Flat 32 Albert Hall Mansions, Kensington Gore, London, SW7 2AW LON/00BK/HMF/2024/0118
DECISION
[1]The Tribunal finds that the Respondent has committed the offence of failing to license a House in Multiple Occupation (HMO) under the provisions of section 72(1) of the Housing Act 2004, and that accordingly Rent Repayment Orders in favour of each of the Applicants can be made. The Tribunal makes a Rent Repayment Order of £1,020 in favour of Wenjuan Liu and a Rent Repayment Order of £1,290.49 in favour of Alberto Castiglia. These must be paid by the Respondent within 28 days of the date of this decision.[2]The Tribunal also orders the reimbursement of the Tribunal fees (application and hearing fee) and this amount must be paid by the Respondent to the Applicants within 28 days of the date of this decision. The Application[3]On 12 March 2024 the Applicants made an application for Rent Repayment Orders (RROs) under section 41 of the Housing and Planning Act 2016 (the Act) in relation to Flat 32 Albert Hall Mansions, Kensington Gore, London, SW7 2AW (the Property).[4]The Tribunal made directions that each party was to provide their evidence to each other and the Tribunal and the matter was listed for final hearing. The Applicants provided a bundle of documents that consisted of 32 pages. However, the Respondent did not provide the Tribunal with any documents.[5]The hearing was initially listed on 7 October 2024, but was relisted to 10 January 2025 to allow the Respondent further time to consider the Applicants’ evidence as this was only sent to the Respondent on 4 October 2024. The Hearing[6]The Hearing took place on 10 January 2025. Alberto Castiglia attended and was represented by Alex Hoang. Wenjuan Liu did not attend but Alex Hoang confirmed that he was instructed to represent her. The Respondent did not appear, was not represented and did not provide the Tribunal with an explanation for this non-attendance or non-compliance with the Tribunal’s directions.[7]The Tribunal waited until 10.05am to allow the Respondent additional time to arrive, however the Respondent did not attend. The Tribunal was satisfied that the application had been properly served on the Respondent and that it was aware of the hearing. The Tribunal noted, in particular, that the Tribunal had written to the Respondent on 22 October 2024 enclosing an amended directions order and notifying it of the hearing date of 10 January 2025. Additionally, the Applicants confirmed that they had emailed the Respondent, including sending an email with the hearing bundle on 4 October 2024, and they had not received any message to say that the email had not been delivered.[8]The Tribunal, being satisfied that the Respondent was aware of the hearing, determined that it was in the interest of justice to proceed in the Respondent’s absence. In reaching this decision, the Tribunal considered rule 34 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 which provides that the Tribunal may proceed with the hearing in a party’s absence if 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 it is in the interest of justice to proceed. The Tribunal was satisfied that the Respondent had been notified of the hearing date by the Tribunal and the Applicants. Further, the Tribunal considered rule 3(2)(a) and 3(2)(e) which provides that the Tribunal must deal with cases proportionately and avoid delay. The Respondent had not provided any evidence to the Tribunal; however, the Applicants had attended the hearing and the Tribunal was ready to hear the case. Background[9]The Applicants submitted that the Property was a house in multiple occupation within an additional licensing area and so was required to be licensed; however, the Property was not so licensed. The Applicants therefore alleged that the Respondent was committing an offence under section 72(1) Housing Act 2004, namely of having control or management of a house in multiple occupation which was required to be licensed but was not so licensed.[10]The Applicants told the Tribunal that they had signed a tenancy agreement with the Respondent on 10 August 2023 and had moved into the Property after that date. The Applicants confirmed that the relevant period they were each seeking a RRO for was 10 September 2023 until 25 October 2023.[11]The Tribunal was satisfied that the application had been made by the applicants within the statutory time limit as the application had been made to the Tribunal on 12 March 2024 and the offence period claimed was until 25 October 2023. The application had therefore been brought within 12 months. The Law[12]Section 41(1) Housing and Planning Act 2016 states: “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”[13]Section 43(1) Housing and Planning Act 2016 states: “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)”[14]Section 40(3) Housing and Planning Act 2016 defines “an offence to which this Chapter applies” by reference to a table. The offence under section 72(1) Housing Act 2004 (control or management of unlicensed house) is within that table. Control or Management of Unlicensed HMO:[15]Section 72(1) Housing Act 2004 provides: “A person commits an offence if he is a person having control of or managing an HMO which is required to be licenced under this Part but is not so licensed.”[16]The City of Westminster Council Additional Licensing of Houses in Multiple Occupation Scheme came into force on 30 August 2021 and continues until 30 August 2026. The scheme applies to the whole area of the district of the City of Westminster, and therefore applies to the Property.[17]The designation applies to all HMOs as defined by section 254 of the Housing Act 2004 that are occupied by 3 or more persons comprising 2 or more households.[18]The relevant criteria for this application under section 254 is the standard test. This provides: (1)“For the purposes of this Act a building or 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 condition in subsection (3) (“the self-contained flat test”)(c) it meets the conditions in subsection (4) (“the converted building test”). The standard test is defined as: A building or a part of a building meets the standard test if– (a) it consists of one or more units of living accommodation not consisting of a self-contained flat or flats; (b) the living accommodation is occupied by persons who do not form a single household; (c) the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it;(d) their occupation of the living accommodation constitutes the only use of that accommodation;(e) rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation; and(f) two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities. Applicants’ Position[19]In support of their application for RROs, the Applicants produced financial penalty notices served by the City of Westminster (the Council) on the Respondent which related to the Property (pages 22 to 39 of the Applicant’s bundle). The Council had issued a notice of intent to issue a financial penalty under section 249A of the Housing Act 2004 and this had been served on the Respondent. The notice stated that the Council was satisfied beyond reasonable doubt that the Respondent had committed an offence under section 72 of the Housing Act 2004. The notice further stated that on 27 September 2023, the Council had inspected the Property and determined that the Property was a house in multiple occupation within the definition of section 254 of the Housing Act 2004 and therefore was required to be licensed under the Council’s additional licensing scheme. The notice also stated that the Respondent was the person managing the Property and was in receipt of rent payments from the occupying tenants. Finally, the notice stated that the Council intended to issue a final notice imposing a monetary penalty in the sum of £10,000 for failing to obtain a licence for the Property.[20]At page 33 of the Applicants’ bundle, they produced the final notice issued by the Council. This notice confirmed that on 21 September 2023, the Council considered the Respondent to have committed the offence of managing a property without a licence under section 72 Housing Act 2004 and imposed the penalty of £10,000. Occupation of the Property[21]The Applicants confirmed that although they had signed their agreement and had taken the keys to the Property in August 2023, they had not lived at the Property as their only or main residence until September 2023. The Applicants therefore confirmed to the Tribunal that the period in which there were three people living at the Property in separate households using the Property as their only or main residence was from 10 September 2023 until 25 October 2023.[22]The Applicants’ evidence was that Wenjuan Liu had moved into the Property on 25 August 2023, Alberto Castiglia had moved into the Property on around 8 September 2023 and Hannah Constia had moved into the Property on around 6 September 2023. The Applicants therefore asked the Tribunal to consider the relevant date when three people were living in the Property as their only or main residence as being from 10 September 2023.[23]The Applicants confirmed that the last date then three people lived at the Property was 25 October 2023. The relevant period is therefore 10 September 2023 to 25 October 2023.[24]The Applicants confirmed that they had each rented a room which constituted living accommodation which did not consist of a self-contained flat or flats. Further, the Applicants confirmed that they had each formed a separate household. This was supported by the email sent by the Respondent to a tenant (page 20 to 21 of the Applicants’ bundle). The email, which was dated 11 September 2023, stated that it was not possible for individual rooms to be rented and therefore the Applicants were required to vacate the Property no later than 10 November 2023.[25]In terms of the facilities at the Property, the Applicants confirmed that they shared cooking, personal washing and toilet facilities and their occupation of the living accommodation constitutes the only use of that accommodation. Tribunal Decision - Was the Property an HMO that was required to be licensed?[26]The Tribunal accepts the evidence of the Applicants that the Property met the criteria to be licensed under the Council’s Additional Licensing Scheme. The Tribunal further determines that the applicable test is the standard test and that the Property met this test for the Relevant Period.[27]The Tribunal finds the Applicants to be credible witnesses and finds that the Property consisted of one or more units of living accommodation not consisting of a self-contained flat or flats and that the occupiers did not form a single household. Additionally, the occupiers were occupying the Premises as their main residence, paying rent, and there were two or more households occupying the Property who were sharing toilet, personal washing and cooking facilities. The Property was therefore required to be licensed but was not so licensed.[28]The Tribunal has also taken into account that the Council had issued a civil penalty because it found, following an inspection on 27 September 2023, that the offence of being the person managing an HMO which is required to be licensed but was not so licensed was committed under section 72 (1) Housing Act 2004. Person having Control of or Managing[29]The section 72(1) offence is committed by the person having control/managing the Property. Section 263(1) Housing Act 2004 defines “person having control” in relation to the premises as “the person who received the rack-rent of the premises (whether on his own account or as agent or trustee of another person). Section 263(2) defines “person managing” as the person who, being an owner or lessee of the premises (a) received (whether directly or through an agent or trustee) rents or other payments (i) in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises.[30]It is now well established that a RRO may only be made against the immediate landlord.[31]At pages 43 to 54 of the Applicants’ bundle, the Applicants had produced their “room rental agreement”. This agreement stated that Renting Smart were the landlord of the Property; further, the Applicants confirmed that they paid their monthly rent to the Respondent. Additionally, the Tribunal noted that the Council had served the penalty notices on Renting Smart Ltd, the Respondent.[32]The Tribunal is therefore satisfied that the Respondent was collecting rent and, as such, was the “person having control” for the purposes of the section 72(1) offence.[33]The Tribunal therefore finds beyond reasonable doubt that for the period 10 September 2023 to 25 October 2023 the Respondent was managing an HMO without a license. Statutory Defence – Section 72(4)(b)/Reasonable Excuse[34]The Respondent did not provide any evidence to the Tribunal. The Tribunal considered the evidence before it and did not find, on a balance of probabilities, that the Respondent had a defence.[35]There was no evidence before the Tribunal that any application for a licence had been made and no evidence that would constitute a reasonable excuse. Should the Tribunal Make RROs?[36]Section 43 Housing and Planning Act 2016 provides that the Tribunal may make a RRO if it is satisfied beyond reasonable doubt that the offence has been committed. The decision to make a RRO award is therefore discretionary. However, because the offence was established the Tribunal finds no reason why it should not make RROs in the circumstances of this application. Ascertaining the Whole of the Rent for the Relevant Period[37]Wenjuan Liu paid rent of £1,400 for the Property for 10 September 2023 until 9 October 2023 and Alberto Castiglia paid rent for 10 September 2023 until 25 October 2023. The total amount of rent claimed by Wenjuan Liu was £1,400 (one month’s rent) and for Alberto Castiglia the total amount of rent claimed was £1,780.65 (one month’s rent at £1,200 and £580.65 for the period 10 October to 25 October 2023). Deductions for Utility Payments that Benefit the Tenant[38]The Applicants confirmed to the Tribunal that utility bills were paid by the Landlord.[39]When determining the amount of a RRO, the Tribunal has a discretion whether or not to make a deduction for utility payments. Acheampong v Roman [2022] UKUT 239 confirmed that it will usually be appropriate to deduct a sum representing utilities.[40]The Applicants, quite understandably, were not aware of the amount that the Respondent paid by way of utilities and the Respondent had not provided the Tribunal with any information. The Tribunal using its own expertise determined that £40 per month per tenant should be deducted for utility payments. That means that for Wenjuan Liu there is a deduction of £40 and for Alberto Castiglia there is a deduction of £60. Determining the Seriousness of the Offence to Ascertain the Starting Point[41]The Tribunal had to consider the seriousness of the offence compared to other types of offences for which a RRO could be made, and also as compared to other examples of the same offence.[42]In determining the seriousness of the offence, the Tribunal adopted Judge Cooke’s analysis in Acheampong v Roman [2022] that the seriousness of the offence could be seen by comparing the maximum sentences upon conviction for each offence. Using this hierarchical analysis, the relevant offence of having control or managing an unlicensed house would generally be less serious. However, the Tribunal had to consider the circumstances of this particular case as compared to other examples of the same offence. Conduct of Landlord and Tenant[43]The Applicants raised the following issues of conduct:• they were not provided with the energy rating certificate, the “How to Rent” guide and details of the deposit scheme• they were illegally evicted• the heater was not working• there were fire safety breaches.[44]In terms of the energy rating certificate, “How to Rent” guide and the deposit scheme, the Applicants’ evidence to the Tribunal was that they had not been provided with them when they had moved into the property.[45]The Tribunal accepts the submissions of the Applicants and finds that there is no evidence that the Applicants were provided with a copy of the “How to Rent” guide, energy performance certificate or details of the deposit scheme.[46]As to the alleged illegal eviction, the Applicants told the Tribunal that a tenant had been sent a letter on 27 September 2023 (pages 20 – 21 of the Applicants’ bundle) telling them that they must move out of the Property by 10 November 2023.[47]The Tribunal finds that the Respondent did not provide the Applicants with proper notice to leave the Property and finds this to be an aggravating factor. The Tribunal notes that in the letter sent by the Respondent it did offer to help the Applicants find alternative accommodation. However, the Tribunal finds that the Respondents should not have rented the Property as an HMO in the first place and therefore this does not provide mitigation for the Respondent.[48]The Applicants told the Tribunal at the hearing that the heater was not working, however this detail was not provided within the Applicants’ bundle and therefore this is not something that the Tribunal has considered further.[49]Finally, the Applicants told the Tribunal at the hearing that the doors were wooden doors, but they did not think these were fire doors. Again, no detail of this was provided within the Applicants’ bundle and therefore the Tribunal has not taken this into account. Financial Circumstances of Respondent Landlord[50]The Respondent did not provide the Tribunal with any financial information. The Tribunal was therefore not presented with any evidence that the Respondent would not be able to meet any financial award the Tribunal made. Whether Respondent Landlord has been convicted of offence[51]The Tribunal was not presented with any evidence that the Respondent had been convicted of any offence within the table at section 45 Housing and Planning Act 2016.[52]As set out above the Tribunal notes that the Council issued a final notice imposing a financial penalty. Section 46 Housing Act 2004 states that in certain cases whether the landlord has been convicted or received a financial penalty the maximum amount of rent repayment should be ordered, unless exceptional circumstances apply. However, this does not apply to tenant applications for a section 72(1) offence. Respondent as a Professional Landlord[53]The Tribunal finds that the Respondent was a professional landlord given it was a company that rented out property. Therefore, the Tribunal finds that the Respondent should have had systems in place to ensure that its obligations as a landlord were met. This is therefore an aggravating factor. Quantum Decision[54]Taking all of the factors outlined above into account, the Tribunal finds that this licensing offence is not the most serious under the 2016 Act. The Tribunal concludes that taking the factors of this particular case into account, a RRO of 75% should be made in favour of each Applicant.[55]The Tribunal therefore makes RROs as follows: Wenjuan Liu: Total Claim - £1,400 Less utilities - £40 75% of which gives a total amount of £1,020 Alberto Castiglia: Total Claim - £1,780.65 Less utilities £60 75% of which gives a total amount of £1,290.49[56]The Tribunal orders that payment be made in full within 28 days. Application Fees[57]The Applicants asked the Tribunal to make an order refunding the fees that the Applicants had paid.[58]Given that the Tribunal has made RROs, the Tribunal exercises its discretion and orders that the Respondent must pay the Applicants’ Tribunal fees. This amount shall be paid within 28 days. Judge Bernadette MacQueen Date: 10 February 2025 ANNEX – 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 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 to 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 (ie 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.