Flat 62 Godwin Court, Crowndale Road, London NW1 1NW: LON/00AG/HMF/2018/0004 LON/00AG/HMF/2018/0004
DECISION
The Tribunal makes the following rent repayment order (‘RRO’):(a) The respondent shall repay the total sum of £4,340 (Four Thousand, Three Hundred and Forty Pounds) to the applicants.(b) The sum of £4,340 is to be repaid to the applicants by 19 November 2018. The application and procedural history[1]The Tribunal received an application for a RRO on 21 June 2018. The application relates to Flat 62 Godwin Court, Crowndale Road, London NW1 1NW (‘the Property’). The applicants were tenants of the Flat from 01 September 2017 to 31 August 2018 and allege that the Property was an unlicensed House in Multiple Occupation (‘HMO’) for the duration of their tenancy.[2]The application was made under section 40 of the Housing and Planning Act 2016 (‘the 2016 Act’) and named the respondents as “Victorstone Property Consultants Ltd. (Agency), Farhana Rahman (Landlord)”. The relevant part of section 40(2) of the 2016 Act provides that an RRO “…is an order requiring the landlord under a tenancy of housing in England to - (a) repay an amount of rent paid by a tenant…” Accordingly, this application has proceeded solely against Ms Rahman, as the landlord. She is referred to as the respondent for the remainder of this decision.[3]The Tribunal issued directions on 04 July 2018. Paragraphs 2-5 dealt with the bundles of documents to be filed and served by the parties. Paragraph 3(vii) spelt out that the respondent’s bundle must include “Evidence of any outgoings, such as utility bills, paid by the landlord for the let property”.[4]Paragraphs 6-10 of the directions dealt with the hearing and inspection arrangements. Originally the application was listed for an oral hearing on 03 October 2018 and hearing notices were sent out on 07 August 2018. The applicants requested a paper determination, which the respondent consented to in her statement of case. This request was granted on 21 August and the paper determination took place on 03 October 2018.[5]The Tribunal members were each supplied with two bundles of documents; one from the applicants running to 121 pages and one from the respondent’s solicitors running to 43 pages. The latter omitted evidence (or even details) of the outgoings for the Property, contrary to paragraph 3(vii) of the directions. The Tribunal decided the application based on the documents in both bundles and the information in the application form.[6]The relevant legal provisions are set out in the appendix to this decision. The background[7]The Property is a flat in a purpose built, local authority block, comprising a kitchen, bathroom and four bedrooms. It is located in the London Borough of Camden.[8]The respondent is one of two joint leaseholders of the Property; with the other being her mother (Ms Hasina Naher). The respondent lives in Swansea and used London letting agents, Victorstone Limited, which trades under the name Victorstone Property Consultants) (‘VPC’) to let and manage the Property.[9]Camden Council (‘the Council’) introduced an additional HMO licensing scheme on 08 December 2015. All HMOs in the Camden borough must be licensed and licensable HMOs include shared houses and individual flats occupied by three or more unrelated tenants, who form more than one household.[10]The applicants are all students and were granted an assured shorthold tenancy (‘AST’) of the Property on 31 August 2017. This was for a term of 12 months from 01 September 2017 at a rent of £3,033.33 per month. Their bundle included a copy of the tenancy agreement, which was granted solely by the respondent. The tenancy was arranged by VPC.[11]The applicants moved into the Property on 01 September 2017 and discovered a number of issues including a failure to clean, wall surfaces covered in mould, peeling paintwork, damaged furniture and missing door and window handles. Many of these issues were identified in the tenancy inventory and some were acknowledged in an email from Tricia Colandrea (of VPC) to the applicants dated 01 September 2017.[12]VPC arranged temporary alternative, accommodation for the period 01-07 September, so it could address these issues. The applicants moved back in on 07 September, by which time the Property had been cleaned. Redecoration and repairs were undertaken between 10 and 16 September. VPC’s contactors, the CANDO Group, sent an email to the 4th applicant on 08 September, listing the issues to be addressed. This included the missing window handles. Two of the applicants moved out during the redecoration and repair works, due to the disruption[13]The applicants wrote to VPC on 12 November 2017, complaining of delays and poor service. They also gave details of the poor condition of the Property at the start of the tenancy and the disruption caused by the redecoration and repair works. They requested compensation for the period 01-16 September, in the form of a deduction from their rent of £1,600. It appears that no deduction was agreed, as the applicants paid the rent at £3,033.33 per month for the full 12 months of the tenancy.[14]The applicants contacted the Council in February 2018, as they could not find the Property listed on the HMO Licensing Register on the Council website.[15]On 26 February 2018 the Mr Andrew Woolmar of the Council wrote to the respondent and referred to the borough-wide HMO licensing scheme. The letter explained that she must apply for a licence if the Property fell within the definition of an HMO. It also asked her to contact the Council, if she thought the Property did not require a licence.[16]Mr Ifrah Abdirahman of the Council sent a follow up letter to the respondent on 29 May 2018, reiterating the need to submit a licence application. The application was submitted by VPC on 19 June 2018. As at the date of the respondent’s statement of case (16 August 2018) that application had not been decided. Evidence and submissions[17]The applicants’ submissions were set out in an undated statement of case, which referred to various documents in their bundle. They seek an RRO in respect of all rent paid during their tenancy, which totalled £36,399.69 (12 months @ £3,033.33). No housing benefit was paid in respect of this rent.[18]The applicants contend that the respondent and VPC committed an offence under section 72(1) of the Housing Act 2004 (‘the 2004 Act’), by controlling or managing an unlicensed HMO for the duration of the tenancy. As to the condition of the Property, the applicants acknowledge it was cleaned, redecorated and repaired during the period 01-16 September 2017. However, the missing window handles were not replaced, which they raised in their letter of 12 November 2017. They subsequently complained of mice in the Property (in May 2018), using VPC’s online reporting system.[19]The applicants complain that some of the HMO licence requirements were not satisfied for the duration of their tenancy. These failings included:(a) There was only one, battery powered fire alarm;(b) There were no fire safety doors;(c) There were no security lights; and(d) Some of the windows could not be closed due to the missing handles.[20]The applicants submit that the failure to licence was more than an oversight. The respondent had a financial incentive to avoid licensing, due to the substantial cost of meeting the HMO standards. Furthermore VPC must have known of the licensing requirement, due to its size and professional experience.[21]The applicants also rely on the delay in submitting the licence application, after the initial Council letter dated 26 February 2018. They submit this was negligent and could not be justified by any ignorance on the part of the respondent or VPC’s internal problems (see paragraphs 29 and 30 below).[22]The respondent’s submissions were set out in a statement of case headed “RESPONSE TO APPLICATION” dated 16 August 2018. This was supported by a witness statement from Fokrul Islam of VPC, of the same date.[23]The respondent’s starting point is that she is not a professional landlord. The Property is the first rental property that she has let out and she was unaware of the licensing requirements and relied on VPC for guidance and advice.[24]The respondent promptly forwarded the Council’s letters of 26 February and 29 May 2018 to VPC and expected VPC to deal with these. She provided VPC with information for the licence application on 19 March 2018 and the delay in submitting the application was due to the agents’ internal problems.[25]The application was submitted on 19 June 2018 and was valid as at 16 August, as it had not been decided or withdrawn (section 72(8) of the 2004 Act).[26]The respondent contends that despite the absence of a licence, the applicants had not complained “…of any other substantive issues…” and it was “…evident that the Property is in good, habitable condition and that all other requirements are strictly complied with by both the Respondent and the Agents.”[27]The respondent relies on section 72(5) of the 2004 Act and submits that there was a reasonable excuse for the failure to licence, namely her lack of professional experience (as a landlord), reliance on VPC and the submission of the licence application on 19 June. She submits that no RRO should be made or it should be capped. She also makes the point that she has not been prosecuted in relation to her failure to licence or for any other offence relating to the Property.[28]Ms Akram is the managing director of Victorstone Limited and has “..a familiar relationship with the Respondent…”. VPC collect rent for the Property and arrange and deal with repairs. Ordinarily it does not deal with licensing.[29]In her statement, Ms Akram explained that one of VPC’s directors (Mr Hallou) resigned in acrimonious circumstances on 06 February 2018. This had a negative impact on the business and led to the closure of a branch office. Mr Robert Leigh was subsequently appointed as Head of Property Management at VPC and took up this post in March 2018.[30]One of Mr Leigh’s duties was to assist landlords with HMO licensing and it was he who requested the further information from the respondent on 19 March 2018. He then had a long period off work, for surgery to both knees and a period of recuperation. He returned to work in late May or early June. Due to the problems caused by Mr Hallou’s departure, there were no contingencies for dealing with Mr Leigh’s absence and the licence application was overlooked. When he returned he had to catch up with a backlog of work, which resulted in a further delay in submitting the application.[31]Ms Akram expects the licence application to be granted, as “…the Property is in good habitable condition…”. She also stated that the applicants “…had not raised any complaints with us during the time of their tenancy at the Property in our capacity as agents.” Findings[32]The Tribunal finds that the respondent granted an AST of the Property on 31 August 2017 and was the applicants’ landlord from 01 September 2017 to 31 August 2018. It also finds that the Property was a licensable HMO for the duration of this tenancy, being a flat occupied by four unrelated tenants who form more than one household. There was no licence during the tenancy.[33]The respondent has not been convicted of any offence in relation to the Property. However, the Tribunal is satisfied (beyond a reasonable doubt) that an offence has been committed under section 72(1) of the 2004 Act in that the respondent controlled an unlicensed HMO. The Tribunal does not accept there was a reasonable excuse for this failure to licence. The respondent’s ignorance of the Council’s licencing requirements is no excuse. The Property generated a substantial rent (over £36,000 per annum) and she should have ensured that all local authority requirements were met before letting it out. Further, she had appointed professional letting agents who knew (or should have known) that an HMO licence was required and should have advised her of the need to licence.[34]The internal management problems at VPC only account for the delay in submitting the licence application between March and June 2018 and do not justify the failure to licence from September 2017 to February 2018. VPC should have had systems in place to check whether properties under their management required a licence and, if so, to ensure that a licence is obtained (or an application made) before any letting was arranged. Furthermore, it should have had systems in place to deal with staff absences and there is no reasonable excuse for the delay in submitting the application.[35]The Property ceased to be an unlicensed HMO on 19 June 2018, by virtue of sections 73(1) and (2) of the 2004 Act, as this was the date the licence application was made. There was no evidence to suggest the application subsequently ceased to be effective.[36]It follows that the offence occurred between 01 September 2017 (the start date of the tenancy) and 18 June 2018, which is a period of 291 days. The Tribunal’s decision[37]Having satisfied itself that an offence had been committed under section 72(1) of the 2004 Act, the Tribunal considered whether to make an RRO. Given the findings at paragraphs 33 and 34, it is appropriate to make such an order.[38]When deciding the amount of the RRO, the Tribunal had regard to the conduct of the parties and all the circumstances of the case. It could not take account of the respondent’s financial circumstances or the outgoings for the Property, as no such details were provided by the respondent.[39]The respondent has not been convicted of any offence but there has been misconduct on her part in that she let the Property without a licence and it was dirty and required redecoration and repairs when the tenancy commenced. Most of the problems were rectified by 16 September 2017 but the missing window handles were not replaced.[40]The Tribunal accepts the respondent is not a professional landlord and she did not deliberately flout the HMO licence requirements. It also accepts the Property was in reasonable condition, with the exception of the missing window handles and the mice issue, from 16 September onwards. There is no evidence that the applicants complained about the fire alarm or the absence of fire safety doors or security lights, during the tenancy.[41]The applicants have acted reasonably throughout and showed considerable forbearance in moving out for the first week of the tenancy and then putting up with the upheaval of the redecoration and repair works.[42]Having regard to all of these factors, the appropriate order is that the respondent should repay 100% of the rent from 01 to 16 September 2017 and 10% of the rent from 17 September 2017 to 18 June 2018. The sum to be repaid for the first period is £1,595.68 (16 days @£99.73 per day) and the sum to be repaid for the second period is £2,742.58 (275 days @ £9.973 per day). It follows that the total sum to be repaid is £4,338.26, which the Tribunal rounded up to £4,340 (Four Thousand, Three Hundred and Forty Pounds). Name: Tribunal Judge Donegan Date: 22 October 2018