Landlord loses possession claim after failing to prove HMO exemption

The Renters’ Rights Act 2025 is coming soon, with the first phase commencing from 1^st May 2026, which includes the abolishment of section 21 ‘no fault’ evictions.  Landlords will still be able to serve, and rely on, a section 21 notice up to the end of April.  However, landlords should bear in mind that it is more important than ever to get things right to ensure any section 21 notice served is valid.

A landlord has failed to regain possession of a property after a court ruled that it had not shown the building was properly exempt from HMO licensing requirements when a section 21 notice was served.

Laura Murphy, Paralegal in our Dispute Resolution team provides an update.

The case was heard at Luton County Court, where Regency Property Management (UK) Limited sought possession of a shared property from two tenants using a section 21 “no-fault” eviction notice.

The court was asked to decide two narrow issues: whether the notice had been served correctly, and whether the property was an unlicensed House in Multiple Occupation (HMO) at the time the notice was given.

On the service point, District Judge Hayes found in the landlord’s favour. The judge ruled that a single notice addressed to both joint tenants was valid and that delivery to the property address was sufficient under the tenancy agreement.

However, the landlord ultimately lost the case on the HMO licensing issue, which proved decisive.

The property had previously been licensed as an HMO, but that licence had expired before the claimant acquired the building. The landlord argued that it had submitted a Temporary Exemption Notice (TEN) to Luton Borough Council, which would have allowed the property to operate without a licence for a limited period while works were carried out.

The judge rejected that argument.

The court found there was no reliable evidence that the council had been properly notified in line with the Housing Act 2004. Although the landlord relied on emails and documents suggesting attempts had been made to engage with the council, the judge said this fell short of proving that notification had been “duly given” or that an exemption was in force.

An application by the landlord to introduce further evidence late in the proceedings was also refused. The judge said the disclosure failures were serious, unexplained and would cause further delay if allowed.

As a result, the court concluded that the property was an unlicensed HMO at the time the section 21 notice was served in January 2024. Under the law, landlords cannot rely on section 21 notices while a property is operating as an unlicensed HMO.

The possession claim was therefore dismissed.

In his judgment, District Judge Hayes stressed that the consequences of non-compliance were strict. Informal communications with a local authority, assumptions about licensing status, or incomplete paperwork were not enough. A landlord must be able to clearly demonstrate that a property is licensed or properly exempt at the time a section 21 notice is served.

The case serves as a reminder to landlords that HMO licensing issues must be resolved — and documented — before taking possession action.  Landlords should make sure that, before serving a section 21 notice, everything is “watertight” to avoid the risks of a court finding the notice invalid and therefore losing the ability to rely on section 21 following 1^st May 2026. 

If you would like more information about the issues raised in this article please contact Laura on 01228 516666 or click here to send her an email.