Superior Landlord Liability — The Rakusen Loophole Closed on 1 May 2026

If you are a freeholder, head lessee, or rent-to-rent principal who sits above the tenant’s immediate landlord, you are now personally exposed to civil penalties of up to £40,000, unlimited fines on conviction, and Rent Repayment Orders of up to 24 months for housing offences in the chain below you.

New — Active Since 1 May 2026

The Supreme Court decision in Rakusen v Jepsen (2023) used to protect superior landlords from direct enforcement. The Renters’ Rights Act 2025 commencement on 1 May 2026 reversed that. Councils and tenants can now name you directly in penalty notices, prosecutions and RRO applications.

What is a “superior landlord”?

A superior landlord is anyone who sits above the tenant’s immediate landlord in the leasehold chain. In plain English, that’s usually one of three people:

Freeholder

You own the freehold of a building that has been let on long leases to one or more leaseholders, who in turn let to tenants.

Head lessee

You hold a long lease over a property and have sub-let to an intermediate landlord who then lets to the actual occupants.

Rent-to-rent principal

You let your property to a company or individual on a fixed rent — and that party sub-lets the rooms or unit to the tenants who live there.

What changed on 1 May 2026?

Before 1 May 2026

The Supreme Court’s 2023 ruling in Rakusen v Jepsen held that Rent Repayment Orders could only be made against the immediate landlord — the person on the tenancy agreement. If a rent-to-rent company committed a housing offence, the freeholder or head lessee was largely insulated.

After 1 May 2026

The Renters’ Rights Act 2025 commencement closed that loophole. Superior landlords are now directly exposed to:

Civil penalties up to £40,000 per offence per property
Unlimited fines on conviction
Rent Repayment Orders of up to 24 months rent
Personal naming in council enforcement records and prosecutions

How this is different from the RRO doubling

The Renters’ Rights Act delivered two distinct changes that are easy to confuse:

RRO doubling (12 → 24 months)

Changes the maximum award a tribunal can grant in any single Rent Repayment Order. Use our RRO calculator to estimate exposure.

Superior-landlord exposure (this page)

Changes who can be pursued. Even a 24-month RRO is useless to a tenant if it can only target a dissolved rent-to-rent company. Now it can target you.

Am I a superior landlord at risk?

Four quick questions to find out where you sit on the exposure curve.

1
Do you sit above another landlord in the chain? (Freeholder of a let-out building, head lessee who has sub-let, or rent-to-rent principal)

Frequently asked questions

What is a 'superior landlord'?

A superior landlord is anyone who sits above the tenant's immediate landlord in the leasehold chain. The most common forms are: (1) the freeholder of a building let on long leases; (2) a head lessee who has sub-let to an intermediate landlord; (3) a rent-to-rent operator's principal — i.e. the owner who let the property to a company that sub-lets to tenants. If your tenant has signed a contract with someone else, but you are higher up the chain, you may still be a superior landlord.

What changed on 1 May 2026?

Until 1 May 2026, the Supreme Court decision in Rakusen v Jepsen (2023) meant Rent Repayment Orders could only be made against the immediate landlord — protecting superior landlords from tenant-driven claims. The Renters' Rights Act 2025 commencement on 1 May 2026 closed that loophole. Superior landlords are now exposed to civil penalties of up to £40,000, unlimited fines on conviction, and Rent Repayment Orders of up to 24 months — for housing offences in properties they sit above in the chain.

How is this different from the Rent Repayment Order doubling?

The RRO doubling (12 months → 24 months) is a change to the maximum award amount. The superior-landlord change is about who can be pursued in the first place. Before 1 May 2026, even a 24-month RRO could only target the immediate landlord. Now, freeholders, head lessees and rent-to-rent principals can be named directly in civil penalty notices, prosecutions, and RRO applications.

Does this apply to me if my tenant has a contract with a company?

Quite possibly. If you let your property to a 'rent-to-rent' company that then sub-lets to occupiers, you are typically the superior landlord. Before 1 May 2026, enforcement focused on the company. After 1 May 2026, councils and tenants can pursue you directly if the property is unlicensed, lacks safety certificates, or breaches HMO standards.

What should superior landlords do now?

Audit every property in your portfolio where you do not have a direct tenant: confirm the immediate landlord holds the right licences (selective, additional HMO, mandatory HMO), holds a valid gas safety certificate, valid EICR, valid EPC, and a fire risk assessment if HMO. Request copies in writing. Build a paper trail. If you cannot evidence compliance, treat it as a £40,000-per-property risk.

Is rent-to-rent still legal?

Yes — rent-to-rent arrangements remain legal. The change is enforcement exposure, not legality. But the economics shift: where previously the rent-to-rent company absorbed all enforcement risk, now the head landlord shares that risk. Most professionally written head leases will need updating to reflect the new liability split.

Primary sources

This page is information, not legal advice. Verify the position for your specific portfolio with a qualified housing solicitor.

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The starter compliance pack covers every certificate councils ask for: EICR, gas safety, fire risk assessment, EPC and licensing checks. Quote it once for every property you sit above.

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