This idea is important because it could help stop the state spending a disproportionate amount of money on a well intentioned idea to prevent people living bad housing, but which actually puts a disincentive on rent paying tenants, to reporting an unlicenced HMO early.
Under the Housing Act 2004, tenants can claim back rent paid if they were living in an un-licenced HMO. This is a dis-incentive to reporting an un registered HMO landlord – the longer they live there, the more rent they'd get back. The process of trying to prove this through the courts probably costs a lot more than the state would get back through a housing benefit refund, if the rent had been paid by housing benefit. There is already recourse to court for tenants who have suffered due to poor accommodation, and there is already a fine for those operating un-licenced HMO's. Has this part of the law ever actually been used?