Flat 1 24 Hamilton Drive Nottingham NG7 1DF BIR/00FY/HMK/2019/0072

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case No BIR/00FY/HMK/2019/0072

Between

Mr Rokas DeliviciusApplicant

Mr John Landa t/a HillcrestRespondent

Before

Graham Freckelton FRICS (Chairman)

Mr P Wilson BSC (Hons) LLB MRICS MCEIH

CEnvH

Mrs K Bentley

None for the Applicant

Howes Percival for the Respondent

Date 31 January 2020

Type of application: Application under sections 40, 41(1), 43 & 44 of the Housing and Planning Act 2016 for rent repayment orders

DECISION

[37]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 79(1) of the 2004 Act in that at the relevant time he was a person who controlled or managed a property that was required to be licensed 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 95(1) of the 2004 Act

[38]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 95(1) of the 2004 Act.

[39]Throughout the period from 1st August 2018 to 31st July 2019 the subject property was subject to mandatory Selective Licensing.(i) The subject property was not licensed.

(ii) 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 relevant 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 to the Tribunal (4th October 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 95(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 the Applicant claims rent of £7,140.00, the Tribunal has only been sent evidence of rent being paid for eleven months totalling £6,875.00. 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]Therefore, distilling the substance of those observations in this case the Tribunal determines that deductions should made from the maximum amount set out in paragraph 52. The reasons for this are: 1) The Tribunal is satisfied that the Applicant acted in an unsatisfactory manner by damaging the mixed automatic fire detection system which could have had serious consequences for all the occupiers of the building. 2) The Tribunal accepts the evidence of the Respondent regarding the conduct of the Applicant in respect of the damage to the automatic fire detection system. 3) Based on the evidence of its inspection the Tribunal accepts that the Respondent provides a high quality of accommodation within the building. The Tribunal also noted that the automatic fire detection system is of a high quality. 4) The Respondent has never been convicted of any offence.

[46]Although the Respondent has made no submission to the Tribunal in respect of his personal circumstances despite being instructed to do so (6(c) of the Directions dated 16th October 2019), he did, in his written submission reserve the right to make representations as to the terms of payment in the event of a rent repayment order being made. This is not accepted by the Tribunal which can only have regard to those matters placed before it at the time of its Determination.

[47]Although not strictly relevant to this decision the Tribunal is not surprised that the Respondent submits that he was not aware that the area was to be included in the City Council’s Selective Licencing Scheme. In order to make a designation that an area is subject to selective licensing a local housing authority has to consider that at least some conditions exist as described in paragraph 3. The Park Estate is a high quality private residential housing estate with many very substantial properties in a noted Conservation Area with distinctive features including gas street lighting. Little evidence of the conditions required for designation as a selective licensing area and typically associated with such areas was immediately apparent during the site inspection.

[48]In accordance with section 44(4)(a) of the 2016 Act, the Tribunal considered the conduct of the Applicant and Respondent. The Tribunal finds that there is evidence of conduct on the side of the Applicant in apparently deliberately damaging the fire detection system with potential implications for the safety of residents overall which would affect its decision. By the same token, the Tribunal noted the conduct of the Respondent who has acknowledged that it was his responsibility to obtain a licence and that his ignorance of the Selective Licencing scheme is not a valid excuse. This conduct is also a factor in the Tribunal’s decision.

[49]The Tribunal therefore determines that it will make a Rent Repayment Order for the Period 1st August 2018 – 31st July 2019 although this is reduced to 11 months in accordance with paragraph 42 above.

[50]In his Application, the Applicant enquires whether he can also obtain a repayment of the Service Charge of £30.00 per month paid to the Residents Association. The Tribunal determines that this amount does not form part of any repayment order as it is not received for the benefit of the Respondent but pays for services, provided by a third party which have been enjoyed by the Applicant.

[51]The calculation of the rent repayment order is therefore: Gross Monthly Rent: £625.00 per calendar month The Quantification of the rent repayment order is therefore: 11 Months’ rent @ £625.00 per month £6,875.00

[52]The Tribunal determined to reduce this amount by 50% to reflect the behaviour of the Applicant and by a further 25% to reflect the behaviour of the Respondent in this case.

[53]Therefore, the amount of the Rent Repayment Order is calculated as follows: Maximum amount of Rent Repayment Order 6,875.00 Less: Conduct of Applicant @ 50% 3,437.50 Conduct of Respondent @25% 1,718.75 £5,156.25 Total of Rent Repayment Order £1,718.75

[54]The Tribunal therefore confirms the total amount of the Rent Repayment Order of £1,718.75 Payment should be made in full within 28 days of the date of this decision. APPEAL

[55]Any appeal against this Decision must be made to the Upper Tribunal (Lands Chamber). Prior to making such an appeal an aggrieved party must apply in writing to the First-tier Tribunal for permission to appeal within 28 days of the date of this Decision specified above stating the grounds on which that party intend to rely in the appeal. Graham Freckelton FRICS Chairman First-tier Tribunal (Property Chamber) (Residential Property)