Tenants ordered to pay landlord £3,240 over failed RRO claim

Six tenants have been ordered to pay a landlord £3,240 after a tribunal found four examples of unreasonable conduct in a withdrawn rent repayment order (RRO) claim worth about £60,000.

The case unravelled over a licensing period that did not exist.

The First-tier Tribunal found the east London HMO had been licensed throughout the tenants’ occupation, despite a claim for repayment of 12 months’ rent.

The tenants rented the Tower Hamlets property from September 2022 to September 2024 at about £60,000 a year.

Justice for Tenants, which represented them, initially advised in December 2024 that there was a potential claim covering two months because it believed there had been a gap between HMO licences.

However, the tribunal found that one licence covered the period from 6 August 2021 to 5 August 2024, while a second ran from 6 August 2024 to 5 August 2027.

Landlords can defend themselves

Aaron Nguyen Lu, a director of Acquire Estate Agents which acted for the landlord, said: “This decision demonstrates that the Tribunal will not tolerate speculative or improperly investigated Rent Repayment Order claims.

“Landlords are entitled to defend themselves against claims which should never have been brought and, in appropriate cases, recover their costs.”

He added: “The vast majority of landlords and agents comply with licensing requirements.

“Where claims are pursued despite clear evidence to the contrary, there must be consequences.

“This decision reinforces the importance of proper due diligence and responsible conduct by all parties involved in RRO litigation.”

‘Most egregious example’ of unreasonable behaviour

Despite its earlier advice, Justice for Tenants applied in May 2025 seeking repayment of 12 months’ rent.

The tribunal said this was the ‘most egregious example’ of unreasonable behaviour in the case.

On the same day, an offer was made to settle the proceedings for 85% of the annual rent.

The tribunal said most rent repayment orders were between 40% and 60% of the rent claimed and found there could have been no genuine belief that 85% was a reasonable settlement figure.

It added: “On the contrary, we find it was made to intimidate the landlord, who had no legal advice at that point.”

Landlord applied for costs

The tenants withdrew their application in October 2025, and the tribunal consented to the withdrawal the following month.

The landlord, VHGK Limited, then applied for costs under rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.

Judges identified four examples of unreasonable conduct, beginning with a defective request for licensing information sent to Tower Hamlets Council.

They found the request failed to ask whether a licence had been in force throughout the relevant period, allowing an incorrect inference to be drawn from the council’s response.

Matters of ‘unreasonable behaviour’

The second issue concerned the unexplained belief that no licence existed between 8 May and 29 July 2024, despite Justice for Tenants having established that an earlier licence had been granted.

No representative involved in the original investigation gave oral evidence to explain what checks had been carried out.

The tribunal also criticised the 12-month application and the 85% settlement proposal, finding that each of the four matters objectively amounted to unreasonable behaviour.

Acquire Estate Agents dealt with the original claim for the landlord and charged £240 for four hours’ work. The tribunal allowed that sum in full.

A further £3,000 was awarded for counsel instructed to represent the landlord at the oral costs hearing.

The tenants had argued that the legal fees were disproportionate because the original costs in dispute were only £240.

However, the tribunal found the landlord had acted reasonably by seeking specialist representation and could not have obtained suitable representation for less.