(1) Sarah Jayne Lowther (2) Brad Wilson Parrett (3) Yara Alshigri (4) Francis BruinApplicantTania Mann (no attendance)Respondent
Before
Judge Sarah McKeownKershaw, BScMuhammed Williams, LB of Tower Hamlets for the ApplicantDate 29 August 2024
DECISION
Decision of the Tribunal(1) The Tribunal is satisfied beyond reasonable doubt that the Respondent landlord committed an offence under Section 95(1) of the Housing Act 2004.(2) The Tribunal has determined that it is appropriate to make a rent repayment order.(3) The Tribunal makes a rent repayment order in favour of the Applicants against the Respondent, in the total sum of £25,740, to be paid within 28 days of the date of this decision. The award is apportioned between the Applicants as follows: (a) Mr. Bruin: £6,435; (b) Mr. Parrett: £6,318; (c) Ms. Lowther: £6,357; (d) Ms. Alshirgri: £6,630 (e) The Tribunal determines that the Respondent shall pay the Applicants an additional £300 as reimbursement of Tribunal fees to be paid within 28 days of the date of this decision. Page references are to the bundle provided by the Applicant for the hearing Introduction[1]This is a decision on an application for a rent repayment order under section 41 of the Housing and Planning Act 2016 (“the 2016 Act”). Application and Background[2]By an application dated 9 January 2024 (p.1) the Applicants applied for a Rent Repayment Order(“RRO”) in the sum of £39,600.[3]The application was brought on the ground that the Respondent had committed an offence of having control or management of an unlicensed House in Multiple Occupation (“HMO”) for failing to have an HMO licence (“licence”) for 50 Grimsby Street, London, E2 6ES (“the Property”), an offence under section 95(1) of the Housing Act 2004 (“the 2004 Act”).[4]The Property is a four-bedroom house, on three storeys.[5]The application states as follows:[6]The Applicants signed a one-year fixed term joint Assured Shorthold Tenancy agreement with the Respondent in respect of the Property, starting from 1 June 2022 to 31 May 2023. They jointly paid a monthly rent of £3,300, which excluded payment for utility bills. None of the Applicants claimed the Housing Element of Universal Credit.[7]The London Borough of Tower Hamlets introduced a Selective Scheme in October 2016, which applies to all rented properties in Whitechapel, Spitalfields and Banglatown, and Weavers areas of the borough, excluding those needing a licence under the mandatory scheme. The scheme covered all privately rented properties including smaller HMO’s that are occupied by three or four people living as two or more separate households who share facilities within the selective licensing areas. The Selective Licensing Scheme was renewed for another 5 years from 1 October 2021 (there was an overlap between the two schemes). The scheme was later amended on 1 April 2024, but this is outside the period of claim.[8]The Applicants claim a RRO from 1 June 2022 to 31 May 2023.[9]On 10 April 2024 (p.11) the Tribunal issued Directions for the determination of the application, providing for the parties to provide details of their cases and the preparation of a hearing bundle. Documentation[10]The Applicant has provided a bundle of documents comprising a total of 77 pages. It includes: the Applicants’ Expanded Statement of the Reasons for the Applicant for a Rent Repayment Order (p.17); witness statement of Mr. Williams, Rent Repayment Project Officer (p.22); bank statements (p.42 on), rent schedule (p.56), witness statement of Ms. Alshigri (p.57); witness statement of Mr. Parrett (p.59); witness statement of Mr. Bruin (p.60).[11]At the commencement of the hearing, the Tribunal raised the fact that the bundle did not contain a witness statement from Ms. Lowther. Mr. Williams stated that she had prepared a witness statement and he was asked to email it to the Tribunal, which he did.[12]The Tribunal considered whether to have regard to the witness statement of Ms. Lowther. It considered rule 6 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 which provides, among other things, that the Tribunal may extend the time for complying with any rule, practice direction or direction, even if the application for an extension is not made until after the time limit had expired. The Tribunal did decide to have regard to the witness statement of Ms. Lowther for the following reasons:(a) It largely dealt with the same issues as were dealt with in the witness statements of the other three Applicants;(b) Ms. Lowther was the person who had made the rent payment to the Respondent;(c) Ms. Lowther was in attendance at the hearing;(d) The Respondent had played no part in the proceedings and had not attended the hearing.[13]No documents have been provided by the Respondent. The Tribunal notes that there has been the following correspondence with the Respondent:(a) Letter dated 23 February 2024 sent by email to the Respondent by the Tribunal stating that the Tribunal had received the application;(b) Letter dated 11 March 2024 sent by email to the Respondent by the Tribunal stating that the application was awaiting directions;(c) Letter dated 15 April 2024 sent by email to the Respondent by the Tribunal enclosing the directions order and requesting a completed Listing Questionnaire;(d) Letter dated 15 August 2024 sent by email and post to the Respondent by the Tribunal referring to the hearing date;(e) The Respondent did email Mr. Williams, copying in the Tribunal on 15 April 2024, stating that she had no idea what the email containing the Directions order meant. She also emailed the Tribunal on 30 April 2024 asking who Mr. Williams was and why she was receiving the email. The Tribunal responded stating that she had received various communications from the Tribunal relating to the application in respect of which she was the Respondent and they were attached again to the email. It was explained that the Applicants are represented by Mr. Williams.[14]Rule 34 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 states that, if a party fails to attend a hearing, the Tribunal may proceed with the hearing if the Tribunal-(a) is satisfied that the party has been notified of the hearing or that reasonable steps have been taken to notify the party of the hearing; and(b) considers that it is in the interests of justice to proceed with the hearing.[15]The Tribunal is satisfied on the balance of probabilities that the Respondent is both aware of the proceedings and has been notified of the hearing. Further, it is in the interests of justice to proceed with the hearing. The Respondent should not be rewarded, just as the Applicants should not be punished, for her failure to engage with the Tribunal.[16]The Tribunal has primarily had regard to the documents to which it was referred during the hearing. The Position of the Parties[17]The Applicant contends, in summary, as follows:(a) The Property met the criteria to be licensed under the selective scheme as an HMO;(b) During the relevant period the Property was occupied by four persons living in two or more separate households and occupying the Property as their main residence;(c) The Respondent was the Applicants’ landlord and is a person with “control” of the Property for the purpose of s.263 HA 2004;(d) Ms. Lowther contacted the LB of Tower Hamlets by email on 16 June 2023 (p.63) to complain that the Respondent was operating a privately rented premises without complying with legislation, including fire safety regulations;(e) The boiler broke sporadically but the Respondent would not respond to their requests to have it fixed, the situation would become acute in the winter and they would, on occasion, pay an engineer to have it fixed;(f) The oven did not work when they moved in and it took four months for it to be repaired;(g) It took 3 months for electric blinds in the upstairs bedroom to be repaired;(h) The Property was dirty when they moved in, but they cleaned it before they moved out, paying over £300;(i) The Respondent had tried to take money from the deposit for a stain on the sofa, but was unsuccessful as the stain was noted on the inventory completed when they moved in;(j) The Applicants paid the rent;(k) The Respondent did not have the EICR checks and did not provide the necessary certificates. The Applicants did not have any certificates or information about the electrics or the boiler, and they were not tested throughout the tenancy;(l) Mr. Rizvi, a Housing Intelligence Officer (who has left the local authority) referred the email to Mr. Mukit, Principal of the Selective Licensing, who established that the Property did not have a selective licence and referred the matter to Mr. Williams and Mr. Azim, a Housing Standards Officer (who has since left the local authority);(m) Ms. Azim also referred the case to Mr. Williams. He contacted Ms. Lowther and the applicants gave their consent to allow him to assist them (p.74, p.76, p.77, p.78), and Ms. Lowther provided tenancy agreements and evidence of rent payments;(n) On 23 June 2023 (p.65, p.67) Mr. Azim sent letters to the Respondent’s addresses (at the Property and to the address in Shenfield) telling him to apply for a selective licence otherwise she would face sanctions including a Civil Penalty Notice and RRO;(o) Mr. Thompson, another officer of the local authority, arranged an inspection of the Property. He attended on 12 August 2023 and met a cleaner, who told him that the Property was being used as an Airbnb;(p) Mr. Williams received an email from the Respondent on 15 April 2024. She stated that she did not know what the claim was about. On 2 May 2023, Mr. Williams received an email from the Respondent, explaining her circumstances. He responded on 3 May 2024;(q) Mr. Williams did receive an email from the Respondent on 2 May 2024 (his witness statement states 2023 but it was clarified that this was a mistake) explaining her current circumstances. This was not included in the bundle as the Tribunal was told that this contained some potentially without prejudice correspondence;(r) The Respondent bought the Property for £795,000 in May 2014. She informed Mr. Williams in an email that it is currently worth about £815,000.[18]Ms. Alshigri states (p.57) that she shared with three other tenants, and they were not related. She states that they lived in the Property for two years (from June 2021 to June 2023) and during that time, the Respondent had several “outbursts” and she hired people to do jobs around the house who were unqualified and “probably uninsured”. She gives an example of when they had issues with the boiler and they tried to look up the person who came and they could not find the company on Companies House. Another example given is that the person who came to show a perspective buyer around was a friend of the Respondent and not an agent. She states that they Property was dirty when they arrived and the Respondent hired a cheap cleaning service which was not of a good standard. When they reported this, she said that she expected them to not let the cleaner leave the house until they felt it was up to standard. She states that in his bedroom, the skylights did not open, the shutters were electric and broken. She says it took around four months to fix this and this was during a time when he had to work from home. She denies that the Respondent sent them presents or raised the idea of increasing rent at any time. She states that she owns another property in East London and has a high earning job as an executive in an investment bank.[19]Mr. Parrett states (p.59) that his tenancy was for a period of 2 years and they paid a joint monthly rent of £3,300. He shared with three others to whom he was not related. He states that the Respondent took a long time to fix issues, such as a broken oven and boiler, which she then tried to fix by unreputable people much later. She said at one time she was not financially able to fix the oven. They did an end of tenancy clean (paid for by them) which left the Property clean (unlike when they moved in). It is said that the Respondent made many small claims in an attempt to keep the deposit. The issues (e.g. a stain on the sofa) were there when they moved in and it felt like a dishonest attempt to withhold money. It was settled via the Deposit Protection Service scheme who only deducted money for the hob, which they had offered to repair.[20]Mr. Bruin states (p.60) that the Applicants found out that the Property was unlicensed. He states that his tenancy was from 1 February 2022 to June 2023. He shared with the other Applicants, to whom he was not related. He states that despite a very thorough end of tenancy clean (which they paid for), which left the Property in a very high standard, the Respondent made several claims on the deposit. The issues (e.g. a stain on the sofa) were there when they moved in and it felt like a dishonest attempt to withhold money. It was settled via the Deposit Protection Service scheme who only deducted money for the hob, which they had offered to repair. The Hearing[21]The Applicants were represented by Mr. Williams of the London Borough of Tower Hamlets. Three of the Applicants attended the hearing (Ms. Lowther, Mr. Parrett and Mr. Bruin). Mr. Williams relied primarily on the documents in the bundle, the details given in the witness statements as to when complaints were made and the letter sent to the Respondent telling her to apply for a licence.[22]It was clarified that Ms. Alshigri, Mr. Parrett and Ms. Lowther had been tenants in respect of the Property before 1 June 2022, but the claim only relates to the period 1 June 2022-31 May 2023, when all four Applicants were tenants and for the period covered by the tenancy agreement that they had all signed.[23]Mr. Williams informed the Tribunal that the Property falls into Whitechapel ward (p.70 is the public notice which states that the selective licensing applies to the Whitechapel ward). He referred to paragraph 7 of his witness statement which confirmed that when checks were made by Mr. Rizvi, the Property did not have a selective licence. Mr. Williams then went through the content of his witness statement. He referred to the rent schedule and the bank statements provided showing payment of rent. He said that he had checked the Land Registry and the Respondent bought the Property for £795,000 in May 2014 and after checking on Zoopla (checked at about the time the application was made), the Property appeared to be worth about £815,000. Mr. Thompson had inspected the Property, and a cleaner informed him that the Property was being used as an Airbnb, which Mr. Williams said showed that the Respondent was making money from the Property. In relation to the conduct of the Respondent, he said that after she received notice of the application, her responses show that she did not know anything about licensing regulations and Mr. Lowther complained to the council as the Applicants had not been provided with the required documents/certificates.[24]The Tribunal heard from Mr. Bruin (whose witness statement is at p.60). He was asked how much rent he personally had paid towards the full joint rent. He said that he had paid £825 per month. He said that he was one of four tenants. He said that there were some issues with the Property, mostly outlined in the witness statements of Mr. Parrett and Ms. Alshigri. There were issued with windows not opening and blinds not working and ovens not operating for periods of time. He said that the windows in the living room/kitchen did not open for the duration of his tenancy. He said he had moved into the Property part way through a tenancy, and then signed the agreement with the other three Applicants on 1 June 2022. He said that the blinds in Ms. A’s room did not work and there were general maintenance issues in terms or door handles falling off. He referred to the issues raised in his witness statement in terms of recovery of the deposit. He said that most of the general maintenance issues were before he had moved in to the Property.[25]The Tribunal asked if he had communicated directly with the Respondent. He said that contact was usually through Ms. Lowther although he had had some communications with the Respondent by WhatsApp and email. He said that he believed that during his time at the Property, the Respondent was living abroad.[26]The Tribunal heard from Mr. Parrett (whose witness statement is at p.59). He said that they stopped receiving hot water in about January 2022 (which is before the period of claim). He said that they had to go one day without hot water and then the Respondent arranged for someone to come to the Property. That person was supposed to come between 6-9pm but they did not attend until about 11pm. The boiler was in Mr. Parrett’s room and the person who attended said that he fixed it and then it worked for a while (with hot water) and then stopped again. He said that he searched for the person’s number but did not connect to any company. He also had an office number and he also could not find a company for that number. When the boiler did not work again, the Applicants had to find someone to fix it and when someone attended, it was discovered that the person who had attended previously had turned on a switch which made the hot water constantly be on, which raised their bill. The boiler could also go on and off and the temperature gauge had to be fixed. The issues lasted about 3 days in total. In terms of the oven, that would turn off sporadically, and the Applicants had asked the Respondent to fix it, and it took about 3 months for it to be fixed. Mr. Parrett said that he stayed in the Property after the first year of his tenancy (prior to the period of claim) as he was on a two-year work visa, had made friends with the other tenants, did not want to have to move house again and the Property was in a central location. He paid £810 per month towards the total rent payable for the Property.[27]Ms. Lowther also gave evidence. The Tribunal had regard to her witness statement as dealt with above. Ms. Lowther confirmed that she paid £815 per month towards the total rent due. She said that when she had originally moved in, the Property was unclean. She said that they had paid to have it cleaned when they moved out. They had made the Respondent aware of any problems with the Property. When they moved out, the Respondent became defensive and focused on any issues with the Property and tried to blame the Applicants. She referred to the dispute about the deposit – the only amount not returned to them was about £350 in respect of the induction hob. It was cracked when they had moved out, but it was 7 years old and opinion was fair wear and tear, used deposit leaflet how much should be paid rather than £1,000 she wanted. Originally asked for it all back – R countered with £1,000, used doc by DPS to work out the figure of £350 felt was fair and deposit, accepted by DPS, that resolved issue. She also referred to issues with the boiler and the lack of response from the Respondent.[28]She said that there were not checks on the Property in terms of gas safety during her time living there, and she had not received any gas safety certificate or any certification about the electrics. She said that the induction hob and oven were electric but the boiler was gas. She said that she did not believe she had received the How to Rent Booklet – she recalled being given the tenancy agreement and the inventory done when they moved in, but that was all (save the inventory when they moved out). Mr. Parrett and Mr. Bruin confirmed that their recollection was the same. None of them thought that there were any carbon monoxide detectors – Mr. Parrett said that the boiler was in his room and he did not recall seeing one (although the boiler was behind a door). All of the Applicants confirmed that there was a smoke detector downstairs and another one on the landing at first floor level but they were not sure if there was one on the second floor.[29]It was confirmed that there was an open plan living room/kitchen and that the stairs to the first floor came down into a small hallway which was separated from the living room/kitchen by a door.[30]It was also confirmed that Ms. Alshigri paid £850 per month towards the rent due.[31]In closing submissions, Mr. Williams referred to the “Expanded Statement of Reasons for the Applicant for a Rent Repayment Order” (p.17), particularly the section on fire safety. He read from part of this, as to the risk to multi-occupied properties (p.20) and this was why the local authority assists tenants to claim RRO’s. Statutory regime[32]Rent repayment orders are one of a number of measures introduced with the aim of discouraging rouge landlords and agents and to assist with achieving and maintaining acceptable standards in the rented property market. The relevant provisions relating to rent repayment orders are set out in sections 40-46 Housing and Planning Act 2016 (“the 2016”) Act, not all of which relate to the circumstances of this case.[33]Part 2 of the Housing Act 2004 (“the 2004 Act”) introduced licensing for certain HMO’s. The Local Authority may designate an area to be subject to additional licencing where other categories of HMO’s occupied by three or more persons forming two or more households are required to be licenced.[34]Section 40 of the 2016 Act gives the Tribunal power to make a RRO where a landlord has committed a relevant offence. Section 40(2) explains that a RRO is an order requiring the landlord under a tenancy of housing in England to repay an amount of rent paid by a tenant (or where relevant to pay a sum to a local authority).[35]Part 3 of the 2004 Act applies to selective licensing of residential accommodation. Section 79 provides:(1) This Part provides for houses to be licensed by local housing authorities where- (a) they are houses to which this Part applies (see subsection (2)), and (b) they are required to be licensed under this Part (see section 85(1)).(2) This Part applies to a house if- (a) it is an area that if for the time being designated under section 80 subject to selective licensing, and (b) the whole of it is occupied either- (i) under a single tenancy or licence that is not an exempt or licence under subsection (3) or (4), or (ii) under two or more tenancies or licences in respect of different dwellings contained in it, none of which is an exempt tenancy or a licence under subsection (3) or (4); …[36]Section 95(1) of the 2004 Act is one of those listed in section 40 of the 2016 Act in respect of which the First-tier Tribunal may make a RRO. The section provides that: 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 85(1)) but is not so licensed.[37]Section 85(1) of the 2004 Act states: Every Part 3 house must be licensed under this Part unless-(a) it is an HMO to which Part 2 applies (see section 55(2)), or(b) a temporary exemption notice is in force in relation to it under section 86, or(c) a management order is in force in relation to it under Chapter 1 or 2 of Part 4 …[38]Section 41 of the 2016 Act permits a tenant to apply to the First-tier Tribunal for a RRO against a person who has committed a specified offence, if the offence relates to housing rented by the tenant(s) and the offence was committed in the period of 12 months ending with the day on which the application is made. 41 Application for a 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 …[39]Under section 43 of the 2016 Act, the Tribunal may only make a RRO if satisfied, beyond reasonable doubt in relation to matters of fact, that the landlord has committed a specified offence (whether or not the landlord has been convicted). Where reference is made below to the Tribunal being satisfied of a given matter in relation to the commission of an offence, the Tribunal is satisfied beyond reasonable doubt, whether stated specifically or not. 43 Making of 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 has 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); …[40]In order to establish a selective licensing scheme, the local authority has to follow the requirements of section 83(2) of the 2004 Act. The relevant delegated legislation is the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 (SI 2006 No 373), which provides: 9(1) A local housing authority that is required under section 59(2) or 83(2) of the Act to publish a notice of a designation of an area for the purpose of Part 2 or 3 of the Act must do so in the manner prescribed by paragraph (2). (2) Within 7 days after the date on which the designation was confirmed or made the local housing authority must—(a) place the notice on a public notice board at one or more municipal buildings within the designated area, or if there are no such buildings within the designated area, at the closest of such buildings situated outside the designated area;(b) publish the notice on the authority’s internet site; and(c) arrange for its publication in at least two local newspapers circulating in or around the designated area— (i) in the next edition of those newspapers; and (ii) five times in the editions of those newspapers following the edition in which it is first published, with the interval between each publication being no less than two weeks and no more than three weeks. (3) Within 2 weeks after the designation was confirmed or made the local housing authority must send a copy of the notice to— (a) any person who responded to the consultation conducted by it under section 56(3) or 80(9) of the Act; (b) any organisation which, to the reasonable knowledge of the authority— (i) represent the interests of landlords or tenants within the designated area; or (ii) represents managing agents, estate agents or letting agents within the designated area; and (c) every organisation within the local housing authority area that the local housing authority knows or believes provides advice on landlord and tenant matters, including— (i) law centres; (ii) citizens’ advice bureaux; (iii) housing advice centres; and (iv) homeless persons’ units. (4) In addition to the information referred to in section 59(2)(a), (b) and(c) or 83(2)(a), (b) and(c), the notice must contain the following information— (a) a brief description of the designated area; (b) the name, address, telephone number and e-mail address of— (i) the local housing authority that made the designation; (ii) the premises where the designation may be inspected; and (iii) the premises where applications for licences and general advice may be obtained; (c) a statement advising any landlord, person managing or tenant within the designated area to seek advice from the local housing authority on whether their property is affected by the designation; and(d) a warning of the consequences of failing to licence a property that is required to be licensed, including the criminal sanctions.[41]Where the application is made by a tenant, and the landlord has not been convicted of a relevant offence, s.44 applies in relation to the amount of a RRO, setting out the maximum amount that may be ordered and matters to be considered. If the offence relates to HMO licensing, the amount must relate to rent paid by the Applicants in a period, not exceeding 12 months, during which the Respondents were committing the offence. This aspect is discussed rather more fully below. 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 repaid by the tenant in respect of … 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 repaid 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.[42]Because cases have to be proved to the criminal standard of proof, the burden is on the tenant to establish that an offence has been committed. The landlord has the right to silence. There is no provision for judgment by default. Where a tenant has established a prima facie case, it may be appropriate in some cases to draw an inference from the landlord’s failure to adduce evidence, but this cannot reverse the burden of proof. As in contempt proceedings, “the burden of proof remains on the Claimant throughout, to the criminal standard, and the Claimant can invite the Court to conclude, on the basis of all the evidence in the case, that the Defendants [are in breach]. If the contemnor chooses to remain silent in the face of that dispute, the Court can draw an adverse inference against him, if the Court considers that to be appropriate and fair, and recalling that silence alone cannot prove guilt”: VIS Trading Co Ltd v Nazarov [2015] EWHC 3327 (QB), [2016] 4 WLR 1 at [31], approved by the Court of Appeal in ADM International SARL v Grain House International SA [2024] EWCA Civ 33 at [91].[43]It has been confirmed by case authorities that a lack of reasonable doubt, which may be expressed as the Tribunal being sure, does not mean proof beyond any doubt whatsoever. Neither does it preclude the Tribunal drawing appropriate inferences from evidence received and accepted. The standard of proof relates to matters of fact. The Tribunal will separately determine the relevant law in the usual manner. Determination of the Tribunal[44]The Tribunal has considered the application in four stages-(i) whether the Tribunal was satisfied beyond reasonable doubt that the Respondent had committed an offence under section 95(1) of the 2004 Act in that at the relevant time the Respondent was a person who controlled or managed an HMO that was required to be licensed under Part 2 of the 2004 Act but was not so licensed.(ii) whether the Applicant was entitled to apply to the Tribunal for a rent repayment order.(iii) Whether the Tribunal should exercise its discretion to make a rent repayment order.(iv) Determination of the amount of any order. Was the Respondent the Applicants’ landlord at the time of the alleged offence?[45]The Property was let to the Applicants (tenancy agreement - p.25). This states that the Respondent is the landlord of the Property and lets it to the Applicants for an initial term of 1 year, from 1 June 2022 to 31 May 2023 at a rent of £3,300 per month. The agreement gives the address for the Respondent as an address in the United States of America, but also gives an alternative address in Shenfield in Essex.[46]The Office Copy Entry (p.40) shows that the Respondent holds the title absolute in respect of the Property and has done since 2 May 2014.[47]The Tribunal finds as a fact, that the Respondent was the landlord of the Applicants as the Property was let to the Applicants from 1 June 2022 until 31 May 2024. Was a relevant HMO licensing offence committed during the period 1 June 2022 to 31 May 2023 and by whom?[48]The Tribunal applies, as it must, the criminal standard of proof (s.43(1)).[49]The Tribunal finds that, during the relevant period(s), the Property was a “HMO” (s.254-259) and the implementation of the selective licensing scheme by the London Borough of Tower Hamlets, the Property required a licence in order to be occupiable by three or four people living in two or more separate households. The Tribunal had regard to the evidence of Mr. Williams, the Public Notice (p.70) and the letters sent to the Respondent (p.65 and p.67). The Tribunal finds that the Property was, at the material time, occupied by four people living in more than two separate households.[50]On the evidence, the Tribunal finds (applying the criminal standard) that no licence was in place during the material time. The Tribunal had regard to the evidence of Mr. Williams and the letters sent to the Respondent (p.65 and p.67).[51]Where the Respondent would otherwise have committed an offence under section 95(1) of the 2004 Act, there is a defence if the Tribunal finds that there was a reasonable excuse pursuant to section 95(4). The standard of proof in relation to that is the balance of probabilities.[52]The offence is strict liability (unless the Respondent had a reasonable excuse) as held in Mohamed v London Borough of Waltham Forest [2020] EWHC 1083. The intention or otherwise of the Respondent to commit the offence is not the question at this stage, albeit there is potential relevance to the amount of any award. In of Sutton v Norwich City Council [2020] UKUT 90 (LC) it was held that the failure of the company, as it was in that case, to inform itself of its responsibilities did not amount to reasonable excuse. The point applies just the same to individuals.[53]The Upper Tribunal gave guidance on what amounts to reasonable excuse defence was given in Marigold & Ors v Wells [2023] UKUT 33 (LC), D’Costa v D’Andrea & Ors [2021] UKUT 144 (LC) and in Aytan v Moore [2022] UKUT 027 (LC) including the following:(a) the Tribunal should consider whether the facts raised could give rise to a reasonable excuse defence, even if the defence has not been specifically raised by the Respondent;(b) when considering reasonable excuse defences, the offence is managing or being in control of an HMO without a licence;(c) it is for the Respondent to make out the defence of reasonable excuse to the civil standard of proof;[54]As stated above, the Respondent has not provided any documents and has played no part in the hearing. The Tribunal considered whether any issue of reasonable excuse could arise, but taking everything into account, there is nothing which the Tribunal found to demonstrate a reasonable excuse.[55]The Tribunal is satisfied that the offence was committed from 1 June 2022 to 31 May 2023.[56]The next question is by whom the offence was committed? The Tribunal determined that the offence was committed by the Respondent, being the person who had control or was managing the Property (within the meaning of s.95(1) and s.263 Housing Act 2004) during the material time. Should the Tribunal make a RRO?[57]Given that the Tribunal is satisfied, beyond reasonable doubt, that the Respondent committed an offence under section 95(1) of the 2004 Act, a ground for making a RRO has been made out.[58]A RRO “may” be made if the Tribunal finds that a relevant offence was committed. Whilst the Tribunal could determine that a ground for a rent repayment order is made out but not make such an order, Judge McGrath, President of this Tribunal, said whilst sitting in the Upper Tribunal in the London Borough of Newham v John Francis Harris [2017] UKUT 264 (LC) as follows: “I should add that it will be a rare case where a Tribunal does exercise its discretion not to make an order. If a person has committed a criminal offence and the consequences of doing so are prescribed by legislation to include an obligation to repay rent housing benefit then the Tribunal should be reluctant to refuse an application for rent repayment order”.[59]The very clear purpose of the 2016 Act is that the imposition of a RRO is penal, to discourage landlords from breaking the law, and not to compensate a tenant, who may or may not have other rights to compensation. That must, the Tribunal considers, weigh especially heavily in favour of an order being made if a ground for one is made out.[60]The Tribunal is given a wide discretion and considers that it is entitled to look at all of the circumstances in order to decide whether or not its discretion should be exercised in favour of making a RRO. The Tribunal determines that it is entitled to therefore consider the nature and circumstances of the offence and any relevant conduct found of the parties, together with any other matters that the Tribunal finds to properly be relevant in answering the question of how its discretion ought to be exercised.[61]Taking account of all factors, including the purpose of the 2004 Act, the Tribunal exercises its discretion to make a RRO in favour of the Applicants. The amount of rent to be repaid[62]Having exercised its discretion to make a RRO, the next decision was how much should the Tribunal order?[63]In Acheampong v Roman [2022] UKUT 239 (LC) at [20] the Upper Tribunal established a four-stage approach for the Tribunal to adopt when assessing the amount of any order:(a) ascertain the whole of the rent for the relevant period;(b) subtract any element that represents payment for utilities;(c) consider the seriousness of the offence, both compared to other types of offences in respect of which a rent repayment order may be made and compared to other examples of the same type of offence. What proportion of the rent is a fair reflection of the seriousness of this offence? That percentage of the total amount applies for is the starting point; it is the default penalty in the absence of other factors, but it may be higher or lower in light of the final step;(d) consider whether any deductions from, or addition to, that figure should be made in light of the other factors set out in section 44(4)”.[64]In the absence of a conviction, the relevant provision is section 44(3) of the 2016 Act. Therefore, the amount ordered to be repaid must “relate to” rent paid in the period identified as relevant in section 44(2), the subsection which deals with the period identified as relevant in section 44(2), the subsection which deals with the period of rent repayments relevant. The period is different for two different sets of offences. The first is for offences which may be committed on a one-off occasion, albeit they may also be committed repeatedly. The second is for offences committed over a period of time, such as a licensing offence.[65]At [31] of Williams v Parmar [2021] UKUT 244 (LC) it was said: “… [the Tribunal] is not required to be satisfied to the criminal standard on the identity of the period specified in s.44(2). Identifying that period is an aspect of quantifying the amount of the RRO, even though the period is defined in relation to certain offences as being the period during which the landlord was committing the offence”.[66]The Tribunal is mindful of the various decisions of the Upper Tribunal in relation to RRO cases. Section 44 of the 2016 Act does not, when referring to the amount, include the word “reasonable” in the way that the previous provisions in the 2004 Act did. Judge Cooke stated clearly in her judgement in Vadamalayan v Stewart and others (2020) UKUT 0183 (LC) that there is no longer a requirement of reasonableness. Judge Cooke noted (paragraph 19) that the rent repayment regime was intended to be harsh on landlords and to operate as a fierce deterrent. The judgment held in clear terms, and perhaps most significantly, that the Tribunal must consider the actual rent paid and not simply any profit element which the landlord derives from the property, to which no reference is made in the 2016 Act. The Upper Tribunal additionally made it clear that the benefit obtained by the tenant in having had the accommodation is not a material consideration in relation to the amount of the repayment to order. However, the Tribunal could take account of the rent including the utilities where it did so. In those instances, the rent should be adjusted for that reason.[67]In Vadamalayan, there were also comments about how much rent should be awarded and some confusion later arose. Given the apparent misunderstanding of the judgment in that case, on 6th October 2021, the judgment of The President of the Lands Chamber, Fancourt J, in Williams v Parmar [2021] UKUT 0244 (LC) was handed down. Williams has been applied in more recent decisions of the Upper Tribunal, as well as repeatedly by this Tribunal. The judgment explains at paragraph 50 that: “A tribunal should address specifically what proportion of the maximum amount of rent paid in the relevant period, or reduction from that amount, or a combination of both, is appropriate in all the circumstances, bearing in mind the purpose of the legislative provisions.”[68]The judgment goes on to state that the award should be that which the Tribunal considers appropriate applying the provisions of section 44(4). There are matters which the Tribunal “must, in particular take into account”. The Tribunal is compelled to consider those and to refer to them. The phrase “in particular” suggests those factors should be given greater weight than other factors. In Williams, they are described as “the main factors that may be expected to be relevant in the majority of cases”- and such other ones as it has determined to be relevant, giving them the weight that it considers each should receive. Fancourt J in Williams says this: “A tribunal must have particular regard to the conduct of both parties includes the seriousness of the offences committed), the financial circumstances of the landlord and whether the landlord has been convicted of a relevant offence, The Tribunal should also take into account any other factors that appear to be relevant.”[69]The Tribunal must not order more to be repaid than was actually paid out by the Applicants to the Respondent during that period, less any relevant award of universal credit paid (to any person) in respect of rent under the tenancy during that period (s.44(3) 2016 Act). That is entirely consistent with the order being one for repayment. The provision refers to the rent paid during the period rather than rent for the period.[70]It was said, in Williams v Parmar, by Sir Timothy Fancourt [43] that the Rent Repayment Orders under the Housing and Planning Act 2016: Guidance for Local Authorities identifies the factors that a local authority should take into account in deciding whether to seek a RRO as being the need to: punish offending landlords; deter the particular landlord from further offences; dissuade other landlords from breaching the law; and remove from landlords the financial benefit of offending. It was indicated [51] that the factors identified in the Guidance will generally justify an order for repayment of at least a substantial part of the rent. It was also said that a full award of 100% of the rent should be reserved for the most serious of cases (see also Hallett v Parker [2022] UKUT 165).[71]The Tribunal has carefully considered the amount of the rent for the relevant period of the licencing offence that should be awarded. Ascertain the whole of the rent for the relevant period[72]The relevant rent to consider is that paid during “a period, not exceeding twelve months, during which the landlord was committing the offence”.[73]As stated above, the Tribunal has found that the Respondent committed the offence from 1 June 2022 to 31 May 2023. The Tenancy Agreement confirms that the rent was £3,300 per month. The Tribunal has seen evidence of payments: 30/06/22 p.42 £850 from Ms. Alshigri 01/06/22 p.43 £3,300 to the Respondent 01/07/22 p.44 £3,300 to the Respondent 01/08/22 p.45 £3,300 to the Respondent 01/09/22 p.46 £3,300 to the Respondent 01/10/22 p.47 £825 from Mr. Bruin 01/10/22 p.47 £3,300 to the Respondent 01/11/22 p.48 £3,300 to the Respondent 01/12/22 p.49 £3,300 to the Respondent 01/02/23 p.51 £3,300 to the Respondent 01/02/23 p.52 £3,300 to the Respondent 01/03/24 p.53 £3,300 to the Respondent 01/04/23 p.54 £3,300 to the Respondent 01/05/23 p.55 £3,300 to the Respondent[74]The Applicants have also provided a rent statement (p.56).[75]None of the Applicants claimed the Housing Element of Universal Credit.[76]The whole of the rent for the relevant period is therefore £39,600. Deductions for utilities?[77]The Applicants were liable for all charges in respect of supply and use of utilities, and so no deduction for utilities is made. Seriousness of the offence[78]In Williams v Parmar [2021] UKUT 244 (LC) it was said that “the circumstances and seriousness of the offending conduct of the landlord are comprised in the ‘conduct of the landlord’, so the First Tier Tribunal may, in an appropriate case, order a lower than maximum amount of rent repayment, if what a landlord did or failed to do in committing the offence is relatively low in the scale of seriousness of mitigating circumstances or otherwise”.[79]As the Upper Tribunal has made clear, the conduct of the Respondent also embraces the culpability of the Respondent in relation to the offence that is the pre-condition for the making of the RRO. The offence of controlling or managing an unlicensed HMO is a serious offence, although it is clear from the scheme and detailed provisions of the 2016 Act that it is not regarded as the most serious of the offences listed in section 40(3).[80]In Daff v Gyalui [2023] UKUT 134 (LC) it was highlighted that there will be more and less serious examples within the category of offence: [49].[81]The Tribunal determines that the relatively less serious offence committed by the Respondent should be reflected in a deduction from the maximum amount in respect of which a RRO could be made. It is noted that a failure to have a selective licence is less serious than a failure to have a mandatory licence. Further, the Tribunal notes, however, that it was incumbent on the Respondent to have sufficient knowledge of the legislative and licensing requirements and there is no evidence that the Respondent did have a system in place to ensure that she did have such knowledge.[82]The starting point for the Tribunal, taking account of this, is that a RRO should be made, reflecting 60% of the total rent paid for the relevant period. Conduct[83]The Tribunal had regard to the allegations made by the Applicants as to the conduct of the Respondent, what information it has about the financial circumstances of the Respondent and whether the Respondent has at any time been convicted of an offence to which Chapter 4 of the 2016 Act applies when considering the amount of such order. Whilst those listed factors must therefore be taken into account, and the Tribunal should have particular regard to them, they are not the entirety of the matters to be considered: other matters are not excluded from consideration. Any other relevant circumstances should also be considered, requiring the Tribunal to identify whether there are such circumstances and, if so, to give any appropriate weight to them.[84]The Tribunal is satisfied that there were failings on the part of the Respondent – the ones which the Tribunal takes account of the following:(a) No EICR was provided (Electrical Safety Standards in the Private Rented Sector (England) Regulation 2020;(b) A gas safety certificate was not provided at the start of the tenancy and no inspection took place during the course of the tenancy (s.36 The Gas Safety (Installation and Use) Regulations 1998;(c) A copy of an EPC was not provided (s.6 The Energy Performance of Buildings (England and Wales) Regulations 2012;(d) A copy of the How to Rent Guide was not provided (s.39 Deregulation Act 2015).[85]The Tribunal has also had regard to the allegations made about the condition of the Property. The Tribunal also has regard to the fact that the condition of the Property, generally, was good. It is clear some complaints were made to the Respondent. It did take some time for the oven to be fixed, but she did arrange for someone to attend relatively quickly once a report about the boiler was made. The Tribunal paid no regard to the issues raised about the identity of the contractor. The Tribunal did note the other issues raised (although, for the avoidance of doubt, the Tribunal only had regard to the allegations made during the period of the claim), but overall took the view that they added little to the deduction the Tribunal was minded to make in respect of the matters set out at paragraph 85 herein.[86]In summary, the Tribunal made an adjustment of the amount of the RRO, in the amount of 5%, i.e. deciding that a RRO should be made, reflecting 65% of the total rent paid for the relevant period. Whether the landlord has been convicted of an offence?[87]Section 44(4)(c) of the 2016 Act requires the Tribunal to take into account whether the Respondent has at any time been convicted of any of the offences listed in section 40(3). The Respondent has no such convictions. Financial circumstances of the Respondent[88]The Tribunal noted that, in the evidence it did have, the Respondent had asserted financial difficulties. The Tribunal, however, had nothing from the Respondent to evidence her financial circumstances. It is noted that the Property was rented out for at least two years and, as at August 2023, was being used as an “Airbnb”. The Tribunal did not attach any weight to the assertions made by Mr. Alshigri that the Respondent was an investment banker or owned another property as it was not clear where this information had come from and Ms. Alshigri did not attend the hearing.[89]The Tribunal makes no deduction in respect of the financial circumstances of the Respondent. The amount of the repayment[90]The Tribunal determines that the maximum repayment amount identified in paragraph 76 above should be discounted by 35% (i.e. the RRO is 65% of the rent paid in the material period). The Tribunal therefore orders under s.43(1) of the 2016 Act that the Respondent repay the Applicants (jointly) the sum of £25,740. The total award is apportioned between the Applicants as follows:(1) Mr. Bruin: £6,435(2) Mr. Parrett: £6,318(3) Ms. Lowther: £6,357(4) Ms. Alshigri: £6,630[91]The Tribunal has had regard to all the circumstances in setting a time for payment, including the amount of the RRO. The Tribunal orders repayment in 1 month from the date of this decision. Application for refund of fees[92]The Applicants asked the Tribunal to award the fees paid in respect of the application should they be successful, namely reimbursement of the £100 issue fee and the £200 hearing fee. The Tribunal does order the Respondent to pay the fees paid by the Applicants, in the sum of £300. Judge Sarah McKeown 29 August 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).