Cerys Hancock Wesley WhitfieldApplicantJayne Gray & Steve GrayRespondent
Before
Regional Judge WhitneyRespondent : Jayne Gray & Steve Gray Representative : for the ApplicantDate 4 September 2024Hearing 2024-09-04Property: 40 Bohelland Road, Penryn, Falmouth, Cornwall TR10 8DYType of application: Application for a rent repayment order by Tenant Sections 40, 41, 42, 43 & 45 of the Housing and Planning Act 2016
DECISION
[1]The Respondent shall pay to the Applicants the sum of £750 within 28 days.[2]The Respondent shall reimburse the Tribunal fees paid by the Applicants of £300 to the Applicant within 28 days.
REASONS
[1]On 11th March 2024 the Tribunal received an application under section 41 of the Housing and Planning Act 2016 (the Act) from the Applicant tenant for a rent repayment order (RRO) against the Respondent landlord. The amount claimed is £3000 for the period 1st September 2022 to 21st April 2024.[2]The Applicant states that the property in question did not have a HMO licence. They have attached a letter from Cornwall Council dated 6th March 2024 confirming for the period August 2022 to August 2023 no HMO Licence was in place.[3]The Tribunal issued directions on 10th July 2024. The Respondent failed to supply a statement of case. Mr Gray did email the Tribunal on 21st August 2024 in the following terms: “I am writing in response to your recent email to my wife, reference the above address Your reference :- CHI/00HE/HMF/2024/0008/AW I am bemused at the request from Cerys Hancock and Wesley Whitfield for rent repayment. At the time they approached us for a room they were struggling to find anywhere that would take them as they had a dog. They were initially going to have a room each but then asked if they could share so they could pay half the rent each, and find another tenant for Wesley’s room. After Hancock’s visit to Cournwall (sic) Council earlier this year, I discovered that I had inadvertently breached the rules for being licensed as an HMO. I agreed with CC to rehome one of the tenants in my own house, and now only have the legal amount of people at the above address, thus not requiring an HMO licence. Cornwall Council have reviewed the situation and have chosen not to take anymore action against my wife and I for our breach, as we made no profit from our mistake. The property now has only 4 professional sharers at any given time. I cannot see why Hancock or Whitfield would be considering any compensation or rent return as they were not inconvenienced or charged any excess. In fact they did well from the arrangement. My wife and I do not wish to attend a tribunal in Bodmin and would like to know if there is a way this can be settled out of court.”[4]The Applicant supplied a hearing bundle of 78 pdf pages and references in [ ] are to pages within that bundle.[5]The hearing took place on 4th September 2024 at Bodmin Law Courts. It was recorded. Ms Hancock and Mr Whitfield attended in person. Mr and Mrs Gray attended in person. Law[6]A rent repayment order is an order of the Tribunal requiring the landlord under a tenancy of housing in England to repay an amount of rent paid by a tenant. Such an order may only be made where the landlord has committed one of the offences specified in section 40(3) of the 2016 Act. A list of those offences was included in the Directions issued by the Tribunal and is at the end of this decision.[7]Where the offence in question was committed on or after 6 April 2018, the relevant law concerning rent repayment orders is to be found in sections 40 – 52 of the 2016 Act. Section 41(2) provides that 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.[8]Section 43 of the 2016 Act provides that, if a tenant makes such an application, the Tribunal may make a rent repayment order if satisfied, beyond reasonable doubt, that the landlord has committed one of the offences specified in section 40(3) (whether or not the landlord has been convicted).[9]Where the Tribunal decides to make a rent repayment order in favour of a tenant, it must go on to determine the amount of that order in accordance with section 44 of the 2016 Act. If the order is made on the ground that the landlord has committed the offence of controlling or managing an unlicensed HMO, the amount must relate to rent paid during a period, not exceeding 12 months, during which the landlord was committing that offence (section 44(2)). However, by virtue of section 44(3), the amount that the landlord may be required to repay must not exceed: a) the rent paid in respect of the period in question, less b) any relevant award of universal credit paid (to any person) in respect of rent under the tenancy during that period.[10]In certain circumstances (which do not apply in this case) the amount of the rent repayment order must be the maximum amount found by applying the above principles. The Tribunal otherwise has a discretion as to the amount of the order. However, section 44(4) requires that the Tribunal must take particular account of the following factors when exercising that discretion: 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 any of the specified offences. Evidence[11]Mr and Mrs Gray explained at the start of the hearing that they had filed no documents or case in accordance with the directions as they did not know what to do. They handed up a print out of various text messages with the Second Applicant. I allowed them to address the Tribunal on the application.[12]I explained to them that they were not required to make any admission of the offence if they did not wish to. I also explained that they may wish to consider relying upon a defence of reasonable excuse. I explained how I would consider such applications.[13]Mr and Mrs Gary did not admit the offence.[14]Mrs Gray explained they purchased the Property in about 2019 as a buy to let with one other house at that time. She confirmed they owned their home address. She understood that as a two storey house there were no restrictions on numbers of occupants although prior to this tenancy they only had 4 persons living in the house.[15]She confirmed they had filed no financial information but explained in letting the two Applicants share a room she only charged them the same rent as just one person. She explained her mortgage had doubled. Her and her husband just wanted to help people.[16]Mrs Gray confirmed the rent was exclusive of all bills. She suggested the rental of £375 was cheap for a room. She did not, and had never used an agent. She had when purchasing tried to familiarise herself with the law and had been for a short period of time a member of the Cornwall Residential Landlords Association.[17]Mrs Gray explained her daughter found the Applicants to rent a room using a student rental website. She accepted that 6 people had been living in the house. Some were students and the others occupying as their main home.[18]As to the suggestion of damp she stated this was due to condensation and the tenants had all been asked to open windows. The landlords provided a dehumidifier.[19]The other issues raised were petty squabbles between the occupants which in her opinion were for the occupants to resolve. However when the Applicants asked for an early release she and her husband agreed. This was first raised in December 2022 in the messages handed in at the start of the hearing.[20]Mrs Gray accepted the Applicants had paid their rent of £3000 as alleged.[21]Ms Hancock relied upon the bundle. I indicated I had seen the letter from Cornwall Council, the AST and read the other documents. She relied on these to prove the offence.[22]She explained that the Property had been occupied by the 5 lawful occupiers referred to in the tenancy and also another lady who she and Mr Whitfield found to occupy the room which Mr Whitfield was originally to occupy. This meant there were 6 people in occupation. Ms Hancock went through each person named and confirmed they were either students or in work living at the house as their main home.[23]Ms Hancock explained she found the Property via a Facebook site, initially speaking to the Respondents daughter. Originally she was to have one room and Mr Whitfield a separate room but they asked if they could take just one room. The Respondents agreed if another occupant was found for the room in which Mr Whitfield was to live. They found a lady to occupy that room.[24]Ms Hancock referred to the room suffering from mould. Having no lock on the door and other occupants entering the room. She also raised orally other matters which caused concern including a failure to provide a front garden fence meaning the garden was not safe for her dog. She agreed the door had not had a lock when she moved in and she had not asked for one.[25]Ms Hancock agreed she did not always open the window, particularly in winter when it was cold. The other occupants of the house were keen to not have the heating on too much as this caused the bills to rise.[26]Ms Hancock agreed two dehumidifiers had been provided. The one she initially used stopped working properly so she ceased using it. She accepted she had not told the landlord.[27]Ms Hancock explained she and Mr Whitfield asked for permission to repaint. She explained this was granted and they repainted the walls. After this was done the mould did not return.[28]Ms Hancock agreed that the Respondents released them when they asked and their deposit was returned in full. Has an offence been committed?[29]I start by reminding myself that in making any findings as to the offence I must be satisfied as to the criminal burden of proof.[30]It is said the Property was occupied as an unlicensed HMO throughout the term of the Applicant’s tenancy agreement. It is said the Property is a mandatory licensable HMO in that it is occupied by 5 or more persons consisting of two or more households living in the Property as their main home.[31]Mr and Mrs Gray did not admit the offence.[32]The bundle contained a letter from Cornwall Council [45] dated 6th March 2024 which confirmed between August 2022 and August 2023 there was no licence for the Property.[33]It appears from the email from Mr Gray dated 21st August 2024 and set out above that he accepts he did not have a licence. In their evidence and submissions to me at the hearing they did not suggest they did have a licence.[34]The tenancy agreement relied upon by the Applicants [23-33] lists at [34] 5 lawful occupiers. I note the tenancy lists both Mr and Mrs Gray as landlords and no agent was involved. All parties in their evidence appeared to accept that in fact during the Applicants tenancy there were 6 adults in occupation and a dog occupying the 4 rooms.[35]Mr and Mrs Gray produced messages between Mrs Gray and the Second Applicant sent on 1st December 2022. In one it states: “…I’m wondering if having 6 people and a dog is too much for that size house….”[36]Taking account of the documents supplied including the Respondents email to the Tribunal of 21st August 2021, the messages they introduced on the morning of the hearing and Mrs Gray’s oral statement to the Tribunal I am satisfied beyond reasonable doubt that the Property was an unlicensed HMO being occupied by 6 persons throughout the period claimed of 1st September 2022 to 21st April 2023. These occupants made up more than two households and were occupying as students or as their main home and so satisfy the requirements of the offence.[37]I have considered whether or not the Respondents had a reasonable excuse. Mr and Mrs Gray suggest the breach was inadvertent. It does however appear they personally had been letting the Property and using the same as a mandatory HMO. The licensing regime for such properties has been in force since 2018. This was prior to them looking to invest in the buy to let market in purchasing two properties. I am not satisfied they took appropriate or adequate steps to understand their responsibilities. I do accept that they approached the letting with the best of intentions however this does not in my judgment give rise to a defence of reasonable excuse on the evidence presented to me. Landlords when letting properties themselves are running a business and have a duty to ensure they take steps to familiarise themselves with the changing statutory rules and regulations. I am not satisfied that the Respondents had any mechanism for so doing. I find there is no defence of reasonable excuse.[38]I am satisfied to the criminal standard of proof that the Respondent’s failed to have in place an HMO licence and so have committed an offence pursuant to Section 72(1) of the Housing Act 2004. Has the application been made in time?[39]The Application was made on 11th March 2024. I am satisfied that the application for an RRO was made in accordance with the statutory time limits. Should we exercise our discretion to make an order?[40]I considered the decision in The London Brough of Newham v John Francis Harris [2017] UKUT 264 (LC). I have found that an offence has been made out. Taking account of all the facts I am satisfied that this is a case where I should exercise our discretion to make an order. What order should we make?[41]It is accepted that the rent has always been paid and that the monthly rent is £375. The maximum rent repayment order we can make is £3,000 being the rent paid by the Applicant’s for their period of occupancy. I note that no adjustment is required for utilities as these were all paid separately by the tenants at the Property.[42]All offences for which a rent repayment order can be made are serious but it is necessary to consider each offence individually. The offence committed is in my judgment not the most serious of offences for which a rent repayment order can be made. I would significantly discount the amount payable.[43]I note the local authority have chosen to take no action. No one suggests that either Respondent has any other convictions which I should consider.[44]The Applicant raises certain matters which may be said to be conduct. I do accept what the Respondents say that matters between the occupants themselves are matters they would expect the occupants to resolve. There is however the issue over the damp. I note the Respondents provided dehumidifiers and suggested windows should be open. Ms Hancock was candid in her admissions as to how they had not opened windows or reported the issue with one dehumidifier. I also take account of the fact that to the landlords credit they agreed to the release of the tenants and repaid their deposit.[45]Weighing these matters up I am satisfied that I should make no adjustment for either parties conduct.[46]Mr and Mrs Gray have produced no evidence as to their finances. I note they own 3 properties although with mortgage finance. They did not suggest they would be unable to afford any order I make. I make no adjustment as a result of the Respondent’s finances. I am satisfied they could have filed documents but did not do so.[47]Taking account of all such matters and the evidence of the parties we consider that we should exercise our discretion and make a rent repayment order in the sum of £750 being 25% of the total rent paid.[48]We have considered whether or not we should exercise our discretion to order the Respondent to reimburse the Applicants for the fees paid to the Tribunal of £320. The making of such an award is always at the discretion of the Tribunal. In this case we have found for the Applicant. Taking account of our findings and the facts of this case we make an order that the Respondent shall pay to the Applicants the sum of £320 within 28 days.[49]For the avoidance of doubt the total sum payable of £1,070 shall be paid to the Applicants on a joint and several basis and they should confirm to the Respondents how the monies are to be paid. RIGHTS OF APPEAL 1.A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to rpsouthern@justice.gov.uk 2.The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision. 3.If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed. Explanation of the Tribunal’s jurisdiction to make a Rent Repayment Order[1]The issues for the Tribunal to consider include: Whether the Tribunal is satisfied beyond a reasonable doubt that the landlord has committed one or more of the following offences: Act Section General description of offence 1 Criminal Law Act 1977 s.6(1) violence for securing entry 2 Protection from Eviction Act 1977 s.1(2), (3) or (3A) unlawful eviction or harassment of occupiers 3 Housing Act 2004 s.30(1) failure to comply with improvement notice 4 Housing Act 2004 s.32(1) failure to comply with prohibition order etc. 5 Housing Act 2004 s.72(1) control or management of unlicensed HMO 6 Housing Act 2004 s.95(1) control or management of unlicensed house 7 Housing and Planning Act 2016 s.21 breach of banning order Or has a financial penalty been imposed in respect of the offence?(i) What was the date of the offence/financial penalty?(ii) Was the offence committed in the period of 12 months ending with the day on which the application made?(iii) What is the applicable twelve-month period?(iv) What is the maximum amount that can be ordered under section 44(3) of the Act?(v) Should the tribunal reduce the maximum amount it could order, in particular because of: (a) The conduct of the landlord? (b) The conduct of the tenant? (c) The financial circumstances of the landlord? (d) Whether the landlord has been convicted of an offence listed above at any time? (e) Any other factors?[2]The parties are referred to The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 for guidance on how the application will be dealt with. Important Note: Tribunal cases and criminal proceedings If an allegation is being made that a person has committed a criminal offence, that person should understand that any admission or finding by the Tribunal may be used in a subsequent prosecution. For this reason, he or she may wish to seek legal advice before making any comment within