Harrison Saul Baines-HiltonApplicantMichael CourtneyRespondent
Before
Judge TuejeMs Rachael Kershaw BScIn person for the ApplicantIn person Application for a rent repayment order by the licencee: sections 40, 41, 43 and for the RespondentVenue 10 Alfred Place, London WC1E 7LRDate 14 June 2024Hearing 2024-05-14Property: 765a Fulham Road, London, SW6 5HAType of application: 44 of the Housing and Planning Act 2016 Judge Tueje
DECISION
In this determination, statutory references relate to the Housing Act 2004 unless otherwise stated. Decisions of the Tribunal[1]The Tribunal find that the Respondent did commit an offence under section 72(1) without reasonable excuse.[2]The Tribunal makes a rent repayment order against the Respondent for the period 14th June 2022 to 13th June 2023 in the sum of £5,252.80, which is to be paid to the Applicant within 28 days of the date this Decision is sent to the parties.[3]The Tribunal determines that the Respondent shall pay the Applicant £300 within 28 days of the date this Decision is sent to the parties, in respect of the reimbursement of the tribunal fees paid by the Applicants pursuant to rule 13(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.[4]The reasons for the Tribunal’s decisions are given below. The Application[1]This Application for a rent repayment order is dated 21st July 2023, and is made under section 41 of the Housing and Planning Act 2016 by Mr Baines-Hilton, who was the licencee. The Tribunal received the application on 1st September 2023. Mr Baines-Hilton claims a repayment order of £9,150, being the total amount of all payments made to Mr Courtney during the 12 months ending on 13th June 2023.[2]The Application relates to the property known as 765a Fulham Road, London, SW6 5HA (“the Property”), which is a 5-bedroom maisonette.[3]The Application is made against Mr Courtney, who, with his partner Mr Craig Funke, are the regulated tenants of the Property.[4]By an order dated 10th November 2023 the Tribunal gave directions, including provision for the parties to each prepare separate bundles for the hearing containing supporting documents and an expanded statement of reasons for the application. Subsequently, the Tribunal listed the final hearing on 14th May 2024. The Hearing[5]Neither party requested an inspection of the Property by the Tribunal, and the Tribunal did not consider one was necessary or proportionate.[6]Mr Baines-Hilton prepared a 35-page bundle for use at the hearing containing the following witness statements:6.1 His unsigned and undated witness statement;6.2 A signed witness statement from Eamonn Wylie; and6.3 A signed witness statement from Jacob Pritchard dated 14th January 2024.[7]None of the above statements contained a statement of truth, and the majority of Mr Wylie and Mr Pritchard’s statements were a verbatim repetition of part of Mr Baines-Hilton’s statement.[8]Mr Courtney did not provide a witness statement, bundle of documents, nor any supporting evidence in accordance with the 10th November 2023 directions order.[9]Mr Baines-Hilton and his two witnesses attended the hearing. He asked for permission to adduce further written evidence to support his case. He confirmed the additional documents were available to him earlier, but he only recently considered they could be useful for the hearing.[10]Mr Courtney attended the hearing accompanied by Mr Funke.[11]Mr Courtney asked for the hearing to be postponed for a few days so that he could collate the e-mails and texts he wanted to rely on in opposing the Application. He explained he had received the directions order. However, he had not responded to the Application or submitted any documents or evidence because he had tried unsuccessfully to speak with the Tribunal’s staff members: he tried telephoning and visiting the Tribunal but was unable to speak to anyone.[12]Mr Courtney also stated he had not received Mr Baines-Hilton’s hearing bundle as it had been sent to an e-mail address no longer used.[13]The Tribunal dealt with the above issues as follows:13.1 Mr Baines-Hilton’s request to adduce further documentation was refused. The documents could have been provided earlier, and to provide them at this stage would put Mr Courtney at an unfair disadvantage.13.2 Mr Courtney’s request for an adjournment was refused, which also meant he was unable to adduce any documentary evidence. The Tribunal’s reasons were the directions order made clear what the parties needed to do to prepare for the hearing. Mr Courtney gave no explanation why he couldn’t follow those directions. We also took into account that Mr Baines-Hilton informed us he had lost a day’s pay to attend the hearing, and his two witnesses had taken the day off work to attend. Accordingly, adjourning the hearing would be contrary to the overriding objective.13.3 As to the hearing bundle, it comprised 35 pages, 20 pages of which consisted of the Application and the directions order, which Mr Courtney had already seen. It contained Mr Baines-Hilton’s and his witnesses’ statements, which in large parts had identical wording. The Tribunal provided photocopies of the bundle to Mr Courtney and Mr Funke, and put the hearing back to 1.30pm, allowing Mr Courtney almost 3 hours to prepare. The Tribunal considered that would be sufficient time to prepare, making postponement more proportionate than an adjournment.[14]Mr Baines-Hilton clarified the Application is against Mr Courtney only.[15]Before hearing any evidence, the Tribunal confirmed whether Mr Baines-Hilton and Mr Courtney were ready to begin; both confirmed they were.[16]The Tribunal heard evidence from Mr Baines-Hilton and his witnesses, Mr Eamonn Wylie and Mr Jacob Pritchard. Mr Courtney and Mr Funke also gave evidence. Followed by submissions from both sides. The Background[17]The Property is on the first and second floor of a Victorian mixed-use building, which has commercial premises on the ground floor.[18]The accommodation comprises two bedrooms, two reception rooms, a kitchen and toilet on the first floor, with three bedrooms and a bathroom on the second floor.[19]Mr Courtney and Mr Funke have lived in the Property since around 1965, and they are regulated tenants paying a fair rent. Mr Courtney stated that until recently the rent was £2,000 per calendar month, but is now £2,300. According to him, the other outgoings annually are:• Gas - £2,oo0;• Electricity - £6,000;• Water - £750;• Internet - £840; and• Telephone - £276.[20]The above utilities amount to £9,866.00 per year, or £822.17 per month. Mr Baines-Hilton did not challenge these figures, and in the Tribunal’s experience, these figures are consistent with the evidence regarding the Property and the number of occupants.[21]Of the five bedrooms, Mr Courtney and Mr Funke occupy one bedroom, and up to the date Mr Baines-Hilton vacated, all other bedrooms were rented out.[22]Mr Baines-Hilton was a licencee of the Property. He rented a room in the Property from Mr Courtney and Mr Funke from 14th February 2021, initially paying £700 per month, which included all bills. He also paid £700 as a deposit which by agreement, was used as the last month’s rent.[23]The parties agreed that rent was payable on the 14th of each month which covered the period up to 13th of the following month.[24]Mr Baines-Hilton’s rent increased to £850 per month in December 2022, and remained at £850 until he left in June 2023. All rent payments were credited to Mr Courtney’s bank account. Mr Baines-Hilton provided print outs from his bank account showing he paid the agreed amounts up to and including April 2023. His deposit was used to pay the last month’s rent payable in May 2023, which covered the period up to 13th June 2023.[25]Mr Courtney and Mr Funke let out all the bedrooms in the Property except for the one they occupied. The occupants of each room were separate households. Although the Application stated that for the most of Mr Baines-Hilton’s occupancy all 5 bedrooms in the Property were occupied, his oral evidence was that all rooms were occupied throughout his stay. And while there were some differences in the parties’ evidence as to who occupied the Property at specific times, it was common ground that the 4 bedrooms were let out to individuals separately throughout Mr Baines-Hilton’s occupancy.[26]Since around March 2023, occupiers of the Property were in contact with Ann Antrobus, the Private Housing Standards Officer at Hammersmith and Fulham council. They discussed with her various issues regarding the Property. As a result of what she was told, Ms Antrobus informed Mr Courtney that he must either obtain an HMO licence to continue letting out all bedrooms, or let out no more than two bedrooms. Mr Courtney’s evidence is he chose to reduce the number of occupiers, which Mr Baines-Hilton doesn’t dispute.[27]In light of the above, the issues for the Tribunal to determine are as follows:27.1 Whether Mr Courtney committed an offence under section 72(1) as a result of the following:(i) being in control of or managing the Property;(ii) the Property being an HMO;(iii) Whether a licence was required for the Property; and(iv) If so, whether there was a licence for the Property.27.2 If the elements of the offence at paragraphs 27.1(i) to 27.1(iv) above are met, during the period in which the offence was committed, did Mr Courtney have a defence to the commission of the offence under section 72(4) and/or 72(5) of the 2004 Act?27.3 If an offence has been committed, the maximum amount of rent repayment order that can be ordered under section 44(3) of the 2016 Act.27.4 Whether Mr Courtney had been responsible for the cost of any utilities at the Property.27.5 The severity of the offence.27.6 Any relevant conduct of Mr Courtney, his financial circumstances, whether he has any previous convictions of a relevant offence, and the conduct of Mr Baines-Hilton to which the Tribunal should have regard in exercising its discretion as to the amount of the rent repayment order. The Tribunal’s Decision and Reasons[28]The Tribunal reached its decision after considering the witnesses’ oral and written evidence, including documents referred to in that evidence, and taking into account its assessment of the evidence[29]As appropriate, and where relevant to the Tribunal’s decision the evidence is referred to in the reasons for the Tribunal’s decision.[30]This determination does not refer to every matter raised by the parties, or every document the Tribunal reviewed or took into account in reaching its decision. However, this doesn't imply that any points raised or documents not specifically mentioned were disregarded. If a point or document was referred to in the evidence or submissions that was relevant to a specific issue, it was considered by the Tribunal.[31]The relevant legal provisions are set out in the Appendix to this decision. The offence under section 72(1) Housing Act 2004[32]The Tribunal is satisfied beyond reasonable doubt that all the elements of the offence under section 72(1) are proved, as set out at paragraphs 33 to 39 below.[33]We find Mr Courtney had control of the Property as defined by section 263(1), which states a person is in control of premises where they receive the rack-rent. It is not disputed that Mr Baines-Hilton paid the rent directly in to Mr Courtney’s bank account, and the Tribunal as seen bank print outs showing the payments he made.[34]We are also satisfied beyond reasonable doubt that the property meets the self-contained flat test, and is therefore an HMO as defined by section 254(3), for the following reasons:34.1 The Property is a self-contained flat;34.2 It is occupied by individuals who do not all form part of the same household;34.3 There were 5 households occupying the Property throughout Mr Baines-Hilton’s occupancy;34.4 Those individuals occupied the property as their only or main residence;34.5 Their occupation of the Property was the only use of the Property;34.6 The individuals who occupied the Property, including Mr Baines-Hilton, paid rent; and34.7 As there was one kitchen, one combined toilet and bathroom, and a separate toilet, more than two households shared basic amenities.[35]Mr Courtney objected to the principle that his home, which he had been opened to many over the years, should be subject to licensing as an HMO. We remind ourselves the landlord needs to prove the defence of reasonable excuse on a balance of probabilities. However, even on the lower standard, we do not find this or any other aspect of the case amounts to a reasonable excuse.[36]As there were 5 households living in the Property throughout Mr Baines-Hilton’s occupation, it meets the description of an HMO at paragraph 4(a) of the Licensing of Houses of Multiple Occupation (Prescribed Description) (England) Order 2018.[37]As an HMO, the Property required a mandatory licence under section 61, and section 72(1) makes it an offence for a person to have control premises which requires a licence but does not have one.[38]Mr Courtney accepted the Property did not have a licence, and this was indicated by the e-mail in the hearing bundle sent to Mr Wylie on 14th March 2023 by Ms Antrobus[39]In the circumstances, having found that Mr Courtney committed an offence under section 72(1), we also find it is appropriate to exercise our discretion by making a rent repayment order, there being no exceptional circumstances that would justify refusing to make the order. Amount of the Rent Repayment Order[40]In its decision in Acheampong v Roman and others [2022] UKUT 239 (LC), the Upper Tribunal recommended a four-stage approach to determine the amount of the rent repayment order, that approach is summarised as follows:40.1 ascertain the whole of the rent for the relevant period;40.2 subtract any element of that sum that represents payment by the landlord for utilities that only benefited the tenant/licencee;40.3 consider how serious this offence was, both compared to other types of offence in respect of which a rent repayment order may be made and compared to other examples of the same type of offence; and40.4 consider whether any deduction from, or addition to, that figure should be made pursuant to section 44(4) of the 2016 Act in the light of the parties’ conduct, the landlord’s financial circumstances and whether the landlord has previously been convicted of an offence to which Chapter 4 of the 2016 Act applies.[41]The Tribunal has adopted the approach recommended in Acheampong v Roman and others.[42]We find the period of the offence was 14th June 2022 to 13th June 2023, being the 12-month period prior to Mr Baines-Hilton moving out.[43]Mr Baines-Hilton is seeking repayment of the total amount paid to Mr Courtney during the last 12 months of his occupancy. He calculates this to be £700 x 7 months, plus £850 x 5 months, amounting to £9150.00. These calculations include the sums paid towards the utilities which Mr Baines-Hilton would have benefited from using.[44]Mr Baines-Hilton’s bank print out confirms he paid the amount claimed as follows:• June 2022 £700• July 2022 £700• August 2022 £700• September 2022 £700• October 2022 £700• November 2022 £700• December 2022 £850• January 2023 £850• February 2023 £850• March 2023 £850• April 2023 £850• May 2023 £0 (but £700 paid as deposit would be credited towards the amount due).[45]As the agreed position is that there were 6 occupants throughout Mr Baines-Hilton’s residency, we consider it appropriate to deduct 1/6th of the cost of utilities to arrive at the maximum amount of the rent repayment order. Based on the monthly cost of utilities at paragraphs 19 and 20 above, we deduct £1,644.24 for 12 months, or £137.02 per month to allow for Mr Baines-Hilton’s share of the utilities.[46]Accordingly, the maximum amount repayable is £9,150 - £1,644.24 = £7,505.76.[47]In fixing the appropriate sum the Tribunal had regard to Acheampong v Roman and others and the decision in Hallett v Parker [2022] UKUT 165 (LC). We have also taken into account that proper enforcement of licensing requirements against all landlords, good and bad, is necessary to ensure the general effectiveness of the licensing system and to deter evasion.[48]Regarding the seriousness of the offence in this application, namely the failure to obtain a selective licence, we find this is at the lower end when compared to other offences for which a rent repayment order may be made. We consider this offence was also committed out of ignorance rather than due to wilful evasion of the selective licensing scheme.[49]Mr Courtney also took steps to ensure the number of lodgers were no more than two when he became aware an HMO licence would otherwise be required.[50]Mr Baines-Hilton complained about various aspects of the Property’s condition, the most significant were regarding fire safety. He complained there were no fire extinguishers, which Mr Courtney accepted. He said the lock to the entrance door was defective, and they often used a skewer when their key didn’t work, which would delay escape in the event of a fire. Mr Courtney didn’t dispute the door was defective, but didn’t consider this to be particularly serious. Mr Baines-Hilton also complained that the smoke alarms and fire detectors had been deactivated to stop them going off, which Mr Courtney disputed. Based on our assessment of their evidence, we find it likely that the smoke detectors and fire alarms were deactivated, because this is more consistent with Mr Courtney’s somewhat relaxed attitude to the potential safety risks caused by the defective door.[51]We are not persuaded that Mr Courtney’s behaviour towards Mr Baines-Hilton and other occupiers was threatening, harassing or problematic so as to justify increasing the amount awarded. We consider tension between the occupiers is more accurately characterised as a personality clash. For instance, one example given of Mr Courtney’s problematic behaviour was that he wanted everyone to greet each other when saw each other around the Property, whereas for various reasons, other occupiers may not always feel like doing so.[52]The written evidence from Mr Wylie and Mr Pritchard also described abuse and harassment, but their written and oral evidence provided no specific examples of behaviour meeting that threshold.[53]Mr Baines-Hilton also complained about harassment after he left the Property. He gave examples of Mr Courtney turning up at his place of work and his new address and contacting his mother. We accept Mr Courtney’s explanation for this, which was that because Mr Baines-Hilton had blocked his electronic communications, he had no other way of contacting Mr Baines-Hilton about items he’d left at the Property.[54]In exercising our discretion to determine an appropriate amount, we do not consider the other points made by Mr Baines-Hilton justify increasing the amount awarded. For instance, he complained about standard of cleanliness at the Property.[55]We have taken into account that Mr Courtney confirmed he had modest savings, but he has no earned income because he is of pensionable age, and he is also in poor health, having been diagnosed with diabetes. However, we have also considered the offence was committed throughout the 12 months in respect of which the rent repayment order was made.[56]We are also concerned about the deficiencies in fire safety (see paragraph 50), and consider it appropriate that these failures are reflected in the amount awarded.[57]Furthermore, during the period the offence was committed, Mr Courtney received £2,800 from the 4 rooms let out. During this period, Mr Courtney benefit from the protection of a fair rent, which he says at the time was £2,000 per month. Therefore, the rent received from all occupiers would also cover £800 of the £822.17 paid for utilities.[58]Mr Courtney explained the current position is that his own rent has increased to £2,300 per month, 2 rooms are let out at £850 each, and says that he will need to increase the amount charged.[59]Mr Baines-Hilton paid his rent each month, and we do not consider that he otherwise behaved in a way that would justify a reduction in the amount awarded.[60]Having regard to the total rent for the relevant period, the severity of the offence, the adjustments that we consider should be made in light of factors to which the Tribunal must have regard under section 44(4) of the 2016 Act, the Tribunal makes a rent repayment order against Mr Courtney of £5,252.80, being 70% of the maximum £7,505.76 repayable.[61]The Tribunal would remind the parties that it does not have the power to order the payment of the rent repayment order. It can only determine the amount of the rent repayment order. Name: Judge Tueje Date: 14th June 2024 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). Appendix of Relevant Legislation Housing Act 2004 72 Offences in relation to licensing of HMOs(1) 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 (see section 61(1)) but is not so licensed.(2) A person commits an offence if– (a) he is a person having control of or managing an HMO which is licensed under this Part, (b) he knowingly permits another person to occupy the house, and (c) the other person’s occupation results in the house being occupied by more households or persons than is authorised by the licence.(3) A person commits an offence if– (a) he is a licence holder or a person on whom restrictions or obligations under a licence are imposed in accordance with section 67(5), and (b) he fails to comply with any condition of the licence.(4) In proceedings against a person for an offence under subsection (1) it is a defence that, at the material time– (a) a notification had been duly given in respect of the house under section 62(1), or (b) an application for a licence had been duly made in respect of the house under section 63, and that notification or application was still effective (see subsection (8)).[5]In proceedings against a person for an offence under subsection (1), (2) or (3) it is a defence that he had a reasonable excuse–(a) for having control of or managing the house in the circumstances mentioned in subsection (1), or(b) for permitting the person to occupy the house, or(c) for failing to comply with the condition, as the case may be.[6]A person who commits an offence under subsection (1) or (2) is liable on summary conviction to a fine.[7]A person who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale. (7A) See also section 249A (financial penalties as alternative to prosecution for certain housing offences in England). (7B) If a local housing authority has imposed a financial penalty on a person under section 249A in respect of conduct amounting to an offence under this section the person may not be convicted of an offence under this section in respect of the conduct.[8]For the purposes of subsection (4) a notification or application is “effective” at a particular time if at that time it has not been withdrawn, and either–(a) the authority have not decided whether to serve a temporary exemption notice, or (as the case may be) grant a licence, in pursuance of the notification or application, or(b) if they have decided not to do so, one of the conditions set out in subsection (9) is met.[9]The conditions are–(a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of the appropriate tribunal) has not expired, or(b) that an appeal has been brought against the authority’s decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn.[10]In subsection (9) “relevant decision” means a decision which is given on an appeal to the tribunal and confirms the authority’s decision (with or without variation). Housing and Planning Act 2016 40 Introduction and key definitions(1) This Chapter confers power on the First-tier Tribunal to make a rent repayment order where a landlord and committed an offence to which this Chapter applies.(2) A rent repayment order is an order requiring the landlord under a tenancy of housing in England to – (a) repay an amount of rent paid by a tenant, or (b) pay a local housing authority an amount in respect of a relevant award of universal credit paid (to any person) in respect of rent under the tenancy.(3) A reference to “an offence to which this Chapter applies” is to an offence, of a description specified in the table, that is committed by a landlord in relation to housing in England let to that landlord. Act section general description of offence 1 Criminal Law Act 1977 section 6(1) violence for securing entry 2 Protection from Eviction Act 1977 section 1(2), (3) or (3A) eviction or harassment of occupiers 3 Housing Act 2004 section 30(1) failure to comply with improvement notice 4 section 32(1) failure to comply with prohibition order etc 5 section 72(1) control or management of unlicensed HMO 6 section 95(1) control or management of unlicensed house 7 This Act section 21 breach of banning order(4) For the purposes of subsection (3), an offence under section 30(1) or 32(1) of the Housing Act 2004 is committed in relation to housing in England let by a landlord only if the improvement notice or prohibition order mentioned in that section was given in respect of a hazard on the premises let by the landlord (as opposed, for example, to common parts). 41 Application for rent repayment order (1) 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. (2) 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. 43 Making of a rent repayment order (1) The First-tier Tribunal may make a rent repayment order if satisfied, beyond reasonable doubt, that a landlord has committed an offence to which this Chapter applies (whether or not the landlord had been convicted). (2) A rent repayment order under this section may be made only on an application under section 41. (3) The amount of a rent repayment order under this section is to be determined in accordance with – (a) section 44 (where the application is made by a tenant); 44 Amount of order: tenants (1) Where the First-tier Tribunal decides to make a rent repayment order under section 43 in favour of a tenant, the amount is to be determined in accordance with this section. (2) The amount must relate to rent paid during the period mentioned in the table. If the order is made on the ground that the landlord has committed the amount must relate to rent paid by the tenant in respect of an offence mentioned in row 1 or 2 of the table in section 40(3) the period of 12 months ending with the date of the offence an offence mentioned in row 3, 4, 5, 6 or 7 of the table in section 40(3) a period, not exceeding 12 months, during which the landlord was committing the offence (3) The amount that the landlord may be required to repay in respect of a period must not exceed— (a) the rent paid in respect of that period, less (b) any relevant award of universal credit paid (to any person) in respect of rent under the tenancy during that period. (4) In determining the amount the tribunal must, in particular, take into account— (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 an offence to which this Chapter applies.