Mr N Kaisdis and Mrs K PankowskaApplicantMr C MessomRespondent
Before
Judge M K GandhamMr A McMurdo MCIEHJustice for Tenants for the ApplicantMiss S Dunnett for the RespondentDate 3 August 2023Property: 64 Querneby Road, Nottingham, NG3 5HYType of application: Application under section 41(1) of the Housing and Planning Act 2016 for a rent repayment order
DECISION
[1]The Tribunal orders Mr Christopher Messom (‘the Respondent’) to repay to Mr Nikolaos Kaisidis and Mrs Karolina Pankowska (‘the Applicants’) rent in the sum of £1,127.[2]The Tribunal orders, under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013, that the Respondent reimburse to the Applicants the sum of £300 (comprising their tribunal application fee and hearing fee).
REASONS
[3]By an application received by the Tribunal on 13 December 2022, Mr Nikolaos Kaisidis applied for a rent repayment order (‘RRO’) under section 41(1) of the Housing and Planning Act 2016 (‘the Act’). On 11 January 2023, Mrs Karolina Pankowska (Mr Kaisidis’ wife) applied to be joined as an applicant to the proceedings.[4]The order sought by the Applicants was in respect of rent that they had paid as joint tenants of the property known as 64 Querneby Road, Nottingham, NG3 5HY (‘the Property’) to the Respondent, who was their landlord and owner of the freehold of the Property.[5]The Tribunal issued directions on 17 January 2023 and further instructions for the parties regarding submissions on 30 March 2023. In accordance with the same the Tribunal received, from the Applicants, a bundle of documents on 22 February 2023 and a hearing bundle on 14 April 2023 and, from the Respondent, a hearing bundle on 7 March 2023 and a Supplementary Statement of Case on 28 April 2023.[6]An inspection of the Property was arranged for 18 May 2023, with a hearing thereafter at Nottingham Justice Centre. Two days prior to the hearing the Applicants’ representative, Justice For Tenants (‘JFT’), made an application to the Tribunal to request a Greek language interpreter for the hearing for Mr Kaisidis. The Respondent objected to the request as he stated that Mr Kaisidis spoke fluent English and that he was required to have “excellent verbal communication skills” for his employment as a Civil Enforcement Officer for Nottingham City Council (‘the Council’).[7]The Tribunal noted that JFT had been authorised to act on behalf of the Applicants since the beginning of March 2023 and had provided to the Tribunal, with the hearing bundle, witness statements from both Applicants. The Tribunal considered that, not only was the request very late, but that had Mr Kaisidis’ English language skills been so limited that he was not able to participate in the proceedings without an interpreter, then this would have been 3 discovered at the time of producing his statement. Accordingly, the request was refused. At the hearing, the Tribunal was satisfied that Mr Kaisidis was able to fully participate in the proceedings.[8]Following the hearing, the Respondent forwarded to the Tribunal a copy of an Abatement Notice dated 4 October 2022 and an Electrical Installation Condition Report dated 30 May 2023, as requested by the Tribunal. The Tribunal reconvened to make its determination on 15 June 2023. The Law[9]Section 40 of the Act provides that an RRO is an order requiring the landlord under a tenancy of housing in England to repay an amount of rent which has been paid by a tenant. It confers power on the First-tier Tribunal (‘the FTT’) to make such an order in favour of a tenant where the landlord has committed an offence to which Chapter 4 of the Act applies.[10]The relevant offences are detailed in section 40(3) of the Act as follows: Act section general description of offence 1 Criminal Law Act 1977 section 6(1) violence for securing entry 2 Protection from Eviction Act 1977 section 1(2), (3) or (3A) eviction or harassment of occupiers 3 Housing Act 2004 section 30(1) failure to comply with improvement notice 4 section 32(1) failure to comply with prohibition order etc 5 section 72(1) control or management of unlicensed HMO 6 section 95(1) control or management of unlicensed house 7 This Act section 21 breach of banning order[11]Section 41 of the Act details the application process and provides: 41 Application for rent repayment order(1) A tenant … may apply to the First-tier Tribunal for a rent repayment order against a person who has committed an offence to which this Chapter applies.(2) A tenant may apply for a rent repayment order only if — (a) the offence relates to housing that, at the time of the offence, was let to the tenant, and (b) the offence was committed in the period of 12 months ending with the day on which the application is made. … 4[12]Sections 43 and 44 of the Act detail the power of the tribunal to make an order and the amount of that order and, in respect of an application by a tenant, provide: 43 Making of rent repayment order(1) The First-tier Tribunal may make a rent repayment order if satisfied, beyond reasonable doubt, that a landlord has committed an offence to which this Chapter applies (whether or not the landlord has been convicted).(2) A rent repayment order under this section may be made only on an application under section 41.(3) The amount of a rent repayment order under this section is to be determined in accordance with— (a) section 44 (where the application is made by a tenant); … 44 Amount of order: tenants (1) Where the First-tier Tribunal decides to make a rent repayment order under section 43 in favour of a tenant, the amount is to be determined in accordance with this section. (2) The amount must relate to rent paid during the period mentioned in the table. (3) The amount that the landlord may be required to repay in respect of a period must not exceed— (a) the rent paid in respect of that period, less (b) any relevant award of universal credit paid (to any person) in respect of rent under the tenancy during that period.(4) In determining the amount the tribunal must, in particular, take into account— (a) the conduct of the landlord and the tenant, (b) the financial circumstances of the landlord, and (c) whether the landlord has at any time been convicted of an offence to which this Chapter applies. If the order is made on the ground that the landlord has committed the amount must relate to rent paid by the tenant in respect of an offence mentioned in row 1 or 2 of the table in section 40(3) the period of 12 months ending with the date of the offence an offence mentioned in row 3, 4, 5, 6 or 7 of the table in section 40(3) a period, not exceeding 12 months, during which the landlord was committing the offence 5 Inspection[13]The Tribunal inspected the Property on 18 May 2023, in the presence of Miss Sally Dunnett (the Respondent’s Representative). The Applicants did not attend and were not represented.[14]The Property is a two storey, semi-detached house of brick construction with a pitched tiled roof. To the ground floor there is an entrance hall, leading to a lounge and kitchen/diner to the rear. The first floor comprises two double bedrooms and a bathroom. French doors from the kitchen give access to the rear garden, although the garden can also be accessed via a gated passageway to the side of the house.[15]At the time of the inspection, the Property was being redecorated. The Property had also been updated with new carpets and blinds, a new bathroom sink and new decking and fencing in the rear garden. Miss Dunnett confirmed that all other features, including the boiler, electrical consumer unit and doors, remained the same.[16]The Property had the benefit of gas central heating (via a combi boiler located in the kitchen), double glazed windows and a hard-wired, inter-linked smoke alarm.[17]In addition to the inspection, the Tribunal had the benefit of photographs of the Property taken by HoldenCopley estate agents for the purpose of marketing the Property in April 2022. These were taken whilst the Applicants were still in occupation and prior to the refurbishment that was taking place at the time of the inspection. Hearing[18]Following the inspection, a public hearing was held at Nottingham Justice Centre, Carrington Street, Nottingham, NG2 1EE. The Applicants attended and were represented by Mr Cameron Neilson from JFT. The Respondent was also in attendance, accompanied by Miss Dunnett.[19]Although in their written representations the Applicants had referred to a potential offence under the Protection from Eviction Act 1977, at the hearing Mr Neilson confirmed that the Applicants were no longer pursuing this argument. Matters agreed between the parties[20]The following matters were either agreed by the parties or were not in dispute: the Applicants’ tenancy began on 1 February 2014, by virtue of a six-month tenancy agreement; the Applicants remained in occupation of the Property, under a periodic tenancy, until they vacated the same on 22 October 2022; 6 the Applicants were responsible for the payment of all of the utilities and council tax under the terms of their tenancy agreement; although the tenancy agreement detailed the rent as £600 per month, the Applicants had paid, and the Respondent had received from them, a payment of £525 per month since 3 November 2021; during the twelve-month period between 23 October 2021 and 22 October 2022 the Respondent received a sum of £6,397.53 from the Applicants by way of rent; the amount of rent received during that period, less any relevant Universal Credit, was £3,757.63; the Property was subject to a selective licensing scheme which came into force on 1 August 2018; the Property had not been re-let since the Applicants had vacated the premises and the Respondent had not applied for a licence as he was planning to sell the Property; the Respondent did not raise any matters regarding his financial circumstances; and the Respondent had not been convicted nor had he received a financial penalty in respect of any offence detailed in section 40(3) of the Act. Matters in dispute between the parties[21]The following matters were in dispute: whether the Respondent had a reasonable excuse for not having a licence; the conduct of the Respondent; and the conduct of the Applicants. The Submissions Reasonable Excuse for Failure to Licence[22]The Respondent stated that he had a reasonable excuse for failing to license the Property as he had been completely unaware that a selective licensing scheme had come into force in Nottingham.[23]The Respondent stated that, although he was a qualified gas and electrical engineer, his business was in the renewable energy and biomass sector. He confirmed that the Property was his only rental property and that the Applicants had occupied the Property for seven out of the ten years that he had owned it. As such, he stated that he certainly could not be described as a professional or experienced landlord, having only let a single property to two separate tenants in the past ten years.[24]He confirmed that when he had originally let the Property to the Applicants this had been carried out through a professional managing agent, however, after the expiry of the initial term he began managing the Property himself at the request of the Applicants. 7[25]The Respondent stated that, as he did not live or work within the city, he had not received any notice regarding the introduction of the selective licensing scheme from the Council. He stated that the Council’s consultation procedure, a copy of which he had included within his Supplementary Statement of Case, made it clear that any consultation and engagement with landlords regarding the introduction of the scheme centred largely around those landlords living within the city.[26]In addition, he stated that, although the consultation referred to flyers being distributed with council tax bills, as the Applicants were responsible for the council tax he did not receive a flyer and the Applicants did not make him aware of the scheme either. The Respondent stated that he only became aware of the selective licensing scheme on 22 September 2022, after receiving a letter from the Council.[27]As the Council had failed to ensure that landlords living outside the boundaries of the scheme had been properly informed of its introduction, he stated that he had a reasonable excuse for his failure to licence the Property.[28]The Respondent confirmed that he had not applied for a licence since receiving the letter from the Council, as the Applicants had already given notice to quit the Property and he had no plans to re-let the Property prior to its sale. He did, however, note that he would have been eligible for temporary exemption from licensing during much of 2022, as the Property had been on the market for several months.[29]Mr Neilson, on behalf the Applicants, referred to the Upper Tribunal decision in Marigold v Ors [2023] UKUT 33 LC (‘Marigold’) which, citing the decision of the Upper Tribunal, Tax and Chancery Chamber in Perrin v HMRC [2018] UKUT 156 (TCC) (‘Perrin’), he stated provided a helpful framework for the defence of reasonable excuse.[30]Mr Nielson stated that, in paragraph 48, the Upper Tribunal referred to three steps which the FTT could use when deciding whether such a defence was established. Firstly, which facts gave rise to the defence, secondly, which of those facts were proven and, thirdly, whether, if viewed objectively, those proven facts did amount to a reasonable excuse for the default and when such excuse ceased. He stated that the Upper Tribunal also noted the comments in Perrin relating to it being a matter for the FTT to decide whether ignorance of the law was objectively reasonable in the circumstances of the case and for how long that ignorance could continue.[31]Mr Neilson submitted that the Respondent was an experienced landlord, as evidenced by the Applicants having been his tenants for a number of years, and noted that the Respondent’s only defence related to his ignorance of the law, which had continued for over three years.[32]Mr Neilson stated that at no point during those three years had Respondent taken any steps to make himself aware of his obligations as a landlord, such as becoming a member of a landlords’ association or consulting the Council, and 8 considered that his qualifications in engineering and his active involvement in the management of the Property meant that ignorance of the law was not a reasonable excuse.[33]Mr Neilson submitted that it was incumbent on the Respondent to keep abreast of his minimum legal obligations as a landlord and that his ignorance of the scheme over such a long period of time could not objectively be classed as a reasonable excuse for controlling an unlicensed Property. The Conduct of the Respondent[34]Mr Neilson confirmed that it was not in dispute that the Respondent had failed to obtain a licence for the Property. He stated that, although the Upper Tribunal in Williams v Parmar & Ors [2021] UKUT 244 (LC) (‘Williams’) referred to licensing breaches as having the potential to be less serious offences than other offences listed in section 40(3) of the Act, he submitted that this was if the failure to licence was all that was lacking. In this matter, he stated that there had been many other serious breaches of the Respondent’s duties as a landlord.[35]Mr Neilson stated that the Respondent had failed to provide a Gas Safety Certificate for the Property in 2021, that the Applicants had not received an Energy Performance Certificate (‘EPC’) or an Electrical Safety Certificate from the Respondent, that no firefighting equipment had been provided at the Property and that the Property had been in a substandard condition, with a number of items in want of repair and amounting to hazards under the Housing Health and Safety Rating System (‘HHSRS’).[36]In addition, the Applicants stated that they had encountered difficulties obtaining their deposit at the end of their tenancy and that the Respondent had been rude to Mrs Pankowska following the inspection of the Property by the Council’s Safer Housing Team at the end of September 2022, following a referral by her. They also stated that the Respondent had harassed Mrs Pankowska by contacting her employers – the Council’s Selective Licensing Department – which had affected her mental health.[37]The Respondent stated that any issues regarding the return of the tenancy deposit had occurred after the Applicants had already vacated the Property and that the matter had been resolved by an independent arbitrator. The Respondent denied being rude to Mrs Pankowska but did accept that he had been extremely upset at the referral to the Safer Housing Team as he considered that he had been a good landlord and that the Applicants had taken advantage of his good nature.[38]The Respondent referred the Tribunal to various telephone messages supplied within the bundle, which he stated evidenced that the relationship between himself and the Applicants had been amicable until September 2022. He also stated that the messages confirmed that he had tried to find an investor buyer for the Property, so that the Applicants would not need to move out, and had even removed the Property from the market in July 2022 to allow the Applicants the chance to find a new property to let. 9[39]In relation to contacting Mrs Pankowska’s employer, the Respondent stated that he had sent a query to a general email address asking whether Mrs Pankowska worked for the Selective Licensing Team at the Council and when she had commenced her employment. He did not consider that this amounted to harassment.[40]With regard to the lack of a Gas Safety Certificate in 2021, the Respondent stated that he seriously injured his hand in April 2021 and that he was suffering with severe anxiety from July 2021 (he provided a copy of his hospital consent form and his therapist’s details). The Respondent stated that he did discuss his situation with Mrs Pankowska and that, due to him not being able to attend the Property to carry out some repairs, he agreed that the Applicants could deduct £75 each month from the rent in order to cover the cost of any minor repairs that were required.[41]The Respondent stated that a Gas Safety Certificate had been obtained annually in the preceding years and that a Gas Safety Check had also been carried out on 11 October 2022, following the inspection by the Safer Housing Team in September 2022. He stated that the Gas Safety Certificate had been issued on that date without any repairs being required to the boiler.[42]The Respondent supplied a copy of an EPC for the Property, which was dated 30 January 2014, and stated that the Applicants would have been provided with the same by the managing agent at the beginning of their tenancy. In relation to the electrical report he stated that, although he could not find a copy of the previous report, there was reference to the engineer attending the Property within the text messages supplied. (The Respondent provided, following the hearing, a copy of a new Electrical Installation Condition Report carried out at the Property at the end of May 2023. This report confirmed that the electrical installation was in a ‘satisfactory’ condition, listing improvements but no faults.)[43]The Respondent confirmed that the Property had appropriate smoke detection alarms in place but that additional firefighting equipment was not required as it was not a House in Multiple Occupation (‘HMO’).[44]In relation to any items of disrepair at the Property, the Applicants had provided witness statements (together with a witness statement from their friend, Eftychia Konstantinidou) in their bundle and both parties gave oral evidence at the hearing as follows: Drains[45]The Applicants stated that the drains had become blocked twice during their occupation of the Property and that they were unable to use the bathroom facilities for a few days. On the first occasion, the Applicants arranged for ClearFirst to attend the Property to clear the blockage, which they paid for deducting the money from the following month’s rent, and on the second occasion Severn Trent cleared the blockage free of charge. 10[46]The Respondent stated that the invoice from ClearFirst (which was included within the Applicants’ bundle) indicated that the company had informed the Applicants that the drain was “fine”, however, the Applicants had insisted the drain be cleared as soon as possible. As such the Respondent stated that this had been an unnecessary expense for which he had borne the cost. Roof tiles[47]The Applicants stated that the neighbours had complained as some tiles had fallen from the roof in the windy weather, almost hitting their car. The Applicants stated that they were not aware of any water ingress into the Property as a result of the fallen tiles.[48]The Respondent stated that roof tiles falling was not unusual in extreme winds and that he had not found any water penetration in the loft as a result of the same. He also stated that he not been contacted by the neighbours at all, or their insurance company, regarding the tiles or damage suffered to their vehicle. Patio Doors[49]The Applicants referred to the patio doors as being “very big” and difficult to open and close. They had detailed this as an item of disrepair in their referral questionnaire to the Safer Housing Team (‘the Questionnaire’).[50]The Respondent stated that the patio doors were of a standard size and that the hinges occasionally needed adjusting over time. He stated that he had attended the Property to do this once but had not been informed of any other issues. Front Door[51]The Applicants referred to difficulties in being able to close the front door due to it being a wooden door which was liable to expand and shrink during the summer and winter months. They stated that, on one occasion, they were unable to open the door for several days and had to enter and exit the Property through the side passageway. They also referred to water ingress from around the doorframe. The Applicants could not explain why they had not reported this as an item of disrepair in the Questionnaire, although they stated that it was pointed out to Compliance Officer when he attended to carry out the inspection in September 2022.[52]The Respondent confirmed that the Applicants had informed him of difficulties with the front door and that he had considered replacing the same. After inspecting the door, he found that he it did not require replacing and, instead, he was able to rectify the problems by planing the sides and adding new seals. Patio Decking[53]The Applicants stated that they had tried to maintain the decking themselves but that the planks had become rotten and that one of their friends had even injured themselves whilst walking on the decking. They stated that 60% of the 11 panels were either rotten or uneven. Again, the Applicants could not explain why they had not reported this as an item of disrepair in the Questionnaire but stated that they had pointed out the decking to the Compliance Officer during the September inspection.[54]The Respondent stated that he had made some minor repairs to the decking but that it did not require replacing during the tenancy and was certainly not dangerous. He stated that the photographs taken by HoldenCopley in April 2022 included a photograph of the decking and that an email from them included within his bundle confirmed that the decking looked in “average order” and “safe… to conduct viewings”. The Respondent confirmed that the decking had since been replaced as the Applicants had failed to maintain the garden, as required under the tenancy agreement, and that this had led to the left-hand fence in the garden becoming rotten and in need of replacement. As such, he stated that he decided to replace the decking to match the new fence. Guttering[55]The Applicants stated that the Respondent had taken approximately a year to replace guttering at the side of the Property, which had been reported to him in 2017/2018. The Applicants stated that the external leak had caused cracking to paint in the corner of the bathroom wall.[56]The Respondent denied that it had taken more than a few weeks to fix the guttering and disputed that there had been any damage to the inside of the Property as a result of the same, as he had not been asked to carry out any repairs to the bathroom. Mould[57]The Applicants stated that, despite them keeping the Property well ventilated, there had been mould growth in both bedrooms, in the bathroom and by the bay window in the living room. The Applicants had supplied three photographs within their bundle and had referred to mould growth in the Questionnaire.[58]The Respondent stated that HoldenCopley had not mentioned any issues with mould when carrying out their viewings of the Property and that he had not been forwarded any photographs of any mould growth at the Property prior to September 2022. He stated that the photographs supplied showed some isolated growth but that the mould appeared to be due to the build-up of humidity, likely caused by the Applicants drying their clothes in the Property. The Respondent also pointed out that he had not received any correspondence following the Safer Housing Team’s inspection referring to any issues relating to mould or damp at the Property. Water Leak[59]The Applicants stated that there had been a major water leak at the Property with water leaking through one of the spotlights in the kitchen (they had supplied photographs and a video of the incident). The Applicants stated that 12 this was a serious safety concern, particularly as their 12-year-old son was living at the Property. Although the Applicants originally stated that it took several weeks for the Respondent to attend the Property to inspect the leak and a further four weeks for him to repair the problem, they then stated that the leak had continued for a number of months.[60]The Respondent denied that it had taken him several months to repair the leak and stated that he attended the Property within 24 hours of the leak through the spotlight. He recalled that there had been two major leaks at the Property whilst the tenants were in occupation, one having been caused by the Applicants’ son blocking the sink with a piece of Lego and the second due to a mains water pipe leak. He stated that the repairs were carried out in a timely manner, with the ceilings being plastered and repainted. The Respondent also stated that there was no risk of any electrical shock as all of the circuits in the Property were protected by RCDs. Boiler[61]The Applicants stated that they had always encountered issues with regard to the water pressure from the boiler and that the Respondent, rather than replacing the aging boiler, carried out minor repairs which resulted in the problems recurring. The Applicants stated that, in December, the boiler stopped working altogether and that the Applicants had resorted to going to the gym to have a shower and purchasing electrical radiators to warm the rooms.[62]The Respondent confirmed that he had carried out some repairs to the boiler during the tenancy. In March 2020, he stated that the boiler was not working properly and needed a new pressure vessel which was fitted and repaired. In July 2020, a new hot water/diverter valve was fitted and at the end of 2021, as the boiler was losing pressure, he showed the Applicants how to re-pressurise the same. The Respondent stated that he was qualified to carry out boiler repairs and that, although he would arrange for parts to be delivered to the Property for convenience, that he always paid for the same. Although the Respondent accepted that the Applicants had purchased two electric radiators when the boiler was not working, he stated that the cost of the same had been deducted from the rent.[63]The Respondent confirmed that the only correspondence he had received from the Safer Housing Team following their inspection in September 2022 had been an Abatement Notice in relation to intermittent lack of hot water to the Property. The Respondent stated that, although he disputed those findings, he arranged for a gas safety check in October 2022, which confirmed that the boiler was working and safe to use. He confirmed that the Safer Housing Team had closed their file as they were satisfied that the issue had been resolved. The Conduct of the Applicants[64]The Respondent stated that the Applicants had regularly been late with payment of the rent, which he said was evidenced in several text messages he had provided within the bundle. The Respondent also stated that the Applicants 13 were in breach of the tenancy agreement as they had failed to pay the last month’s rent in full.[65]The Respondent submitted that the Applicants would often carry out unauthorised works to the Property, deducting the costs from any rent which was due. The Respondent stated that, although at times he had agreed to the same, in July 2020 he informed the Applicants that they should no longer do this without contacting him for approval beforehand. Despite this, he stated that they called out a contractor to deal with some wasps in September 2021 without his prior consent.[66]The Respondent stated that Mrs Pankowska had also breached clause 11.8 of the tenancy agreement by working from home as a teacher. The Respondent stated that text messages appeared to confirm that she was arranging appointments to see students at the Property, which was not allowed under the terms of the tenancy agreement.[67]In relation to the reduction in rent of £75 a month from November 2021, the Respondent stated that it was clear that the Applicants had neither used this money to carry out any minor repairs to the Property, nor had they set aside a ‘kitty’ for any potential future repairs. Accordingly, the Respondent stated that the Applicants appeared to have used the same as a rent reduction, however, had failed to disclose this to the DWP and continued to receive Universal Credit based on monthly rental payments of £600 per month. The Respondent stated that this raised serious concerns regarding the Applicants’ credibility.[68]In addition, the Respondent questioned the timing of the Applicants reporting of the purported disrepair at the Property to the Safer Housing Team. The Respondent stated that the Property had always been in a good state of repair and that the referral appeared to have been made after the Applicants had found a new property to rent. The Respondent referred to text messages from the Applicants in May 2022, suggesting that they liked the Property and were reluctant to leave the same, which he stated was at odds with the statements that they had made to both the Safer Housing Team and to the Tribunal. The Respondent also highlighted that the only issue raised by the Council following the inspection related to the intermittent water supply.[69]Finally, the Respondent referred to email correspondence he had received from HoldenCopley regarding difficulties the agents had encountered in arranging viewings and comments that they stated Mrs Pankowska had made during viewings to potential buyers, which the Respondent believed had affected the sale.[70]Mr Neilson stated that although the Applicants accepted that they had made some late payments during the early years of the tenancy, the arrears were mostly resolved prior to the end of 2017 and that the Applicants had always remained in communication with the Respondent regarding the same. In relation to payment of the last month’s rent, he stated that this had been apportioned to the final day of occupation. 14[71]With regard to any unauthorised works, Mr Neilson stated that the Applicants refuted the suggestion that works were carried out without the Respondent’s consent. He stated that the Applicants were often told by the Respondent to deduct any expenses from the rent, which was evident in various text messages.[72]In relation to Mrs Pankowska working from home, Mr Neilson stated that Mrs Pankowska had been employed by a language school and that she had completed various online courses and carried out lessons online. As such, he stated that no trade, profession or business had been carried out at the premises and, consequently, there had been no breach of the tenancy agreement.[73]Mr Neilson noted that, despite the Respondent having stated that the Applicants were in breach of the terms of their tenancy agreement, the Respondent has failed to take any action at the time of the alleged breaches and appeared to have waived any rights in respect of the same.[74]With regard to the £75 deduction in the monthly payment to the Respondent, although the Applicants accepted that they had not informed the DWP of any rent reduction, Mr Neilson stated that any ‘kitty’ kept aside to carry out works could be considered by the Tribunal to be included within the rental liability of £600, being a sum which was “offset against rent”. He also pointed to the fact that the Applicants had only applied for an order in relation to the amount that they had actually paid to the Respondent.[75]In relation to the timing of the referral to the Safer Housing Team, the Applicants stated that they did not wish to make any complaints prior to vacating the Property, as they wanted to maintain an amicable relationship with the Respondent whilst living there. They stated that the referral was not carried out in revenge, but that they wished to speak out regarding the issues that they had faced whilst residing at the Property.[76]The Applicants also denied disrupting any viewings of the Property, stating that they had always ensured that the Property was clean and presentable prior to any viewings taking place and that the delay in their moving was caused by a crisis in the letting market at the time. Amount of the Order[77]Mr Neilson referred to the purpose of the Act as being to improve both the standard of housing and the compliance of legislation by landlords. He stated that RROs were one of the tools in the battle to improve housing conditions and referred to the four factors set out in guidance produced for local authorities when pursuing RROs – punishing offending landlords, deterring landlords from other offences, dissuading landlords from breaching the law and removing from landlords the financial benefit of offending.[78]Mr Neilson noted that the Upper Tribunal, in paragraph 43 of its decision in Williams, referred to those factors as clearly underlying the provisions of Chapter 4 of Part 2 of the Act generally. Accordingly, Mr Neilson submitted that the policy justified that, as a minimum, a substantial part of the rent received 15 by an operator of an unlicensed home should be awarded in an RRO, as such a landlord would have accrued a great deal of rental income without having to incur the substantial costs of compliance. Mr Neilson submitted that the Upper Tribunal also made it clear in its decision in Vadamalayan v Stewart [2020] UKUT 183 (LC) (‘Vadamalayan’) that not being a professional landlord was not a factor that should justify a deduction from a potential RRO.[79]Mr Neilson stated that in Acheampong v Roman [2022] UKUT 239 (‘Acheampong’) the Upper Tribunal had set out the factors the FTT needed to take into account when making an RRO. He stated that, in this matter, the amount of rent paid over the period was not in dispute and that there were no elements of that sum which represented payments for utilities which needed to be deducted.[80]Mr Neilson submitted that the failure to obtain a licence was a serious offence and in Aytan v Moore [2022] UKUT 027 (LC) (‘Ayton’), the Upper Tribunal accepted that the failure of the landlord to have proper processes in place for keeping up to date with licensing requirements was a factor to be taken into account when making an award.[81]Mr Neilson stated that the failure to licence was not the only factor in this matter, as the Property had serious deficiencies and the Respondent had failed to comply with other housing obligations. As such, he submitted that the amount ordered should be substantially more than the 45% awarded by the Upper Tribunal in Dowd v Martins [2022] UKUT 249 (LC) (‘Dowd’), and that an award of 85% seemed appropriate taking into account all of the circumstances of the case.[82]Mr Neilson stated that the Respondent had failed to show that that there had been any serious issues with regard to the Applicants’ conduct – there were no rental arrears, the Respondent had waived any potential breaches of the tenancy agreement and there was insufficient evidence to bring into question the credibility or otherwise of the Applicants’ statements. In addition, the Respondent had not suggested that there were any financial circumstances that needed to be taken into account by the Tribunal. Accordingly, Mr Neilson submitted that there was no reason to depart from an award of 85%.[83]With regard to costs, Mr Neilson requested that the Tribunal make an order under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013, as he submitted that, if an RRO was made, it would be appropriate for the Applicants to be reimbursed both their application fee and their hearing fee.[84]The Respondent submitted that if the Tribunal failed to accept that he had a reasonable excuse to the offence, that a significant reduction in the amount claimed was appropriate due to the Respondent’s good conduct throughout the tenancy and the questions raised regarding the credibility of the various statements which had been made by the Applicants. 16 The Tribunal’s Deliberations[85]In reaching its determination the Tribunal considered the relevant law, in addition to all of the evidence submitted by the parties briefly summarised above.[86]Prior to being able to make a rent repayment order under the Act, the Tribunal must be satisfied ‘beyond reasonable doubt’ (under section 43) that the Respondent had committed one or more of the offences referred to in section 40(3) of the Act.[87]The Tribunal is satisfied that the Respondent was the landlord and the person in control of the Property in accordance with section 263 of the Housing Act 2004 (‘the 2004 Act’).[88]Neither party disputed that the Property was subject to selective licensing, nor that it was without a licence between 1 August 2018 and 22 October 2022. Accordingly, the Tribunal is also satisfied that the Respondent was a person having control of a house which was required to be licensed under section 85(1) of the 2004 Act but which was not so licensed.[89]As such, the first question for the Tribunal was whether the Respondent had a reasonable excuse for committing an offence under section 95(1) of the 2004 Act. Reasonable Excuse for Failure to Licence[90]The Tribunal considered the guidance set out in Marigold when considering whether the Respondent had a reasonable excuse under section 95(4) of the 2004 Act. The Tribunal also noted that it was a matter for the Tribunal as to whether it was objectively reasonable for the Respondent to be ignorant of the law and, if so, for how long.[91]Based on the evidence before it, the Tribunal accepted that the Respondent could not reasonably be considered a professional landlord – the Property was the only house which he had let and the Applicants had been his only tenants for over seven years. The Tribunal also accepted that the Respondent’s failure to obtain a licence had been due to him being unaware of the Council’s selective licencing scheme. The question for the Tribunal was whether the Respondent’s ignorance of the scheme was objectively reasonable. The Tribunal found it was not.[92]The Tribunal carefully considered the Respondent’s submissions regarding the failure of the Council to inform landlords who did not live locally of the proposed licensing scheme, but found that it would have been completely impractical for the Council to administer a strategy to tackle this issue. It would have required the Council to discover which properties within the boundaries of the scheme were rented, who the landlords of those properties were, and then obliged the Council to contact each of those landlords individually. 17[93]The Tribunal found that it was, instead, incumbent on a landlord, professional or otherwise, to be aware of his obligations if he chose to rent a property. The Tribunal did not consider that the requirements of the law were particularly complex and, as the Respondent did not reside locally, he could have instructed agents to manage the Property for him, delegating compliance with any legal requirements to them. If he chose to manage the Property himself, he could have found an alternative way to ensure that he was aware of any new requirements, such as becoming a member of a local landlords’ association or keeping a regular check on any new requirements through the Council’s website.[94]As such, although the Tribunal did accept that the failure to licence was a genuine oversight, it found that the Respondent’s ignorance of the licensing scheme did not objectively amount to a reasonable excuse and that there was no defence for the offence he had committed under section 95(1) of the 2004 Act. Amount of the Order[95]The Tribunal found that it could make an RRO, having been satisfied that: an offence had been committed under section 95(1) of the 2004 Act between the dates of 23 October 2021 and 22 October 2022; that the offence had been committed within the twelve months preceding the date of the application (being 13 December 2022) and that, whilst the offence had been committed, the Applicants had paid rent to the Respondent.[96]Taking into account the guidance given by the Chamber President, The Hon Mr Justice Fancourt, in the Williams decision, the Tribunal noted that the correct approach when considering what amount of repayment order is reasonable in any given case was for the FTT to consider “what proportion of the maximum amount of rent paid in the relevant period, or reduction from that amount, or a combination of both, is appropriate in all the circumstances, bearing in mind the purpose of the legislative provisions”. The Tribunal also noted that the decision confirmed that the FTT should have particular regard to the conduct of both parties (including the seriousness of the offence committed as underlined in Acheampong), the financial circumstances of the landlord, whether the landlord had at any time been convicted of a relevant offence and “any other factors that appear to be relevant” [paragraph 50].[97]The maximum amount paid by the Applicants during the period of the offence, as agreed by the parties, was £3,757.63. As the Applicants had been responsible for all of the utilities, the Tribunal found that no deductions were required for the same.[98]In relation to the conduct of the Respondent, despite the submissions of Mr Neilson, the Tribunal found that based on recent Upper Tribunal decisions, most notably the decision in Hallett v Parker [2022] UKUT 165 (LC) (‘Hallett’), the failure to obtain a licence was not the most serious type of offence. The Tribunal also noted that in Hallett the offence related to an HMO licence, which the Tribunal considered was a potentially more serious offence than the failure 18 to control an unlicensed house due to the nature of the tenancies and higher risks, hence the more stringent management requirements with HMOs. The Tribunal did accept, however, that licensing requirements were necessary and that an order ought to be made to deter evasion.[99]There was no evidence to suggest that the Respondent had been convicted of any other offence and, as previously stated, the Tribunal accepted that the Respondent was not a professional landlord and that the Property was the only house which he let. The Tribunal also noted that the Respondent had not committed the offence deliberately and he had not applied for a licence as he no longer required one.[100]In addition, based on the evidence, the Tribunal found that the Respondent had generally acted fairly with the Applicants, allowing them to make up any rent arrears, to deduct expenses from rental payments and allowing them further time to find alternative housing after he had decided to place the Property on the market. The Tribunal found that raising a general query regarding Mrs Pankowska’s employment was insufficient evidence to suggest that Respondent had harassed Mrs Pankowska and that him being upset following the Safer Housing Team’s inspection was unsurprising considering the fairly amicable nature of his relationship with the Applicants up until that point.[101]The Tribunal noted that the Respondent had failed to provide a Gas Safety Certificate in 2021 and, although it accepted that the Respondent was having certain health issues at the time, considered that this should not have caused anything other than a minor delay in instructing a gas safe engineer. The Tribunal found that there was insufficient evidence to suggest that the Applicants had not been provided a copy of the EPC or any electrical safety certificate for the Property. The Tribunal also found that the Property did not require any firefighting equipment and that the smoke alarm system installed at the Property was perfectly sufficient.[102]With regard to the condition of the Property, the Tribunal found that many of the items the Applicants had referred to as being in disrepair were minor matters a person would likely encounter during a seven-year occupancy of a property, such as a blocked drain, a few roof tiles falling in extreme weather, patio doors needing adjusting, wooden doors needing slight alterations due to changes in the temperature and outside guttering requiring some attention.[103]The Tribunal also noted that the Applicants had stated that they had referred the Compliance Officer from the Safer Housing Team to look at the front door, the patio decking and the mould, during his inspection. The Tribunal considered that, as the Compliance Officer had not informed the Respondent of any works required in respect of the same, he must not have determined any of those items to be hazards. The Tribunal found that both the patio door and the front door appeared to be in a fair condition at the time of their inspection.[104]In relation to the leaks, the Tribunal found that the text messages appeared to suggest that the repairs took slightly longer than would generally have been expected, however, found that the time taken to carry out the repairs was more 19 likely to have been a few weeks, rather than a number of months, based on an email Mrs Pankowska had sent to the Safer Housing Team in September 2022 (which was included within the Applicants’ bundle of documents). The Tribunal also noted that the Property did have the benefit of RCDs and, as such, did not consider that any leak posed an electrical hazard.[105]With regard to the boiler, the Tribunal accepted the Applicants’ submissions that the boiler was fairly old, that it required re-pressurising and that there might have been some intermittent problems with the supply of hot water in September 2022, however, noted that it did pass the 2022 Gas Safety Certificate and that the Council had closed their file. As such, the Tribunal found that this was not indicative of a major deficiency.[106]Accordingly, the Tribunal found that there was insufficient evidence to suggest that the condition of the Property was such that it would not have received a licence had one been applied for, nor were there any other compelling factors, such as any fire safety concerns, which the Tribunal considered would have warranted a minimal reduction from the maximum amount payable.[107]Taking into account all of the above, the Tribunal considered that a 65% deduction in the maximum rent was appropriate.[108]With regard to the Applicants conduct, the Tribunal found that their past arrears, the potential breaches of the tenancy agreement and the deduction of expenses from the rent were not matters that it would take into account, as the Respondent had been aware of those actions at the relevant times and had failed to take any serious action.[109]The Tribunal also found that, following the email from HoldenCopley regarding Mrs Pankowska’s behaviour during the viewings, the Respondent had voluntarily removed the Property from the market in order to allow the Applicants a chance to find another property. The text messages at the time also appeared to indicate that their relationship was fairly good. As such, the Tribunal found that there was insufficient evidence to suggest that the Applicants had affected any sale of the Property.[110]The Tribunal did not consider that Mrs Pankowska’s employment within the Safer Housing Team was relevant, as this had not impacted on the failure of the Respondent to apply for a licence and, thus, the Applicants’ right to obtain an RRO. The Tribunal also found that there was insufficient evidence to suggest that the Applicants had made the referral to the Safer Housing Team as an act of revenge. The Tribunal did, however, consider that the timing of the referral was somewhat questionable, as messages that had been exchanged between the parties a few months prior had suggested that the Applicants liked the Property and would have been happy to stay if an investor buyer could have been found.[111]The Tribunal also had concerns regarding the Applicants’ credibility. There were several discrepancies regarding those items of disrepair referred to in the Statement of Case and those detailed in the Questionnaire, which the Tribunal found the Applicants had not adequately explained. In addition, there appeared 20 to have been a significant exaggeration of the potential risks from minor deficiencies, bearing in mind that the only notice issued by the Compliance Officer following his inspection had been an abatement notice with regard to the intermittent hot water from the boiler.[112]The Tribunal considered that exaggerations such as these should be taken into account when considering a tenant’s conduct or “any other factors that appear to be relevant”, as they could have a significant impact on the amount of any RRO awarded against a landlord.[113]In addition, the Tribunal had some concerns regarding the £75 allowance made by the Respondent, starting in November 2021. The Applicants contended that the deduction was not a reduction in the rent (so did not need to be disclosed to the DWP), however, they were unable to detail any minor works that had been carried out by them with those funds and they had not retained a ‘kitty’ in respect of any future works.[114]As such, taking into account the above, the Tribunal considered that a further deduction of 5% was appropriate.[115]As the Tribunal had no information to suggest that the Respondent’s financial circumstances should be taken into account, the Tribunal determined that a 70% deduction should be made from the rent to be repaid to the Applicants. Accordingly, the amount to be repaid is £1,127. Order under Rule 13[116]The Tribunal can, under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013, “make an order requiring a party to reimburse to any other party the whole or part of the amount of any fee paid by the other party…”. In this matter, the Applicants had paid an application fee of £100 and a hearing fee of £200.[117]Having found that the Respondent had committed an offence and had no reasonable excuse to do so, the Tribunal finds it appropriate to make an order under Rule 13(2) and orders the Respondent to reimburse to the Applicants the sum of £300. Appeal Provisions[118]If either party is dissatisfied with this decision they may apply to this Tribunal for permission to appeal to the Upper Tribunal (Lands Chamber). Any such application must be received within 28 days after these written reasons have been sent to the parties (Rule 52 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013). M K GANDHAM ………………………… Judge M K Gandham