Miss Hannah Alice Hope BrownApplicantMr Sajjad AhmedRespondent
Before
Graham Freckelton FRICS (Chairman)Robert Chumley-Roberts MCIEH, J.PNone for the ApplicantNone for the RespondentDate 14 November 2019Hearing 2019-11-05Type of application: Application under sections 40, 41(1), 43 & 44 of the Housing and Planning Act 2016 for rent repayment orders
DECISION
[38]The Tribunal considered the application in four stages –(i) Whether the Tribunal was satisfied beyond reasonable doubt that the Respondent had committed an offence under section 72(1) of the 2004 Act in that at the relevant time he was a person who controlled or managed an HMO that was required to be licensed under Part 2 of the 2004 Act but was not so licensed.(ii) Whether the Applicant was entitled to apply to the Tribunal for a rent repayment order.(iii) Whether the Tribunal should exercise its discretion to make a rent repayment order.(iv) Determination of the amount of any order. Offence under section 72(1) of the 2004 Act[39]In accordance with sections 43(1) of the 2016 Act, the Tribunal was satisfied beyond reasonable doubt that the Respondent, as landlord of the subject property, had committed an offence listed in section 40 of the 2016 Act, namely an offence under section 72(1) of the 2004 Act. At no time did the Respondent admit that he had committed the offence.(i) Throughout the period from 1st October 2018 to mid-December 2019 the subject property was a house in multiple occupation subject to mandatory licensing.(ii) The subject property was not licensed.(iii) The Respondent was the person having control and/or managing the subject property. Entitlement of the Applicants to apply for rent repayment orders[40]The Tribunal determined that the Applicant was entitled to apply for a rent repayment order pursuant to section 41(1) of the 2016 Act. In accordance with section 41(2), the Respondent was committing the relevant offence throughout the period when the subject property was let to the Applicant; and the offence was committed in the period of 12 months ending with the day on which the application was made (5th August 2019). Discretion to make rent repayment orders[41]The Tribunal was satisfied that there was no ground on which it could be argued that it was not appropriate to make a rent repayment order in the circumstances of the present case. Amounts of Rent Repayment Orders[42]In accordance with section 44 of the 2016 Act, first, the amount of an order must relate to rent paid in a period, not exceeding 12 months during which the landlord was committing an offence under section 72(1) of the 2004 Act. The Applicants’ claim satisfies that condition. Second, the amount that the landlord is required to pay in respect of a period must not exceed the rent paid in respect of that period. Although not specified by the Applicant, the Tribunal calculates that the Applicant claims rent repayment of £922.00 as set out below in paragraph 52. The Tribunal determines that the relevant period commences on 1st October 2018 being the date the relevant legislation came into effect. On being questioned by the Tribunal the Applicant confirmed that on 16th December 2018 three of the tenants vacated the property. This was approximately one week after the party on December 8th. The Tribunal determined that after that date the property was not therefore an HMO and did not require to be licenced as there were only three tenants in occupation. Third, in determining the amount of any rent repayment order, the Tribunal must, in particular, take into account the conduct of the parties, the financial circumstances of the landlord and whether the landlord has been convicted of any of the offences listed in section 40 of the 2o16 Act.[43]The discretion afforded to the Tribunal at the final stage of the determination of the amount of any rent repayment order was considered by the Upper Tribunal (Lands Chamber) in Parker v Waller [2012] UKUT 301 (LC); and the observations of the President in that case have received express approval in subsequent decisions of the Upper Tribunal. Although those observations were made in the context of the rent repayment order regime contained in the 2004 Act, in the view of the Tribunal many of them remain relevant in the context of the 2016 Act regime.[44]The following observations, contained in paragraph 26 of the decision in Parker v Waller, would appear to be relevant in the present case – (iii) There is no presumption that the Rent Repayment Order (RRO) should be for the total amount received by the landlord during the relevant period unless there are good reasons why it should not be. The Residential Property Tribunal (RPT) [now the First-tier Tribunal (Property Chamber)] must take an overall view of the circumstances in determining what amount would be reasonable. (iv) [The 2004 Act] requires the RPT to take into account the total amount of rent received during any period during which it appears to it that the offence was being committed. It needs to do that because the RRO can only be made in respect of rent received during that period. It is limited to the period of 12 months ending with the date of the occupier’s application. But the RPT ought also to have regard to the total length of time during which the offence was being committed, because this bears upon the seriousness of the offence. (v) The fact that the tenant will have had the benefit of occupying the premises during the relevant period is not, in my judgment a material consideration or, if it is material, one to which any significant weight should be attached. This is because it is of the essence of an occupier’s RRO that the rent should be repaid in respect of a period of his occupation. While the tenant might be viewed as the fortunate beneficiary of the sanction that is imposed on the landlord, it is only misconduct on his part that would in my view justify the reduction of a repayment amount that was otherwise reasonable. (vi) Payments made as part of the rent for utility services count as part of the periodical payments in respect of which an RRO may be made. But since the landlord will not himself have benefited from these, it would only be in the most serious case that they should be included in the RRO. (vii) [The Act] requires the RPT to take account of the conduct and financial circumstances of the landlord. The circumstances in which the offence was committed are always likely to be material. A deliberate flouting of the requirement to register will obviously merit a larger RRO than instances of inadvertence – although all HMO landlords ought to know the law. A landlord who is engaged professionally in letting is likely to be more harshly dealt with than the non-professional.[45]However, distilling the substance of those observations in this case the Tribunal determines that no deductions should made from the maximum amounts set out in paragraph 39. The reasons for this are: 1) The Respondent has made no submissions to the Tribunal in respect of any expenses or his personal circumstances despite being instructed to do so in the Tribunal’s Directions. 2) The Tribunal is satisfied on the balance of probability that the Respondent has acted in an unsatisfactory manner with regard to his unannounced inspections of the property and his attitude towards the Applicant (as well as the other tenants). 3) The Tribunal accepts that the Applicant was threatened with eviction by the Respondent. The Tribunal also accepts the Applicant’s submission that the reason formal Notices were not issued was due to the fact that the Respondent was aware that he was operating an unlicensed HMO and it is quite likely that he would be unable to obtain possession if the matter went to Court. 4) The Tribunal accepts that the deposit paid by the Applicant was not held in an approved Tenant Deposit Scheme.[46]The Tribunal infers from the submissions that the Respondent rented the property as a single unit and it would appear that he made a profit by sub-letting individual rooms. However, no submissions were made as to the amount of rent paid by the Applicant to his superior landlord and the Tribunal is therefore unable to assess the amount of any potential deduction. However, in view of the way in which the Respondent has acted in the conduct of his responsibilities as landlord the Tribunal would not consider a deduction to be appropriate in this case.[47]Although the Respondent submits that he is no longer living in the UK, this was disputed by the Applicant at the hearing and it is apparent to the Tribunal that despite his assertions, he has been able to see the correspondence that the Tribunal sent to him.[48]In accordance with section 44(4)(a) of the 2016 Act, the Tribunal considered the conduct of the landlord and tenant. The Tribunal finds that there is no evidence of conduct on the side of the Applicant which would affect its decision.[49]However, the conduct of the Respondent leaves much to be desired for the reasons noted in paragraph 45 above. In addition to this the letter from Derby City Council makes it quite clear that they wrote to the owner of the property on 13th November 2018 informing him that an HMO Licence was required. The Respondent submits that he never owned the property but that does not absolve him of his responsibility to obtain a Licence as he was the ‘person who controlled or managed an HMO that was required to be licenced under Part 2 of the 2004 Act but was not so licenced’.[50]The Tribunal accepts the evidence of the Applicant that she was harassed by the Respondent. The copy text messages provide proof of the Respondent’s unacceptable behaviour to the satisfaction of the Tribunal and the only submission from the Respondent appears to be that the Applicant ‘is lying’.[51]The Tribunal therefore determines that it will make a Rent Repayment Order for the Period 1st October 2018 – 16th December 2018.[52]The calculation of the rent repayment order is therefore: Gross Monthly Rent: £365.00 per calendar month Gross Daily Rent: £365.00 x 12 = £4380.00 pa ÷ 365 = £12.00 per day The Quantification of the rent repayment order is therefore: 2 Months’ rent @ £365.00 per month £730.00 16 days rent @ £12.00 per day £192.00 Total £922.00[53]The Tribunal therefore confirms the total amount of the Rent Repayment Order of £922.00. Payment should be made in full within 28 days of the date of this decision.[54]During the hearing it was confirmed by the Tribunal that under Section 49 of the Act a local authority may help a tenant seeking a rent repayment order. APPLICATION UNDER RULE 13(2)[55]At the hearing the Applicant verbally submitted to the Tribunal an Application under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 requesting reimbursement of £300.00, being the Application and Hearing Fee paid.[56]At the hearing the Applicant submitted that she had not requested a hearing on her Application Form but that the Tribunal determined that the matter could not be dealt with as a paper determination and that a Hearing had to be arranged. This had cost the Applicant an additional £200.00 which she had struggled to find. At the same time the behaviour of the Respondent had been upsetting and had he obtained an HMO Licence she would not have had to pursue him for the rent repayment order.[57]After careful consideration the Tribunal determined that it was just and equitable that the Application Fee of £100.00 and the Hearing Fee of £200.00 should be reimbursed to the Applicant. The Respondent shall, within 14 days reimburse the Applicant the sum of £300.00 being the Application Fee and Hearing Fee paid in relation to this Application. APPEAL[58]Any appeal against this Decision must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal an aggrieved part must apply in writing to the First-tier Tribunal for permission to appeal within 28 days of the date specified below stating the grounds on which that party intend to rely in the appeal. Graham Freckelton FRICS Chairman First-tier Tribunal (Property Chamber) (Residential Property)