Richard WaterhouseDate 20 June 2026Property: 21 Courtland Avenue, Ilford, IG1 3DNType of application: Sections 40, 41, 43, & 44 of the Housing and Planning Act 2016 Judge Shepherd
DECISION
[1]A rent repayment order of £14764.20 is to be paid to the Applicants by the Respondent .The said sum must be paid within 28 days of this decision being issued. The Respondent shall also reimburse the Applicant with their application and hearing fees at a total of £341. This sum is also to be paid within 28 days of this decision being issued. Background[2]The Application for a Rent Repayment was brought by the Applicants who are the former tenants of 21 Courtland Avenue, Ilford, IG1 3DN (“The premises”). The Respondents are the landlords of the premises.[3]The Applicants occupy the premises as assured shorthold tenants protected under the Housing Act 1988. They have resided there since 2022. The last tenancy they agreed was dated 28th July 2025. The rent repayment order is claimed for the period 1st November 2023 – 4th October 2024 (“The relevant period”). The amount claimed is the rent paid during this period which is £26844.[4]The premises is a mid-terraced two storey three-bedroomed house. The Applicants occupy the premises with their two daughters and their adult step daughter.[5]The London Borough of Redbridge in which the premises are located operate a selective licensing scheme. There is no dispute that the Respondents did not hold a license for the relevant period. They had a license previously but this had ended on 12th July 2022. They applied for the current selective license in October 2024. The Applicant’s case[6]The Applicant’s case is that during the relevant period the premises were located within a selective licensing area as designated by Redbridge Council and the Applicants did not have a license.[7]The Applicants do not receive Universal Credit and they pay for the utilities.[8]The Applicants said as well as the licensing breach there was some disrepair. The sash windows in the reception rooms were painted shut preventing a means of escape. These were not remedied by the Respondents until a council officer came to the premises in 2025. The windows themselves are in poor condition. An electrical survey carried out on 27th September 2024 revealed that the light switches in the reception room were not grounded and there was a risk of electric shock. No action was taken by the Respondents in response to this inspection. There was no fire alarm on the first floor. There has been a problem of a leaking roof. The Applicants reported this and the roof was re-tiled in 2023.There was also a leaking gutter which was eventually repaired by a window cleaner employed by the Applicants. There was a burglary at the premises. This was repaired by the First Respondents. The Applicants are concerned about the integrity of the door. Nonetheless they confirmed that the premises were a nice place to live. The Respondents’ case[9]The Respondents admitted that the property were unlicensed during the relevant period and did not seek to advance a reasonable excuse argument. They conceded that they had not been a perfect landlord but they were certainly not a “rogue landlord”. Their failure to license was caused by an oversight on their part. The Second Respondent’s business had gone into liquidation. The First Respondent was earning £60 k per annum but they had been paying two mortgages and had renewed the roof at a cost of £15000. They accepted that there were disrepair items in the premises but said their priority had been to repair the roof. It was argued by the First Respondent that any award should be at the lower end, as this was a selective licensing case, they were not professional landlords, the disrepair issues were minor and a significant award would have a detrimental effect on them. The law The law on Rent Repayment Orders The Housing Act 2004 (“the 2004 Act”)[10]The 2004 Act introduced a new system of assessing housing conditions and enforcing housing standards. Part 2 of the Act relates to the licencing of Houses in Multiple Occupation ("HMOs") whilst Part 3 relates to the selective licensing of other residential accommodation. The Act creates offences under section 72(1) of having control and management of an unlicenced HMO and under section 95(1) of having control or management of an unlicenced house. On summary conviction, a person who commits an offence is liable to a fine. An additional remedy was that either a local housing authority ("LHA") or an occupier could apply to a FTT for a RRO.[11]Part 2 of the 2004 Act relates to the licensing of HMOs. Section 61 provides for every prescribed HMO to be licensed. HMOs are defined by section 254 which states. 254 Meaning of “house in multiple occupation” (1) For the purposes of this Act a building or a part of a building is a “house in multiple occupation” if– (a) it meets the conditions in subsection (2) (“the standard test”); (b) it meets the conditions in subsection (3) (“the self-contained flat test”); (c) it meets the conditions in subsection (4) (“the converted building test”); (d) an HMO declaration is in force in respect of it under section 255; or (e) it is a converted block of flats to which section 257 applies.[12]The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 prescribes those HMOs that require a licence under the mandatory licensing scheme. Article 4 provides that an HMO is of a prescribed description if it(a) is occupied by five or more persons;(b) is occupied by persons living in two or more separate households; and(c) meets the standard test under section 254(2) of the 2004 Act.[13]Section 80 Housing Act 2004 deals with the designation of Selective Licensing which is what we are dealing with here: 80 Designation of selective licensing areas(1) A local housing authority may designate either– (a) the area of their district, or (b) an area in their district, as subject to selective licensing, if the requirements of subsections (2) and (9) are met.(2) The authority must consider that– (a) the first or second set of general conditions mentioned in subsection (3) or (6), or (b) any conditions specified in an order under subsection (7) as an additional set of conditions, are satisfied in relation to the area.(3) The first set of general conditions are– (a) that the area is, or is likely to become, an area of low housing demand; and (b) that making a designation will, when combined with other measures taken in the area by the local housing authority, or by other persons together with the local housing authority, contribute to the improvement of the social or economic conditions in the area.(4) In deciding whether an area is, or is likely to become, an area of low housing demand a local housing authority must take into account (among other matters)– (a) the value of residential premises in the area, in comparison to the value of similar premises in other areas which the authority consider to be comparable (whether in terms of types of housing, local amenities, availability of transport or otherwise); (b) the turnover of occupiers of residential premises; (c) the number of residential premises which are available to buy or rent and the length of time for which they remain unoccupied.(5) The appropriate national authority may by order amend subsection (4) by adding new matters to those for the time being mentioned in that subsection.(6) The second set of general conditions are– (a) that the area is experiencing a significant and persistent problem caused by anti-social behaviour; (b) that some or all of the private sector landlords who have let premises in the area (whether under leases or licences) are failing to take action to combat the problem that it would be appropriate for them to take; and (c) that making a designation will, when combined with other measures taken in the area by the local housing authority, or by other persons together with the local housing authority, lead to a reduction in, or the elimination of, the problem. “Private sector landlord” does not include [a non-profit registered provider of social housing or ]1 a registered social landlord within the meaning of Part 1 of the Housing Act 1996 (c. 52).(7) The appropriate national authority may by order provide for any conditions specified in the order to apply as an additional set of conditions for the purposes of subsection (2).(8) The conditions that may be specified include, in particular, conditions intended to permit a local housing authority to make a designation for the purpose of dealing with one or more specified problems affecting persons occupying Part 3 houses in the area. “Specified” means specified in an order under subsection (7).(9) Before making a designation the local housing authority must– (a) take reasonable steps to consult persons who are likely to be affected by the designation; and (b) consider any representations made in accordance with the consultation and not withdrawn.(10) Section 81 applies for the purposes of this section.[14]Section 263 of the Act provides: “(1) In this Act “person having control”, in relation to premises, means (unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent. (2) In subsection (1) “rack-rent” means a rent which is not less than two-thirds of the full net annual value of the premises. (3) In this Act “person managing” means, in relation to premises, the person who, being an owner or lessee of the premises–(a) receives (whether directly or through an agent or trustee) rents or other payments from– (i) in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises; and (ii) in the case of a house to which Part 3 applies (see section 79(2)), persons who are in occupation as tenants or licensees of parts of the premises, or of the whole of the premises; or(b) would so receive those rents or other payments but for having entered into an arrangement (whether in pursuance of a court order or otherwise) with another person who is not an owner or lessee of the premises by virtue of which that other person receives the rents or other payments; and includes, where those rents or other payments are received through another person as agent or trustee, that other person.” The Housing and Planning Act 2016 (“the 2016 Act”)[15]Part 2 of the 2016 Act introduced a raft of new measures to deal with "rogue landlords and property agents in England". Chapter 2 allows a banning order to be made against a landlord who has been convicted of a banning order offence and Chapter 3 for a data base of rogue landlords and property agents to be established. Section 126 amended the 2004 Act by adding new provisions permitting LHAs to impose Financial Penalties of up to £30,000 for a number of offences as an alternative to prosecution.[16]Chapter 4 introduces a new set of provisions relating to RROs. An additional five offences have been added in respect of which a RRO may now be sought. The maximum award that can be made is the rent paid over a period of 12 months during which the landlord was committing the offence. However, section 46 provides that a tribunal must make the maximum award in specified circumstances. Further, the phrase "such amount as the tribunal considers reasonable in the circumstances" which had appeared in section 74(5) of the 2004 Act, does not appear in the new provisions. It has therefore been accepted that the case law relating to the assessment of a RRO under the 2004 Act is no longer relevant to the 2016 Act.[17]In the Upper Tribunal (reported at [2012] UKUT 298 (LC)), Martin Rodger KC, the Deputy President, had considered the policy of Part 2 of the 2016. He noted (at [64]) that “the policy of the whole of Part 2 of the 2016 Act is clearly to deter the commission of housing offences and to discourage the activities of “rogue landlords” in the residential sector by the imposition of stringent penalties. Despite its irregular status, an unlicensed HMO may be a perfectly satisfactory place to live. The “main object of the provisions is deterrence rather than compensation.”[18]Section 40 provides (emphasis added): “(1) This Chapter confers power on the First-Tier Tribunal to make a rent repayment order where a landlord has 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.”[19]Section 40(3) lists seven offences “committed by a landlord in relation to housing in England let by that landlord”. The five additional offences are:(i) violence for securing entry contrary to section 6(1) of the Criminal Law Act;(ii) eviction or harassment of occupiers contrary to sections 1(2), (3) or (3A) of the Protection from Eviction Act 1977;(iii) failure to comply with an improvement notice contrary to section 30(1) of the 2004 Act;(iv) failure to comply with prohibition order etc contrary to section 32(1) of the Act; and(v) breach of a banning order contrary to section 21 of the 2004 Act. There is a criminal sanction in respect of some of these offences which may result in imprisonment. In other cases, the local housing authority might be expected to take action in the more serious case. However, recognising that the enforcement action taken by local authorities was been too low, the 2016 Act was enacted to provide additional protection for vulnerable tenants against rogue landlords.[20]It is a defence to the section 95(1) offence of having control of or managing an unlicensed house for the person concerned to show that they had a reasonable excuse for doing so (section 95(4)(a), 2004 Act). In this case Mr Newell maintained that he had such a defence in relation to the Flat.[21]In Marigold v Wells [2023] UKUT 33 (LC), at [48], borrowing from the approach taken by tax tribunals, the Upper Tribunal suggested that a property tribunal considering a defence of reasonable excuse. They had to first consider objectively if the defence could amount to a reasonable excuse. Secondly they have to decide if the facts relied on are proven and whether, viewed objectively, the proven facts provided an objectively reasonable excuse for the conduct of the appellant, taking into account their experience and other relevant characteristics.[22]Section 41 deals with applications for RROs. The material parts provide: “(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.[23]Section 43 provides for the making of RROs: “(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 has been convicted).”[24]Section 44 is concerned with the amount payable under a RRO made in favour of tenants. By section 44(2) that amount “must relate to rent paid during the period mentioned” in a table which then follows. The table provides for repayment of rent paid by the tenant in respect of a maximum period of 12 months. Section 44(3) provides (emphasis added): “(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.[25]Section 44(4) provides: “(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.”[26]Section 46 specifies a number of situations in which a FTT is required, subject to exceptional circumstances, to make a RRO in the maximum sum. These relate to the five additional offences which have been added by the 2016 Act where the landlord has been convicted of the offence or where the LHA has imposed a Financial Penalty.[27]In Williams v Parmar [2021] UKUT 244 (LC); [2022] HLR 8, the Chamber President, Fancourt J, gave guidance on the approach that should be adopted by FTTs in applying section 44:(i) A RRO is not limited to the amount of the profit derived by the unlawful activity during the period in question (at [26]);(ii) Whilst a FTT may make an award of the maximum amount, there is no presumption that it should do so (at [40]);(iii) The factors that a FTT may take into account are not limited by those mentioned in section 44(4), though these are the main factors which are likely to be relevant in the majority of cases (at [40]).(iv) A FTT may in an appropriate case order a sum lower than the maximum sum, if what the landlord did or failed to do in committing the offence is relatively low in the scale of seriousness ([41]).(v) In determining the reduction that should be made, a FTT should have regard to the “purposes intended to be served by the jurisdiction to make a RRO” (at [41] and [43]).[28]The Deputy Chamber President, Martin Rodger KC, has subsequently given guidance of the level of award in his decisions Simpson House 3 Ltd v Osserman [2022] UKUT 164 (LC); [2022] HLR 37 and Hallett v Parker [2022] UKUT 165 (LC); [2022] HLR 46. Thus, a FTT should distinguish between the professional “rogue” landlord, against whom a RRO should be made at the higher end of the scale (80%) and the landlord whose failure was to take sufficient steps to inform himself of the regulatory requirements (the lower end of the scale being 25%).[29]In Acheampong v Roman [2022] HLR 44, Judge Cooke has now stated that FTTs should adopt the following approach: "20. The following approach will ensure consistency with the authorities:a. Ascertain the whole of the rent for the relevant period;b. Subtract any element of that sum that represents payment for utilities that only benefited the tenant, for example gas, electricity and internet access. It is for the landlord to supply evidence of these, but if precise figures are not available an experienced tribunal will be able to make an informed estimate.c. 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 whose relative seriousness can be seen from the relevant maximum sentences on conviction) and compared to other examples of the same type of offence. What proportion of the rent (after deduction as above) is a fair reflection of the seriousness of this offence? That figure is then the starting point (in the sense that that term is used in criminal sentencing); it is the default penalty in the absence of any other factors but it may be higher or lower in light of the final step:d. Consider whether any deduction from, or addition to, that figure should be made in the light of the other factors set out in section 44(4).[21]I would add that step (c) above is part of what is required under section 44(4)(a). It is an assessment of the conduct of the landlord specifically in the context of the offence itself; how badly has this landlord behaved in committing the offence? I have set it out as a separate step because it is the matter that has most frequently been overlooked."[30]Licensing offences may be ‘less serious’ than other offences for which an RRO can be recovered. However, in Daff v Gyalui [2023] UKUT 134 (LC) [49] it was stated that there are “more or less serious examples” of Section 72 offences.[31]Newell v Abbott [2024] UKUT 181 (LC) at [47]-[57] provides a comprehensive summary of the Upper Tribunal’s recent decisions regarding the seriousness of particular licensing offences.[32]Newell also provides a ‘neutral’ baseline for assessing the seriousness of an RRO. Deputy Chamber President Martin Rodger KC assessed that case at 60% without putting weight on either party’s conduct. Determination[33]We are satisfied beyond reasonable doubt that the Respondents were the Applicants’ landlord during the relevant period. We are satisfied beyond reasonable doubt that the premises were subject to a selective licensing regime during the relevant period and should have been licensed but were not.[34]We are satisfied beyond reasonable doubt that the Respondents were the persons in control of the premises. We are also satisfied that the Applicant paid the rent they alleged during the relevant period.[35]We are not satisfied that the Respondents had a reasonable excuse during the relevant period. In fact none was offered although arguments were submitted in relation to mitigation.[36]Accordingly, we consider that the offence is established for the periods claimed. No license was obtained or even sought during the relevant period.[37]Having decided that the offence is made out we consider it is appropriate to make a Rent Repayment order in this case. We will then consider the amount of penalty that is due. Applying the test in Acheampong (above):• The whole of the rent due was £26844.• In relation to utilities there are no deductions that need to be made.• The Applicants did not receive universal credit so there is no deduction required here.• We consider that this offence was moderately serious and we accept that there was some mitigation as the Respondents were having difficulties following the Second Respondent’s business failing. We also do not consider that the Respondents are professional landlords. They owned only two properties. Nonetheless it was their responsibility to keep themselves informed as to their licensing responsibilities. They failed in this regard during the relevant period. Two matters caused us particular concern. These were firstly the potential fire risk to this family as a result of not having a fire alarm on the upper floor and the painted sash windows preventing egress and secondly the fact that the Respondents had apparently ignored warnings by an electrician of the risk of an electric shock. This concern was heightened because the premises were occupied by children. These matters ought to have been attended to urgently but were not.[38]Taking all of these matters into account we consider that an award of 55% of the rent for the relevant period is appropriate. This amounts to £14764.20. This sum should be paid within 28 days.[39]The Applicants were successful in their application therefore we also require the Respondents to pay their application and hearing fees which total £341.This sum should also be paid within 28 days of receipt of the decision. Judge Shepherd 20th June 2026 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 Tribunal 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 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.[4]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.