs allowed recovery of up to 12 months of rent. The Renters' Rights Act 2025 extended this to up to 24 months.

This is a separate proceeding from the civil penalty. A landlord can face both a council fine and a tenant-initiated RRO for the same period of unlicensed operation — the costs don't offset each other.

Proceeds of Crime Act Confiscation

In serious cases, Havering pursues confiscation orders under the Proceeds of Crime Act 2002 (POCA) to recover illegal rental income. This is reserved for criminal prosecutions rather than civil penalties, but Havering has used it.

In Havering Borough Council v. Shamsul Huda (2025, Snaresbrook Crown Court), a landlord convicted of operating an unlicensed, overcrowded HMO received a £5,000 fine with £14,294 in costs, plus a £33,698 POCA confiscation order with a mandatory two-year custodial sentence for non-payment. The total exposure from a single unlicensed property exceeded £50,000.

The Enforcement Process

Havering doesn't jump straight to a penalty. The typical sequence:

1. Housing enforcement officers identify the suspected offence — often through complaints, council tax data cross-referencing, or public register audits
2. Officers calculate a baseline fine based on assessed harm and culpability
3. The portfolio calibration adjustment is applied (±20%)
4. The council serves a Notice of Intent detailing the alleged offence, penalty amount, and evidence
5. The landlord has 28 days to submit written representations
6. The council reviews and issues a Final Notice — confirming, reducing, or withdrawing the penalty
7. The landlord can appeal the Final Notice to the First-tier Tribunal within 28 days

An appeal suspends the penalty until the Tribunal makes its determination. The Tribunal can confirm, reduce, increase, or set aside the penalty.

Loss of Fee Discounts

Even if you avoid a penalty, getting caught before applying has financial consequences. All of Havering's Part B fee discounts — the £100 accredited landlord discount and the £75 EPC C+ discount — are forfeited if the council has already issued a formal warning letter or notice for unlicensed operation. That's up to £175 more on every licence application going forward.

What Protects You

Submitting a valid, complete licence application and paying the Part A fee gives you "duly made" status under the Housing Act 2004. This statutory protection means you can continue letting the property while the council processes the application without being exposed to prosecution.

The Havering Landlord Licensing guide covers the full application process to get you into "duly made" status as quickly as possible, including the document checklist and portal workflow.

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