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Tribunal judges have struck out 340 students' claims for rent repayment orders involving allegedly unlicensed purpose-built accommodation.
Lawyers for the students claimed their rooms and flats were houses in multiple occupation (HMOs), which the operator, Unite Students, should have licensed under Liverpool's selective licensing regulations.
However, First-Tier Property Tribunal Judges Neil Walsh and Jonathan Holbrook disagreed with this interpretation of the rules and dismissed the student claims, which could have cost Unite more than £1.3 million pounds in compensation if the firm had been found guilty of letting unlicensed shared accommodation.
Students pay between £100 and £144 per week for en-suite rooms and apartments. Many are 'cluster' flats with four to eight single-bedroom units and shared facilities, such as kitchens and living rooms.
Each student has exclusive use of a bedroom.
The tribunal was asked to decide whether cluster flats were HMOs that required licensing under the law or accommodation exempt from the legislation.
A preliminary hearing was arranged to discuss the cluster flat issue.
The judges ruled: "Cluster flats are not subject to selective licensing by reason of which it cannot be said that any of the cluster flats comprises a house which is required to be licensed within the law.
"In consequence, the respondents have not committed offences upon which rent repayment order applications may be based."
Unite Students is the UK's leading operator of student accommodation, housing around 70,000 students annually across 23 towns and cities, including 10 properties in Liverpool.
Solicitors have launched thousands of rent repayment order cases against Unite and other student accommodation providers, alleging they were letting unlicensed rooms and flats.
Providers are exempt from HMO licensing if they have signed up to a government-approved code, such as the ANUK/Unipol code.
Rent Repayment Orders are financial penalties that require landlords to repay up to 24 months' rent to tenants or local authorities if they commit specific housing offences. Common offences include unlawful eviction, harassing tenants, or operating an unlicensed HMO.