Bartosz Rutkowski (1) Leopold Wtorek (2) Arkadiusz Stachyra (3)ApplicantSusan WalkerRespondent
Before
Judge B MacQueenMr MillerIn Person Interpreter : Alicja Wota (Polish Interpreter) for the Applicantthe Respondent did not appear at the hearing and was not represented. for the RespondentDate 3 April 2024Property: 93 Ivy Road, Northampton, NN1 4QSType of application: Application for a rent repayment order by tenant. Sections 40, 41, 43 & 44 Housing and Planning Act 2016
DECISION
[1]The Tribunal finds that the Respondent has committed the offence of having control or management of an unlicensed house in multiple occupation (HMO) under the provisions of section 72(1) of the Housing Act 2004, which is an offence under section 40(3) of the Housing and Planning Act 2016. Accordingly, a rent repayment order in favour of the Applicants can be made. The Tribunal determines that a rent repayment order is made in favour of the Applicants as follows: Bartosz Rutkowski - £2,808 Leopold Wtorek - £3,224 Arkadiusz Stachyra - £3,224 This must be paid by the Respondent to the Applicants within 28 days of the date of this decision.[2]The Tribunal also orders the Respondent to reimburse each Applicant for the Tribunal fees in the total sum of £300 each. This amount must be paid by the Respondent to the Applicants within 28 days of the date of this decision. The Application[3]On 7 March 2023 the Applicants each made an application for a Rent Repayment Order (RRO) in relation to 93 Ivy Road, Northampton, NN1 4QS (the Property). The applications were made on the basis that the Property was a house in multiple occupation that was required to be licensed under section 72(1) Housing Act 2004, but the Property was not so licensed. Tribunal Directions[4]The Tribunal made Directions on 27 July 2023 which confirmed that the applications had been received by the Tribunal on 7 March 2023 and therefore, in order to be entitled to a RRO against the Respondent, the Applicants would need to prove that the Respondent was their landlord, that she had committed a relevant housing offence and that offence continued until at least 8 March 2022. The application form did not specify the period for which the RRO was being sought; however, the Directions stated that if the offence could be established beyond reasonable doubt, the amount of any RRO was likely to be limited to 12 months during which the offence was being committed (from the allegations made in the applications).[5]The Tribunal’s Directions of 27 July 2023 required parties to prepare a bundle of documents for use in determination of the application. 3 Unfortunately, whilst documents had been produced, these had not been produced in a paginated format. The Tribunal had a bundle of documents from the Applicants that included witness statements, bank statements and correspondence with Northampton Borough Council. The Tribunal also had a bundle of 29 documents from the Respondent which included a witness statement, email exchanges with Northampton Borough Council and bank statements. The Background[6]The Applicants were all tenants at the property and each confirmed that they had lived at the property as follows: Bartosz Rutowski was a tenant at the Property for the period of January 2019 until 11 March 2022, Leopold Wtorek was a tenant at the Property between March 2019 to 11 March 2022, and Arkadiusz Stachyra was a tenant at the Property during 2018 until 11 March 2022. There was no dispute that the Applicants occupied the Property as tenants for the relevant period and each tenant produced bank statements showing rent paid to the Respondent.[7]The Respondent was the freehold owner of the Property. Initially the Applicants rented the Property from Edyta Gladosz, who in turn rented the Property from the Respondent. However, it was agreed by all parties that, in approximately July 2019, Edyta Gladosz was no longer involved and rent was paid directly to the Respondent.[8]There were no written tenancy agreements before the Tribunal; however, the Respondent referred in her statement to an Assured Shorthold Tenant Agreement made for 12 months that was executed on 1 December 2019. There was no signed or dated copy of this agreement within the documents before the Tribunal. Relevant Offence – section 72(1) Housing Act 2004[9]The Applicants alleged that the Respondent landlord had committed an offence under section 72 of the Housing Act 2004 of having control of or management of an unlicensed HMO. The allegation was that the Property needed to be licensed in accordance with the additional HMO licensing scheme of Northampton Borough Council. This additional licensing scheme came into effect on 1 February 2020 and lasts until 31 January 2025. The scheme requires an HMO that has 3 or 4 occupiers from 2 or more households within a designated area to be licensed. 4[10]By letter dated 29 June 2020, Northampton Borough Council confirmed that the Property was within the designated area for the additional licensing scheme.[11]The Applicants confirmed within the documents they provided to the Tribunal and also at the hearing that they all lived at the Property for the relevant period and only left the Property when West Northamptonshire Council issued an Emergency Prohibition Order under section 43 Housing Act 2004. This order required the immediate cessation of the Property being used for resting, sleeping and as a habitable home on 11 March 2022.[12]The Respondent had not been convicted of the offence and therefore the Tribunal needed to be satisfied beyond reasonable doubt that this offence was established. Hearing on 3 April 2024[13]The hearing took place via Cloud Video Platform (CVP).[14]The Applicants appeared at the hearing in person assisted by Alicja Wota (Polish interpreter).[15]The Respondent did not attend the hearing and was not represented. The Tribunal waited until 10.15am to allow the Respondent additional time to join the hearing, however she did not attend. The Tribunal was satisfied that the Respondent was aware of the hearing date and noted in an email to the Tribunal dated 15 September 2023 that the Respondent explained that she was unable to attend the Tribunal in person and wished her apologies to be passed to the judge.[16]The Tribunal considered the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 and in particular rule 3 (overriding objective) and the need to avoid delay, so far as compatible with the proper consideration of the issues. Given the Respondent was aware of the hearing, had confirmed that she would not be able to attend and had provided a witness statement, the Tribunal determined that it was in the interest of justice to proceed in the Respondent’s absence. The Law[17]Section 41(1) Housing and Planning Act 2016 states: “A tenant or a local housing authority 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” Section 43 (1) Housing and Planning Act 2016 states: “The First-tier Tribunal may make a rent repayment order if satisfied, beyond reasonable doubt, that a landlord has 5 committed an offence to which this Chapter applies (whether or not the landlord had been convicted)” Section 40(3) Housing and Planning Act 2016 defines “an offence to which this Chapter applies” by reference to a table. The offence under section 72(1) Housing Act 2004 (control or management of unlicensed house) is within that table. Control or Management of Unlicensed HMO:[18]Section 72(1) Housing Act 2004 provides: “A person commits an offence if he is a person having control of or managing an HMO which is required to be licensed under this Part but is not so licensed.” Section 55(2)(b) Housing Act 2004 provides that if an area is designated by the authority as subject to additional licensing: “any HMO in that [local housing] authority’s district which falls within any description of HMO specified in the designation”.[19]Northampton Borough Council introduced an Additional Licensing Scheme requiring every house in multiple occupation that contains three or four occupiers who form two or more households with occupants sharing one or more facilitie,s to be licensed from 1 February 2020. This scheme runs for a five year period (NBC Additional HMO Licensing 2020 to 2025 Scheme). Having Control of or Managing a House in Multiple Occupation that is required to be licensed.[20]The Tribunal must be satisfied to the criminal standard (beyond reasonable doubt) that the offence of having control of or managing a house in multiple occupation which is required to be licenced but is not so licensed (section 72(1) Housing Act 2004) has occurred before it may consider making a RRO under section 40(1) Housing and Planning Act 2016.[21]The Tribunal determined the Relevant Period of the offence as 11 March 2021 to 11 March 2022. Before a RRO could be considered, the Applicants had to establish beyond reasonable doubt that the offence had been committed for the relevant period.[22]The Applicants told the Tribunal that during the relevant period (11 March 2021 to 11 March 2022) they all lived at the Property and that, in addition, Janusz Pelikant, also lived there. He was not a party to this application but the Applicants confirmed that he was living at the Property. The Applicants also confirmed that they each had separate rooms and formed separate households, but were sharing washing and cooking facilities. The Applicants also confirmed that the Respondent was the person who they 6 paid rent to and they each produced bank statements showing regular payments to the Respondent.[23]The Applicants provided correspondence outlining the action that had been taken by Northampton Borough Council (the Council). The Tribunal was shown a letter dated 29 June 2020, which the Council had sent to the Respondent that explained that the Property was an HMO and was required to be licensed. The Respondent was invited to make an application for an HMO licence by 13 July 2020. No such application was made and the Respondent confirmed this in her written statement to the Tribunal.[24]On 11 March 2022, West Northamptonshire Council obtained a warrant under section 240 Housing Act 2004 to enter the Property. Upon entry the Council determined that the Property required an HMO licence under the Council’s additional licensing scheme and that the property did not have a valid licence which was an offence under section 72(1) Housing Act 2004. The Council therefore issued a notice to issue a financial penalty totalling £15,000, which included £2,500 for the offence under 72(1) Housing Act 2004.[25]The Respondent did not attend the hearing; however, within her witness statement, the Respondent set out the history and in particular that from July 2019 she began collecting the rent from the Applicants. Findings in Relation to Offence under section 72(1) Housing Act 2004 - Control or management of an unlicensed HMO.[26]The Tribunal was satisfied beyond reasonable doubt that the Property was an HMO that required a licence and that for the Relevant Period the Property was not licensed. This finding was made because the Tribunal accepted the evidence of the Applicants that they lived at the Property as tenants for the relevant period (11 March 2021 until 11 March 2022) and noted that this was not disputed by the Respondent. The Tribunal found that the Applicants gave credible evidence as to the basis on which they occupied the Property. The Applicants all produced bank statements that showed that they each paid rent to the Respondent. The Tribunal accepted the evidence of the Applicants that they lived as separate households as they each told the Tribunal that they lived in separate rooms but shared washing and cooking facilities and they each paid rent to the Respondent which showed that they each had a tenancy arrangement with the Respondent. On this basis, the Tribunal found that 3 people were living in the property in separate households but sharing washing and cooking facilities.[27]The Tribunal therefore found that the Property was required to have an HMO licence for the relevant period under the Northampton Borough Council’s additional licensing scheme and that the Property was not so licensed. In making this finding beyond reasonable doubt, the Tribunal accepted the written evidence of Northampton Borough Council that the Property was required to be licensed under their additional licensing scheme and also took into account that the Council had found that on 11 March 2022 an offence under section 72 of the Housing Act 2004 had been 7 committed on that date. The Tribunal noted that the Council’s finding related only to 11 March 2022, however the Tribunal was satisfied that the offence was committed throughout the relevant period (11 March 2021 to 11 March 2022) and made this finding on the basis of the evidence given to the Tribunal by the Applicants that the three Applicants occupied the Property and that they formed two or more households, sharing one or more facilities when the additional licensing scheme was in force. (As stated above that scheme began in 2020 and runs for five years until 2025).[28]The Tribunal found beyond reasonable doubt that the Respondent was the person having control and/or managing the Property for the relevant period and the Tribunal accepted the evidence of the Applicants that rent was paid to the Respondent and that the Respondent’s own evidence was that from 2019 took over the arrangements for the Property.[29]The Tribunal therefore found beyond reasonable doubt that, for the relevant period, the Respondent committed an offence under section 72(1) Housing Act 2004. Time Limits[30]The alleged offence must be within 12 months of the day the application was made – in other words the relevant housing offence must have continued until at least 8 March 2022. The Applicants confirmed that they left the property on 11 March 2022. The application was therefore brought within 12 months of the relevant time period. As the Applicants made their application on 7 March 2023, the Tribunal accepted this application as having been made in time as the offence related to housing that, at the time of the alleged offence, was let to the Applicants, and the alleged offence was committed in the period of 12 months ending with the day on which the application was made. Reasonable Excuse/Statutory Defence[31]The Respondent did not attend the hearing and so did not give oral evidence. Her written statement did not set out a reasonable excuse of statutory defence; however, for completeness, the Tribunal considered whether the Respondent had a reasonable excuse or statutory defence.[32]The Respondent explained in her witness statement that she had originally let the Property to Edyta Gladosz who had sublet the Property. However, the Respondent’s own evidence was that from July 2019 Edyta Gladosz was no longer involved with the Property and the Respondent began collecting the rent from the Applicants. The Tribunal therefore did not find on a balance of probabilities that a reasonable excuse arose.[33]In relation to whether a statutory defence arose, under section 72(4), there was no evidence before the Tribunal that a temporary exemption was granted or that an application for a licence had been made. In her statement, the Respondent detailed the conversations that she had with Northampton Borough Council, however the Respondent was aware of the 8 need to apply for a licence and did not do so. The Tribunal therefore did not find that a statutory defence arose. Should the Tribunal Make a Rent Repayment Order (RRO)?[34]Section 43 Housing and Planning Act 2016 provides that the Tribunal may make a RRO if it is satisfied beyond reasonable doubt that the relevant offence has been committed. The decision to make a RRO award is therefore discretionary. However, because the offence under section 72 (1) Housing Act 2004 was established the Tribunal found no reason why it should not make an RRO in the circumstances of this case. Amount of the RRO[34]This is a case where a financial penalty has been made and therefore the Tribunal needed to consider Section 46 of the Housing and Planning Act 2016. This section provides that when the First-tier Tribunal decides to make a RRO under section 43 and two conditions are met, the amount of the award is to be the maximum the Tribunal has power to order under section 44 or 45. Condition 1 is that the order is made against a landlord who has received a financial penalty which has no prospect of being appealed. The Condition 2 is that the order is made in favour of a tenant on the ground that the landlord has committed an offence mentioned in row 1, 2, 3, 4 or 7 of the table in section 40(3). However, the offence that is the subject of this application is section 72(1) which is row 5 of the table in section 40(3); section 46 therefore does not apply. It therefore follows that the Tribunal must determine the amount of the RRO in particular taking into account section 44(2) Housing and Planning Act 2016 Ascertaining the Whole of the Rent for the Relevant Period[35]As stated above, the Tribunal found the offence to have been committed during the whole of the relevant period 11 March 2021 to 11 March 2022.[36]The Applicants all provided bank statements showing the rent that was paid to the Respondent. In oral evidence to the Tribunal the Applicants confirmed that they had paid rent each and every week as follows: Bartosz Rutkowski confirmed that he had paid £70 per week until 2 July 2021 when the rent was increased to £80 per week. This meant that he had paid £70 per week for 15 weeks and £80 per week for 37 weeks giving a total amount of rent paid as £4, 010 for the relevant period. Bartosz Rutkowski confirmed that his bank statements showed that £140 and then £160 was paid because he was paying Janusz Pelikant’s rent to Mrs Walker and Janusz Pelikant was reimbursing him for this share. Additionally, Bartsz Rutkowski confirmed that, in August 2021, he had bought a lawnmover and with the agreement of the Respondent had set this amount off against the rent and so only 9 paid £52 rent that week. The Tribunal found that this amount fell within section 52(2) Housing and Planning Act 2016 and was treated as rent for the purposes of an RRO. The Tribunal therefore accepted Bartosz Rutkoski’s evidence that the rent paid for the relevant period was £4, 010. Arkadiusz Stachyra confirmed that he had paid £80 per week until 2 July 2021 (15 weeks) when he had paid £90 per week (37 weeks) giving a total of £4,530 for the relevant period, and Leopold Wtorek confirmed that he had paid £80 per week until 2 July 2021 (15 weeks) when his rent had increased to £90 per week (37 weeks) giving a total of £4,530 for the relevant period.[37]At paragraph 66 of her witness statement the Respondent stated that on 17 March 2022 the Respondent’s partner refunded £90 in cash to Mr Rutkowski for the rent he had paid and a further sum of £250 was transferred by bank transfer to Mr Wtorek which she described as 1 x £90 and 2 x £80 which had been paid prior to the Council intervention. The Respondent was not at the hearing and was not able to provide any further detail regarding this payment. It was not clear whether this was rent that had been paid in advance i.e for the period after 11 March 2022. In light of this, the Tribunal accepted the evidence of the Applicants as to the amount of rent they paid for the relevant period as set out above. Deductions for Utility Payments that Benefit the Tenant[38]The Applicants confirmed that they did not pay for utilities and that this was included in their rent. The Applicants also confirmed to the Tribunal that letters containing what they assumed to be utility bills arrived at the Property but these letters were not opened and simply piled up.[39]The Respondent provided limited information in her written statement as to utility payments that she had made. She provided what appeared to be a direct debit payment of £312.50 for “together energy” for 29 November 2021, 29 December 2021 and 28 January 2022, however no information was given as to the property these amounts related to.[40]When determining the amount of a RRO, the Tribunal has a discretion whether or not to make a deduction for utility payments. Acheampong v Roman [2022] UKUT 239 confirmed that it will usually be appropriate to deduct a sum representing utilities. Whilst an experienced Tribunal will be able to make an informed estimate, the Tribunal did not have sufficient clarity as to the amount actually paid by the Respondent. In the circumstances and using its expert knowledge, the Tribunal made a reduction of £1, 500 for utilities for the relevant period, which was divided equally between the three Applicants at £500 each. Determining the Seriousness of the Offence to Ascertain the Starting Point 10[41]The Tribunal had to consider the seriousness of the offence compared to other types of offences for which a RRO could be made, and also as compared to other examples of the same offence.[42]In determining the seriousness of the offence, the Tribunal adopted Judge Cooke’s analysis in Acheampong v Roman [2022] that the seriousness of the offence could be seen by comparing the maximum sentences upon conviction for each offence. Using this hierarchical analysis, the relevant section 72(1) offence of control of or managing an HMO without a licence would generally be less serious. However, the Tribunal had to consider the circumstances of this particular case as compared to other examples of the same offence. Conduct of Landlord and Tenant[43]On 11 March 2022, the West Northamptonshire Council made an Emergency Prohibition Order under section 7(2) Housing Act 2004 in relation to the Property. The order was issued following consultation with the fire brigade whereby a severe category 1 hazard was identified – that being an imminent risk in an HMO property namely a lack of automatic fire detection and protected means of escape.[44]In addition, the West Northamptonshire Council made a financial penalty for the following offences which they found to have been committed on 11 March 2022 namely: i. Section 72 – offences in relation to the licensing of houses in multiple occupation – £2, 500 ii. Section 234 – management regulations in respect of a HMO: Regulation 3 – duty of manager to ensure name, address and telephone contact number are available to each household in the HMO – £500 Regulation 4 – duty of manager to take safety measures – £5, 000 Regulation 7 – duty of manager to maintain common parts, fixtures, fittings and appliances – £5, 000 Regulation 8 – duty of manager to maintain living accommodation – £2, 500.[45]In addition, the Applicants highlighted the following areas of concern in their written and oral evidence to the Tribunal:a. Hole in Roof that was left unrepaired 11 The Applicants described a hole in the roof that formed after roof tiles had moved. This caused water to leak from the ceiling and walls in the bathroom and through the bathroom light. Additionally, pigeons began nesting in the roof and this resulted in pigeons coming into the living space of the Applicants. Additionally, the continuous water leakage in the bathroom resulted in the ceiling collapsing with debris falling into the bath. This resulted in a hole to the attic which resulted in pigeon feathers and the smell of pigeon droppings coming into the Applicants’ living space. The hole in the bathroom meant that there was no lighting in the bathroom and so the Applicants had to use a lamp with an extension lead to get light into the bathroom. Additionally, they had to have a bucket in the bathroom to catch the leaking water. Leopold Wtorek told the Tribunal that in his bedroom water was coming through the light and that he regularly had to remove pigeons from his room.b. Regulations not Followed In addition to the breach of regulations found by West Northamptonshire Council, the Applicants stated that they were not provided with a rent deposit scheme, a how to rent book, or gas safety certificate or energy performance certificate.c. Condition of the Garden The Applicants told the Tribunal that the washing machine had no outlet and so was blocked. This led to water pooling in the garden which attracted frogs and mosquitoes. The Applicants told the Tribunal that this meant that they were unable to use the garden.d. Forced to Leave Property at Short Notice The Applicants all described the stress they felt when they were rehoused by the Council on 11 March 2022 following the Council’s inspection and the issuing of the Emergency Prohibition Order. They described the stress that this caused and the difficulty in finding new accommodation. Mitigation of Respondent[46]The Tribunal considered carefully the statement provided by the Respondent and noted that the Respondent stated that she had been spending the majority of her time in Yorkshire supporting elderly parents. However, the Tribunal found that this did not amount to mitigation. In return for rent being paid, a landlord is under a duty to provide living accommodation that meets the required standards, and this is particularly true in the context of an HMO. A landlord cannot turn away from their 12 obligations and instead must ensure that they themselves are meeting the required standards or if they themselves are not in a position to do so should make arrangements for others, for example a property agent, to do this in their stead. Financial Circumstances of Respondent Landlord[47]The Respondent provided limited evidence as to her outgoings and other financial circumstances. A mortgage statement was provided for 2021 but no other information was provided about the Respondent’s income and expenditure.[48]The Tribunal noted that West Northamptonshire Council demanded payment of £510 for the expenses that were incurred by them in relation to the Emergency Prohibition Order, although no detail had been provided as to whether or not this sum had been paid. Additionally, the Tribunal noted that the Authority issued a Financial Penalty under section 294A Housing Act 2004 totalling £15,000. Again, no information had been provided to the Tribunal by the Respondent as to whether or not this amount had been paid.[49]The Tribunal must consider the financial circumstances of the Respondent but the lack of information provided to the Tribunal by the Respondent made this assessment difficult. Whilst the Tribunal noted that West Northamptonshire Council had imposed financial penalties, the purpose of the rent repayment order was to enable rent to be repaid to the Respondents. The Tribunal was therefore required to balance this but in the absence of any further financial information provided by the Respondent. Whether Respondent Landlord has been convicted of a relevant offence[50]Whilst the Respondent had not been convicted of a relevant offence, the West Northamptonshire Council made a financial penalty for the offence under section 72, the date of the offence being 11 March 2022. That financial penalty related to the same matter as this Tribunal’s decision except that this Tribunal found beyond reasonable doubt that the offence had been committed for the period 11 March 2021 to 11 March 2022. Quantum Decision[51]Taking all of the factors outlined above into account, the Tribunal found that this licensing offence itself was not the most serious under the 2016 Act. However, the Tribunal found that there were significant aggravating factors given the condition of the Property. The Tribunal found that there was a serious lack of regard to the safety of the Applicants which was at such a level that West Northamptonshire Council had to issue an Emergency Prohibition Order requiring the Applicants to immediately leave the Property. The Applicants’ evidence to the Tribunal was that this had caused 13 stress and inconvenience and the Tribunal noted in particular that Arkadiusz Stachyra confirmed at the hearing that he was still homeless. These factors, as well as the factors outlined above with regard to the condition of the Property, in the Tribunal’s view made this offence one that was at the more serious end for a section 72 offence. The Tribunal concluded that the starting point for an offence of this nature would be 60%. However, taking the factors of this particular case into account, the Tribunal increased this amount to 80% in line with the findings made above.[52]The Tribunal therefore made RROs as follows: Bartosz Rutkowski(1) Total Claim - £4,010 Less utilities - £ 500 Total £3,510 Apportionment of RRO based on 80% of the payable sum after deduction of the share of outgoings as set out above of which gives a total amount of £2,808 Leopold Wtorek(2) Total Claim - £4, 530 Less utilities - £ 500 Total £4, 030 Apportionment of RRO based on 80% of the payable sum after deduction of the share of outgoings as set out above of which gives a total amount of £3, 224 Arkadiusz Stachyra(3) Total Claim - £4,530 Less utilities - £ 500 Apportionment of RRO based on 80% of the payable sum after deduction of the share of outgoings as set out above of which gives a total amount of £3, 224[53]The Tribunal ordered that the payment be made in full within 28 days of the date of this decision. Application Fees[54]The Tribunal invited the parties to make representations as to whether or not the Respondent should refund the Applicants for the application fee 14 that they each paid to the Tribunal. The Applicants asked the Tribunal to make such an order.[55]Given that the Tribunal had made a RRO, the Tribunal exercised its discretion to order that the Respondent must pay the Applicants £300 in respect of Tribunal fees to each applicant. This amount shall be paid within 28 days of the date of this decision. Judge Bernadette MacQueen Date: 22 April 2024 ANNEX – RIGHTS OF APPEAL[1]If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-Tier at the Regional Office which has been dealing with the case.[2]The application for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.[3]If the application is not made within the 28-day time limit, such application must include a request to an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.[4]The application for permission to appeal must identify the decision of the Tribunal to which it relates (ie give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking.