8 Shepherd House Arnold Road Nottingham NG5 5XA BIR/37UE/HMK/2019/0085

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case No BIR/37UE/HMK/2019/0085

Between

Ms C B A ZamoraApplicant

Mr A GandhiRespondent

Before

Mr G S Freckelton FRICS (Chairman)

Mr P Wilson BSC (Hons) LLB MRICS MCEIH

CEnvH

Mr J McGregor (Interpreter) for the Applicant

None for the Respondent

Date 2 April 2020

Hearing 2020-03-19

Type of application: Application under sections 40, 41, 43 and 44 of the Housing and Planning Act 2016 for a rent repayment order

DECISION

[39]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 a property that was required to be licensed under Parts 2 and 3 of the 2004 Act but was not so licensed.

(ii) Whether the Applicants were 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

[40]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. Throughout the period from 1st November 2018 until 31st October 2019 the subject property was a property subject to 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

[41]The Tribunal determined that the Applicants were 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 from 1st November 2018 to 31st October 2019. Discretion to make rent repayment orders

[42]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

[43]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’ claims satisfy 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. The Applicants claim for the period 1st November 2018 - 31st October 2019. 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.

[44]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.

[45]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 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.

[46]Distilling the substance of those observations and applying them to the facts of the present case, the Tribunal determines that various deductions should be made from the maximum amount as set out in paragraph 50.

[47]The Tribunal disregards any amount which the Respondent may have had to pay out in respect of his other properties as they have no bearing on this case. At the same time the Tribunal similarly disregards the comments of the Respondent regarding the letting of his properties for the same reason.

[48]In accordance with section 44(4)(a) of the 2016 Act, the Tribunal considered the conduct of both parties. The Tribunal finds that there is no evidence of conduct on the part of the Tenant (Applicant) which would affect its decision.

[49]Although not strictly relevant to this application as the matters referred to were not carried out after the application was made, the Tribunal noted the general conduct of the Landlord (Respondent). In particular the Tribunal notes: a) That he was slow in attending to repairs. b) That the Applicant’s Deposit was not initially protected. c) That he has been trying to unlawfully obtain possession.

[50]The Tribunal also took into consideration the following matters which are relevant to this determination: a) That he had no prior convictions or penalties. b) That he had accepted that he should have applied for a Selective Licence.

[51]The Tribunal determined that: 1) The annual ground rent of £110.00 should be deducted in assessing the amount of any rent repayment order. 2) The annual service charge of £1320.00 should be deducted in assessing the amount of any rent repayment order. 3) That the monthly interest only mortgage payments of £228.98 (£2,747.76 per annum) should be deducted in assessing the amount of any rent repayment order.

[52]Having regard to the above the Tribunal therefore determines as follows: Maximum Amount of rent repayment order 6270.00 Less: Ground Rent 110.00 Service Charge 1320.00 Mortgage payments 2747.76 Total 4177.76 Amount of Rent Repayment Order £2,092.24 Payment should be made in full within 28 days of the date of this decision.

[53]The Tribunal therefore confirms the total amount of the Rent Repayment Order in the sum of £2,092.24 (Two thousand and ninety-two pounds and twenty-four Pence).

[54]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 Licensing 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 one of six conditions exist as described in paragraph 2. The properties are modern (Valuation Office Agency records indicate they were completed in 2004) and 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. APPLICATION UNDER RULE 13(2)

[55]Although the Applicants, in their Application to the Tribunal did not submit an Application under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 requesting reimbursement of the Application Fee and Hearing Fee paid, this is a matter which the Tribunal can consider on its own initiative.

[56]After careful consideration the Tribunal determined that it would be just and equitable that the Application Fee of £100.00 and Hearing Fee of £200.00 should be reimbursed to the Applicants in this case.

[57]Payment of £300.00 should be made by the Respondent to the Applicant in full within 28 days of the date of this decision. APPEAL

[58]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 specified below stating the grounds on which that party intends to rely in the appeal. Date: 2nd April 2020 Graham Freckelton FRICS Chairman First-tier Tribunal (Property Chamber)