Judge H CarrMs S Coughlin MCIEHJustice for Tenants (REF 24850) for the ApplicantN/A Application for a rent repayment order by tenant Sections 40, 41, 43, & 44 of the for the RespondentDate 23 January 2025Property: NW6 6DDType of application: Housing and Planning Act 2016 Judge H Carr
DECISION
2 Decisions of the tribunal(1) The tribunal determines to make a Rent Repayment Order in the sum of £4,076.31(2) The tribunal determines that the Respondent reimburse the Applicant for his application and hearing fees, totalling £320.(3) The tribunal makes the determinations as set out under the various headings in this decision. The application[1]The Applicant tenant seeks a determination pursuant to section 41 of the Housing and Planning Act 2016 (the Act) for a rent repayment order (RRO). The Applicant alleges that the Respondent landlord has committed the offence of control or management of an unlicensed HMO or in the alternative that the Respondent landlord has committed the offence of control or management of an unlicenced house.[2]The period for which the RRO is sought is from 1st March 2022 – 30th April 2023.[3]The applicant is seeking to recover the sum of £5,832.30 for rent paid during this period. The hearing[4]The Applicant attended the hearing. She was represented by Jamie McGowan of Justice for Tenants.[5]The Respondent attended the hearing and represented herself. She was accompanied by her sister, Daisy Houghton, who assisted her with representations. The background[6]The property is a 1 bedroomed first floor flat, the living room and attic space of which have been used at various times as additional bedrooms. The Respondent had carried out work to the property in 2004 to make 3 the loft area of the flat available as living accommodation. The property has a shared bathroom with separate WC and a shared kitchen.[7]The Respondent is the owner of the property as shown by the land registry title deed. She has owned the leasehold of the property since July 7th 1997.[8]The Applicant occupied the property from 29th December 2021 until 30th April 2023.[9]The rent paid by the Applicant was £950 plus bills but excluding council tax.[10]The Respondent is named as the landlord on the agreement which is described as a lodging guest agreement. The rent was paid to the Respondent.[11]It is agreed that the Respondent was out of the country from the last week in December 2021, prior to the commencement of the Applicant’s occupation, until 7th October 2022. During this period, she was visiting her brother in Kenya and also visited friends elsewhere including Denmark.[12]Having returned to the property on 7th October 2022, the Respondent left the property on 30th November 2022 to travel abroad.[13]The Respondent says she gave the Applicant notice on 27th February 2023 following which the Applicant left the property on 30th April 2023. The issues[14]The issues that the tribunal must determine are;(i) The status of the Applicant’s occupation?(ii) Whether the landlord is a resident landlord?(iii) Is the property licensable, and if so, what type of licence is required?(iv) Is the tribunal satisfied beyond reasonable doubt that the landlord has committed the alleged offence? 4(v) Do the Respondents have a ‘reasonable excuse’ defence?(vi) What amount of RRO, if any, should the tribunal order? (a) What is the maximum amount that can be ordered under s.44(3) of the Act? (b) What account must be taken of (1) The conduct of the landlord (2) The financial circumstances of the landlord: (3) The conduct of the tenant?(vii) Should the tribunal refund the Applicant’s application and hearing fees? The determination The status of the Applicant[15]Whilst it is not relevant for the purposes of making an RRO whether the Applicant’s occupation is as a tenant or licensee, the Applicant’s occupation status is relevant for the purpose of determining the seriousness of any offence which the tribunal may decide has been committed.[16]The Applicant argues that the lodging guest agreement is a sham licence agreement. She says that she paid rent, for a term and had exclusive possession of her room, which was originally the living room of the property.[17]The Applicant says that she never shared nor swapped her room with other occupants, thereby satisfying the criteria for a tenancy. Whilst the only access to the balcony was through her room, she only occasionally used the balcony herself, and no other occupant of the property used the balcony. It was very clear that the room was her room exclusively.[18]There is disputed evidence about the lockability of the room. The applicant says that the door to the room had a lock and key which the Respondent originally advised the Applicant to use as the front door lock 5 was flimsy. Later in October 2022 the landlord told her not to lock her room for fire safety reasons.[19]The Respondent says that the Applicant took it upon herself to get a lock and key to the room. However, she also said that she raised no objection to the Applicant locking her room.[20]There is evidence in the hearing bundle that the door could be locked.[21]In the alternative, the Applicant argues that if the agreement is a licence, it is not a typical lodger agreement. Instead, she argues that it would fall under the category of a licence granting basic protection, including specific legal safeguards. This would require the Respondent to follow the proper legal process for notice and to seek a possession order through the courts if she wished to recover possession of the premises.[22]The Respondent says that the Applicant always knew that the agreement was a licence and that she never granted the Applicant an assured shorthold tenancy. She was simply looking for someone to share some of the financial burden of the property whilst she was out of the country.[23]The Respondent says that the agreement she used was given to her by a friend, or she found it online. She did not get legal advice about the agreement. The decision of the Tribunal[24]The Tribunal determines that the Applicant occupied the property as a tenant. The reasons for the decision of the tribunal[25]The factual requirements for the legal status of tenant were present, in that the Applicant occupied the room for a term, at a rent, and she had exclusive possession of the room.[26]The facts include the lockability of the door and the evidence that the Respondent did not object to the door being locked.[27]It follows from this that there were obligations upon the Respondent relating to the granting of a tenancy such as providing the Right to Rent information etc.[28]The extent of the Respondent’s legal obligations with respect to notice requirements etc are dependent upon whether the Respondent is a resident landlord or not as resident landlords are excluded from some of the protections of the Protection from Eviction Act 1977. 6 Was the Respondent a resident landlord?[29]The Respondent argues that regardless of whether the Applicant held a lease or a licence, she was a resident landlord. The property was her home, and it is the only property that she owns. When she left for Kenya she did not know how long she was going to be there. All her possessions were in the property, and she had every intention to return, albeit she did not know when she would return.[30]The Tribunal asked the Respondent which room in the property was the room that she occupied. She said she had a mattress in the attic and that she had a bed in the living room and used one of these areas when she was in the flat. The Tribunal also asked how long the Respondent was in actual occupation of the property whilst the Applicant was in residence. The Respondent agreed that she was only in occupation at the same time as the Applicant between 7th October and 30th November 2022. The decision of the Tribunal[31]The Tribunal determines that the Respondent was not a resident landlord other than the period during which she was in occupation of the property, ie during the period of 7th October – 30th November 2022. The reasons for the decision of the Tribunal[32]The Tribunal listened carefully to the arguments of the Applicant and the Respondent. Whether a landlord is a resident landlord is dependent upon the factual matrix underpinning the arrangements between the tenant and the landlord. In this case the factual matrix was particularly complex.[33]The Tribunal considers that the status of resident landlord releases landlords from a significant number of obligations and therefore it should not be broadly construed.[34]In reaching its decision the Tribunal has taken into account the following(i) The fact that the Landlord was not resident at the property at the beginning nor the end of the tenancy.(ii) The fact that the Landlord was away from the property for several months, longer than the period of a holiday, and returned for only a relatively short period. 7(iii) The fact that whilst the Landlord had left her possessions in the property those possessions, such as beds, TV etc were used by the other occupiers(iv) The fact that no particular room could be identified as the Landlord’s room. Was the property licensable, and if so, what type of licence was required?[35]The situation as concerns licensing is complex because the number of occupiers fluctuated during the period of the Applicant’s occupation so that an additional licence was not always a requirement and also because the Respondent’s occupancy of the property fluctuated, which is relevant for any requirement of selective licensing.[36]The Applicant argues that the property required licensing under the London Borough of Brent’s selective licensing scheme, or alternatively under its additional licensing scheme.[37]The Applicant says that the property was situated within a selective licensing area as designated by the London Borough of Brent. The selective licensing scheme came into force on 1st June 2018 and ceased to have effect on 30th April 2023. The property is in Queens Park, a ward covered by the selective licensing designation.[38]The designation makes it clear that it applies to every rented property other than those which are exempt.[39]The Applicant accepts that on the face of it the exemption at paragraph 2 of The Selective Licensing of Houses (Specified Exemptions)(England) Order 2006 – SI 370/2006 may be relevant. Sub-paragraph h provides that a tenancy or licence under the terms of which the occupier shares any accommodation with the landlord or licensor or a member of the landlord’s or licensor’s family exempts the landlord from the requirement for a selective licence.[40]However, the Applicant argues that the exception does not apply in this case as it requires actual sharing with lodgers. Even if the Tribunal finds that the Respondent is a resident landlord, the requirement of sharing requires more than simply residence, it requires actual physical occupation of a shared home. The Applicant argues that as the Respondent was only physically present during the period from 7th October to 1st December 2022 for the rest of the period a selective licence was required. 8[41]Alternatively the Applicant argues that the Respondent committed the offence of having control of or managing an unlicensed HMO in breach of section 72(1) of the HA 2004 from the time when the third occupier moved into the property because the property was situated within an additional HMO licensing area as designated by the London Borough of Brent.[42]The additional licensing designation by the London Borough of Brent commenced on 1st February 2022 and, unless revoked, expires on 31st January 2025. The scheme covers the whole of the area of Brent.[43]If the tribunal accepts that an additional licence was required and not a selective licence, this would only be during the period when there were three occupiers of the property, ie for the last three months of the Applicant’s occupancy. The decision of the tribunal[44]The property required a selective licence for the period from 1st March to 6th October 2022 and 1st December 2022 to 25th February 2023 and an additional licence for the period from 26th February to 30th April 2023. The reasons for the decision of the tribunal[45]The tribunal accepts the argument of the Applicant that the exception from the requirement for a selective licence does not apply during the Respondent’s period of absence from the property because at that time the Respondent was not sharing the property with the Applicant.[46]In the tribunal’s opinion the exemption applies only to genuine house sharing arrangements. Whilst temporary absence for a holiday would not trigger the requirement for a selective licence a prolonged absence, which commenced prior to the Applicant’s occupation in the opinion of the tribunal would.[47]The tribunal considers that the Respondent was only present at the property during the weeks of 7th October – 30th November 2022.[48]However, it also agrees with the Applicant that during those weeks no selective licence was required as at that time the Applicant was sharing the property with the Respondent landlord.[49]During the period when there were three occupiers of the property there was a requirement for an additional licence. 9 Is the tribunal satisfied beyond reasonable doubt that the Respondent has committed the alleged offence?[50]The Applicant says that while she was in occupation the property was additionally occupied as follows: Dave Parkinson lived at the Property before the Applicant moved in and moved out by early July 2022. Gemma Eshkeri lived at the Property from 14th September 2022 and continued to reside at the Premises after the Applicant moved out. Jane Houghton (The Respondent) lived at the Property from 7th October 2022 until 30th November 2022. She was out of the country again from 1st December 2022 until July 2023. Katy Dinkins lived at the Property from 26th February 2023 and continued to reside at the Premises after the Applicant moved out.[51]The Applicant argues that as a result the Respondent committed the licensing offences as follows:[52]During the period of 1st March 2022 until 7th October 2022 and from 30th November until 26th February 2023 the property required a selective licence.[53]This is because the property is in Queens Park, a ward designated by the London Borough of Brent as an area requiring additional licensing.[54]From the period 26th February 2023 until the termination of the Applicant’s occupancy the property required an additional licence.[55]During that latter period the property was occupied by at least three persons living in two or more separate households and occupying the property as their main residence. Their occupation of the subject property constituted the only use of the accommodation.[56]The London Borough of Brent provided confirmation to the Applicant that it had at no time received an application to licence the property as an additional HMO.[57]The Respondent accepts that the property required licensing during the period there were three occupiers living in two or more separate households, but disputes that the property ever required selective licensing. 10[58]The Respondent told the Tribunal she relied on advice received from Brent Council which is discussed below.[59]The occupation of the third occupier, Katy Dinkins was supposed to be temporary and was provided to help out her sister, and Ms Dinkins was her sisters nanny. Ms Dinkins paid rent, but did not sign an agreement. The decision of the tribunal[60]The tribunal determines that the Respondent has committed the alleged offence. The reasons for the decision of the tribunal[61]The tribunal relies on the evidence from the Applicant about the occupation of the property and the evidence from Brent Council that no application for a licence had been received from the Respondent.[62]It also relies on its findings about the requirements of selective and additional licensing.[63]It notes that the Respondent did not dispute the need for an additional licence for the period from 26th February 2023. Does the Respondent have a ‘reasonable excuse’ defence?[64]Whilst the Respondent did not specifically argue that she had a ‘reasonable excuse ’ defence her statement of case indicated that she was unaware of the obligation to licence the property if it was multi-occupied.[65]The Respondent said she was unaware of any legal violations until she heard from Brent Council on May 24th 2023.[66]The Respondent provided the relevant email communications after the conclusion of the hearing.[67]The tribunal also noted that the Respondent had suffered some personal difficulties, the loss of her stepmother and the illness of her sister in Kenya. Whilst the tribunal is sympathetic to the Respondent the tribunal did not consider that the difficulties provided a reasonable excuse defence. 11 The decision of the tribunal[68]The tribunal determines that the Respondent has not got the benefit of a reasonable excuse defence. The reasons for the decision of the tribunal[69]The tribunal does not accept that ignorance of the law constitutes a reasonable excuse defence.[70]The Respondent did not seek advice on the need for a licence until the issue was raised by the Applicant after the termination of the tenancy. Should the tribunal make an award of a RRO? If so, for what amount? The exercise of its discretion[71]The Applicant urged the tribunal to exercise its discretion and make an award of an RRO. The Applicant argued that it was clear that the Respondent had committed an offence and in those circumstances an award should be made.[72]The Respondent argued that all she had ever done was to let out rooms in her home which she believed she was able to do.[73]She also notes that Brent Council has taken no action against her. The decision of the tribunal[74]The tribunal determined to exercise its discretion and make an award of an RRO. The reasons for the decision of the tribunal[75]The tribunal considered that this was an appropriate case for it to exercise its discretion and make an award of an RRO because of the disregard for the law shown by the Respondent.[76]It notes that the Respondent has admitted that a licence was needed when there were three occupiers. 12 The maximum amount of the RRO[77]The Applicant provided evidence that she had paid rent of £950 pcm during the period of the claim. This totals £11,400.00.[78]The Applicant gave evidence that she had received housing costs through Universal Credit for the relevant period which totalled £5,576.70.[79]The Applicant paid for utilities in addition to her rent. The Respondent paid council tax.[80]Therefore, the Applicant argues that the maximum RRO payable is £5,823.30 which is the sum which is reclaimable by the tenant using the DLGC Guidance Annex A. The remainder of the sum could have been reclaimed by the local housing authority however such action is now out of time.[81]The Applicant referred the tribunal to the decision 34 Sarsfield Road, Perivale,Greenford, Middlesex UB6 7AE LON/00AJ/HMF/2018/0053to argue that she is entitled to recover any rent paid in any 12 months during which the offence was committed.[82]The Respondent suggested that the Applicant may have received more Universal Credit than was evidenced before the tribunal but was not able to substantiate that allegation.[83]The Respondent asked that council tax be deducted from the maximum amount of the RRO. The decision of the tribunal[84]The tribunal determines that the maximum award that can be made is £5823.30 The reasons for the decision of the tribunal[85]In the light of the decision in 34 Sarsfield Road, Perivale, Greenford, Middlesex UB6 7AE LON/00AJ/HMF/2018/0053 the tribunal accepts that a Rent Repayment order for a period totalling 12 months can be made even if that period exceeds 12 consecutive months.[86]The tribunal accepts the evidence of the Applicant in relation to the payment of Universal Credit.[87]The Respondent provided no evidence of her payment of Council Tax for the period in question, although she did provide the Council Tax 13 statement for 2023/2024 and evidence for some payments in 2024 outside the period nor did she provide any calculation as to what amount of Council Tax paid could be attributed to the occupation of the Applicant. In the light of this the tribunal determined not to reduce the maximum amount payable for any payment of council tax by the Respondent. The conduct of the tenant[88]The Applicant argues that she has conducted herself well, complied with the terms of the agreement and paid her rent on time and in full.[89]The Respondent says that the Applicant was difficult with at times challenging behaviour. The Respondent had to chase the Applicant to pay bills. The Respondent was also annoyed that the Applicant was seeking to change utility suppliers without her permission which led to her terminating the Applicant’s occupation of the property.[90]She acknowledged that the Applicant had complained about cleaning, up after David Parkinson including the toilet and that the Respondent therefore asked him to find somewhere else. The conduct of the landlord[91]The complaints of the Applicant are(i) The Respondent provided a licence agreement when the Applicant was entitled to an AST.(ii) The Respondent failed to provide a how to rent guide, the EPC for the property or gas or electrical safety certificates and there was no protection for her deposit.(iii) There was not appropriate fire prevention provision.(iv) The bathroom was small and poorly ventilated and there was no sink in the WC.(v) There were problems with Wifi/internet in the flat.(vi) There were problems with the fridge freezer[92]The Respondent says that the property is a large flat with a large attic which did not need planning permission and was converted in about 2004 when she laid a floor and insulated the roof. 14[93]She told the tribunal that the kitchen is modern and fitted with a washing machine a dryer a dishwasher, large fridge freezer and a 5 ring cooker. She said that the kitchen is big enough to fit four chairs, a table and a two-seater sofa. The financial circumstances of the Respondent[94]The Respondent told the tribunal that she was not a wealthy person, that the property was her only property and that she has a mortgage at an unfavourable rate and is unable to move it due to her age.[95]The Respondent provided evidence of her financial circumstances after the tribunal hearing with the permission of the tribunal.[96]The information provided showed a monthly rental income of £1017, personal expenditure of £888.49 pcm and debts of just under £10.000.[97]The Respondent has a savings account showing savings of approximately £16,000 and an outstanding balance on her mortgage of approximately £50,000.[98]The Applicant commented on the information as follows:(i) The Respondent’s property is worth at least approximately £400,000 and could release some equity to pay any award.(ii) The property could continue to be let raising a decent rent(iii) There is no evidence as to why the Respondent is not currently employed and no evidence about future intentions.[99]The Applicant says that nothing the Respondent has disclosed shows that she would face financial hardship if ordered to pay the maximum amount of an RRO. Submissions of quantum[100]The Applicant’s representative argued that the tribunal should make an award for the vast majority if not all of the rent paid. 15[101]The Respondent argued that no award should be made as she was not a professional landlord but simply letting out rooms to help meet expenses and to help people out. The decision of the tribunal[102]The tribunal determines to award a RRO at 70% of the maximum RRO payable ie £4076.31. The reasons for the decision of the tribunal[103]There is extensive case law on how the tribunal should reach a decision on quantum of a rent repayment order. In reaching its decision in this case the tribunal has been guided by the very helpful review of the decisions in the Upper Tribunal decision Newell v Abbott and Okrojek [2024] UKUT 181 (LC).[104]Acheampong v Roman (2022) UKUT 239 (LC) established a four stage approach which the tribunal must adopt when assessing the amount of any order. The tribunal in this case has already taken the first two steps that the authorities require by ascertaining the whole of the rent for the relevant period and subtracting any element of that sum that represents payment for utilities that only benefitted the tenant. The figure in this case is £5,832.30.[105]Next the tribunal is required to consider the seriousness of the offence in comparison with the other housing offences for which a rent repayment order may be made. The failure to licence a property is one of the less serious offences of the seven offences for which a rent repayment order may be made.[106]However, although generally the failure to licence is a less serious offence, the Upper Tribunal recognises that even within the category of a less serious offence, there may be more serious examples.[107]In this case the tribunal considered that the case is a moderately serious example of one of the less serious offences in which a rent repayment order may be made.[108]The reasons for this are as follows:(i) The landlord has shown a disregard for the law, providing a sham licence(ii) Whilst the evidence from the Applicant is that the property was not in a poor condition, the property was small with only one bathroom and was not 16 appropriate for strangers to share. It is clear from the evidence that this led to tensions between the occupiers of the property.(iii) The configuration of the loft room was of great concern to the tribunal as it appeared to present a significant fire risk since it was not separated from the staircase which lead up to the attic from the first floor landing.(iv) There was no door to the kitchen which was off the landing at first floor level and no fire blanket provided, presenting further fire risk. There was no evidence of smoke alarms within the property.[109]The tribunal decided not to reduce the amount payable because of the conduct of the tenant. The sort of behaviour complained of, for instance arguing with a flat mate, or treating the property as if it were her own, are behaviours that are the result of, in the first instance, living with a stranger and in the second instance the long-term absence of the Respondent.[110]The tribunal determined not to reduce the amount payable because of the Respondent’s financial circumstances. It notes that the Applicant’s claim is already reduced by Universal Credit and it also has taken into account the Applicant’s comments on the financial information.[111]At this stage the tribunal considers that a RRO of 70% of the maximum RRO is appropriate and does not consider that any further deductions should be made.[112]The tribunal also orders that the application and hearing fees paid by the Applicant are refunded. Name: Judge H Carr Date: 23rd January 2025 17 Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. 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 Tribunal at the regional office which has been dealing with the case. 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. If the application is not made within the 28-day time limit, such application must include a request for 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. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. 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. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).