Who is liable for an unlicensed HMO in a rent-to-rent chain, and can it fall on you personally?

In England, rent-to-rent HMO liability now needs to be checked at three levels: the operating company, any superior landlord, and—after 1 May 2026—some directors personally. Wales, Scotland and Northern Ireland do not all use the same RRO route, so the answer changes outside England.

In a rent-to-rent chain, who is liable for an unlicensed HMO - the operator or the property owner?

In England and Wales, an unlicensed HMO can expose both the rent-to-rent operator who controls or manages the HMO and, from 1 May 2026, a superior landlord with an estate or interest above the occupiers’ rights. Housing Act 2004 section 72 now catches “any person having control of or managing the HMO” and also “any person who as landlord under a tenancy or licensor under a licence to occupy has an estate or interest in, or a right in relation to, the HMO that is superior”. That means the change does not reduce the immediate landlord’s exposure by spreading liability; it creates a route for both the operator and the property owner to be pursued for the same unlicensed HMO if the statutory conditions are met. A head-lease clause banning room-by-room occupation is not enough by itself, because section 72 says an occupation term “does not on its own constitute a defence”. Scotland and Northern Ireland are different: their HMO statutes focus on the owner, not the English RRO chain.

Can a Rent Repayment Order be made against you personally as a director?

Before 1 May 2026, an English Rent Repayment Order could not be made personally against a company director merely because the company was the landlord; from 1 May 2026, a director can be pursued personally in England if the corporate offence was committed with that director’s consent, connivance or neglect and section 51A applies. The old position came from Kaszowska, where the Upper Tribunal said “the only person against whom section 40(2) permits a rent repayment order to be made is a landlord”, and Rakusen, where the Supreme Court said “an RRO cannot be made against a superior landlord”. The Renters’ Rights Act changes that hinge for offences on or after 1 May 2026: section 51A treats the relevant director “as well as the body corporate” as having committed the offence, and the guidance tells tenants to name directors, managers or senior officers as respondents as well as the company. Wales keeps the older RRO structure; Scotland and Northern Ireland have no HMO RRO equivalent.

Does a personal guarantee on the head-lease make you personally liable for a Rent Repayment Order?

No legislation ties a personal guarantee on a rent-to-rent head-lease to Rent Repayment Order liability: the guarantee is a contract debt route, while an RRO is a statutory liability route. That distinction disproves the common sales pitch that a director’s guarantee is RRO protection in itself. A guarantee may make you personally liable to the property owner for the rent-to-rent company’s head-lease obligations, such as unpaid guaranteed rent, damage, indemnities or other promised sums if the wording covers them. It does not, just because it exists, make you personally liable to occupiers for an RRO. In England from 1 May 2026, the personal RRO route is instead section 51A: where the corporate landlord commits the relevant offence and the statutory director-liability test is met, “a reference to the landlord includes that person”. Owners still ask for guarantees because rent-to-rent companies are often asset-light, but that is commercial credit protection, not a statutory transfer of RRO liability.

Can HMRC pursue you personally for your rent-to-rent company's VAT bill?

HMRC usually cannot pursue a director personally for a rent-to-rent company’s VAT bill just because the company cannot pay, but it can do so in specific UK-wide insolvency and misconduct routes such as a joint liability notice. HMRC’s debt manual states the baseline rule for limited companies plainly: “the directors are not responsible for the debt because they have limited liability.” A VAT debt after the Sonder Europe analysis therefore starts as the company’s debt, even if the company later becomes insolvent. The main personal-risk route is not a rent-to-rent VAT rule but the Finance Act 2020 joint-and-several-liability regime, which can make individuals liable for amounts owed to HMRC in “certain circumstances involving insolvency or potential insolvency”. A separate VAT personal liability notice under the current penalty code is about the company’s penalty, not automatically the VAT bill itself, because HMRC says “the penalty is always assessed on the company”. Directors should treat repeated insolvency, deliberate non-payment and failure to notify as the danger zone.

Did the National Trading Standards rent-to-rent consultation lead to any new rules?

The National Trading Standards rent-to-rent consultation did not itself create binding new rent-to-rent compliance rules; the major superior-landlord RRO change came from the Renters’ Rights Act, not from that consultation. The consultation was framed as evidence gathering on compliance with existing letting-agency laws, with Propertymark describing it as produced to help NTSELAT gather evidence on rent-to-rent and guaranteed-rent schemes “in terms of their compliance with existing regulations”. NTSELAT’s statutory role is to issue guidance to enforcement authorities under the Tenant Fees Act framework, not to legislate new primary rent-to-rent duties. The concrete change operators now need to evidence is separate: the Renters’ Rights Act explanatory notes say section 40 was replaced so the Tribunal can make an RRO against a landlord and “also any superior landlord”, which is new. In England that matters from 1 May 2026; Wales has separate enforcement arrangements and is not governed by the NTSELAT Tenant Fees Act lead-authority process in the same way.

Last reviewed August 2026.

Sources

• Housing Act 2004 s.72 — “(a)any person having control of or managing the HMO, and” Source
• Housing Act 2004 s.72 — “(b)any person who as landlord under a tenancy or licensor under a licence to occupy has an estate or interest in, or a right in relation to, the HMO that is superior (whether directly or indirectly) to the estate, interest or right of any person within subsection (1A).” Source
• Housing Act 2004 s.72 — “(4C)For the purposes of subsection (4B), a term in the tenancy agreement or licence to occupy relating to the occupation of the building or part of the building that is an HMO does not on its own constitute a defence under any of paragraphs (a) to (c) of that subsection.” Source
• Housing Act 2004 s.263 — “(1)In this Act “person having control”, in relation to premises, means (unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent.” Source
• Housing (Scotland) Act 2006 s.154 — “(1)The owner of an HMO which requires to be licensed under this Part commits an offence if the HMO is not so licensed (unless the owner has a reasonable excuse for not holding an HMO licence).” Source
• Housing (Scotland) Act 2006 s.129 — “(1)An application to a local authority for an HMO licence may be made only by an owner of the living accommodation concerned.” Source
• Houses in Multiple Occupation Act (Northern Ireland) 2016 s.8 — “(1) An application for an HMO licence is to be made to the council by the owner of the living accommodation in question.” Source
• Houses in Multiple Occupation Act (Northern Ireland) 2016 s.30 — “(1) The owner of an HMO commits an offence if—” Source
• Kaszowska v White [2022] UKUT 11 (LC) — “The only person against whom section 40(2) permits a rent repayment order to be made is a landlord.” Source
• Rakusen v Jepsen [2023] UKSC judgment — “An RRO cannot be made against a superior landlord.” Source
• Housing and Planning Act 2016 s.40 — “(b)any superior landlord in relation to such a tenancy.” Source
• Housing and Planning Act 2016 s.51A — “(2)That person, as well as the body corporate, is treated for the purposes of this Chapter as having committed the offence.” Source
• Housing and Planning Act 2016 s.51A — “(3)In this Chapter a reference to the landlord includes that person.” Source
• Renters’ Rights Act 2025 commencement regulations, regulation 11 — “(a)in relation to an offence committed before 1st May 2026; or” Source
• GOV.UK rent repayment orders guidance for tenants — “If this is the case, you should name the director(s), manager(s) or senior officer(s) of that company as the respondents, as well as the company.” Source
• Rakusen v Jepsen [2023] UKSC judgment — “They were originally introduced in relation to the non-licensing of houses in multiple occupation (or subject to a selective licencing scheme) by the Housing Act 2004 (“the 2004 Act”) but are now governed in England (but not Wales) by Chapter 4 of Part 2 of the Housing and Planning Act 2016 (“the 2016 Act”) under which they enjoy a greatly extended scope.” Source
• Housing (Scotland) Act 2006 s.144 — “Revocation of an order under subsection (1) does not make any person liable to pay any rent or sums which that person would, but for the order, have been liable to pay under the tenancy or occupancy arrangement concerned while the order had effect.” Source
• HMRC Debt Management and Banking Manual DMBM531030 — “For limited companies, the directors are not responsible for the debt because they have limited liability.” Source
• Finance Act 2020 s.100 — “Schedule 13 makes provision for individuals to be jointly and severally liable, in certain circumstances involving insolvency or potential insolvency, for amounts payable to the Commissioners for Her Majesty's Revenue and Customs by bodies corporate or unincorporate.” Source
• GOV.UK joint and several liability notices guidance — “However, the outstanding VAT amounts of both Tea Ltd and Café Ltd relate to tax periods ending after 22 July 2020 and so HMRC can take these insolvencies into account.” Source
• HMRC Compliance Handbook CH98550 — “It is important to note however that the penalty is always assessed on the company because it is the company who has committed the wrongdoing.” Source
• Propertymark response to NTSELAT consultation — “This consultation has been produced to help the NTSELAT gather opinions and evidence of Rent to Rent and Rent Guaranteed Schemes in terms of their compliance with existing regulations.” Source
• Tenant Fees Act 2019 s.25 — “It is the duty of the lead enforcement authority to issue guidance to enforcement authorities about the exercise of their functions under this Act.” Source
• Renters’ Rights Act 2025 explanatory notes — “Subsection (2) replaces section 40, subsections (1) and (2) of the HPA 2016 to provide that the Tribunal has power to make a rent repayment order against a landlord for certain offences (which was already the case under section 40) and also any superior landlord, under the tenancy in question (which is new).” Source
• National Trading Standards 2025 Strategic Assessment — “There are separate enforcement arrangements in Wales.” Source