First-tier Tribunal Denies Tenants' Request for Rent Repayment Order

OUTCOME: Refused

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00AP/HMF/2024/0006 Property : 9, [ADDRESS], London. [POSTCODE]

Applicants : [redacted] (2)[COUNSEL] [NAME] : Not represented Respondents : [redacted] Representative : Mr. [COUNSEL] [NAME] (compliance officer) Type of application : Application for a rent repayment order by tenants Tribunal : Judge S.J. [NAME] Tribunal Member [NAME], CEnvH Date and Venue of Hearings : 13 [ADDRESS] [POSTCODE] Date of Decision : 5 September 2024

DECISION

(1) The Application for a Rent Repayment Order under section 43 of the [NAME] is refused. (2) The application for an order under rule 13(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 for the re-imbursement by the Respondent of the fees of £300 paid by the Applicants in bringing this application is refused. (3) The Respondent’s application for costs is refused.

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Reasons

The Application 1. The First Applicant initially sought a rent repayment order pursuant to sections 43 and 44 of the [NAME] (“the Act”) for the 12 month period of his tenancy. It was asserted in this application that the Respondent had committed an offence of having control of or managing an unlicensed HMO.

2. Directions in respect of this application were issued on 12 January 2024.

3. On 17 March 2024 the Applicant sent an amended application to the Tribunal. This differed from the first in two ways. Firstly, it named the [NAME] Applicant as a party to the application. Secondly it now asserted that the Respondent was guilty of harassment and/or illegal eviction contrary to sections 1(2), (3) and/or (3A) of the Protection from Eviction Act 1977 (“the 1977 Act”). The First Applicant still sought an order for the 12 months of his tenancy – an amount of £10,800, and the [NAME] Applicant sought an order for the whole of the period she was in occupation, a sum of £8,637.70. The allegation in respect of the licensing offence was dropped, doubtless because the evidence showed that the Respondent had applied for a licence on 22 May 2022 and so had a statutory defence.

4. Further directions were issued by the Tribunal on 22 April 2024. The Tribunal approved the addition of the [NAME] Applicant and the amendment to the grounds of the application.

5. The revised application is dated 17 March 2024 and so is in time. In it the Applicants allege that the Respondent pressured occupants of the property into leaving before the end of their fixed term contracts, and that they did indeed move out as a result.

Materials 6. In compliance with the directions both parties produced a bundle of documents. That from the Applicants consisted of 195 pages and that from the Respondent contained 219 pages. Reference to page numbers beginning with A are to the Applicants’ bundle and those prefaced by R are to the Respondent’s bundle. In each case the reference is to the page number which appears printed on the document in question.

7. The Applicants’ bundle included a statement of case (page 30) and witness statements from the First Applicant, Mr. [APPELLANT] (pages 191 and 192) and the [NAME] Applicant, Ms. [APPELLANT] (page 194). The Respondent’s bundle included a statement of reasons (pages 10-12) and a witness statement from Mr. [RESPONDENT] [NAME], a director of the Respondent (pages 13-16).

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The Hearing 8. The hearing was conducted face-to-face. Both Applicants attended. The Respondent was represented by Mr. [RESPONDENT], who described himself as a compliance officer. Mr. [NAME], the director who had prepared a witness statement, did not attend.

9. In the course of the hearing, the two Applicants adopted their witness statements. They were not asked any questions in cross-examination and so the Tribunal accepted the contents of those statements as being unchallenged – save where there were obvious inconsistencies. As Mr. [NAME] did not attend and so was not able to be cross-examined, the Tribunal attached less weight to the contents of his statement.

The Legal Background 10. The relevant legal provisions are partly set out in the Appendix to this decision.

11. The Tribunal may make a rent repayment order when a landlord has committed one or more of a number of offences listed in section 40(3) of the Act. These include the offences set out below.

Offences Under the 1977 Act 12. Section 1(2) of the 1977 Act makes it an offence to unlawfully deprive a residential occupier of occupation or to attempt to do so. For this offence to be committed there must be an actual eviction. It was accepted by the Applicants that that was not the case here as both left the property voluntarily.

13. Section 1(3) of the 1977 Act provides as follows “If any person with intent to cause the residential occupier of any premises (a) to give up the occupation of the premises or any part thereof; or (b) to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof; does acts likely to interfere with the peace or comfort of the residential occupier or members of his household, or persistently withdraws or withholds services reasonably required for the occupation of the premises in question as a residence, he shall be guilty of an offence”.

14. Section 1(3A) of the 1977 Act states as follows; “Subject to subsection (3B) below, the landlord of a residential occupier or an agent of the landlord shall be guilty of an offence if (a) he does acts likely to interfere with the peace or comfort of the residential occupier or members of his household, or (b) he persistently withdraws or withholds services reasonably required for the occupation of the premises in question as a residence and (in either case) he knows, or has reasonable cause to believe, that that conduct is likely to cause the residential occupier to give up the occupation of the whole or part of the premises or to refrain from

4 exercising any right or pursuing any remedy in respect of the whole or part of the premises” Subsection (3B) provides for a reasonable excuse defence.

15. Although the evidence suggested that there were threats to withdraw services, it was not suggested by the Applicants that any services were actually withdrawn. It follows that, for the Applicants to succeed, they must show that the Respondent acted in a way which was likely to interfere with their peace or comfort and, at the very least, that the Respondent had reasonable cause to believe that the way they acted was likely to cause them to give up their occupation of the premises or refrain from pursuing any remedy.

16. In the case of any offence an order may only be made under section 43 of the Act if the Tribunal is satisfied beyond reasonable doubt that that offence has been committed.

Has an Offence Been Committed? 17. The first question for the Tribunal to answer was whether or not an offence had been committed as, if the Applicants could not show this was the case beyond reasonable doubt, then the Tribunal would have no jurisdiction to make an order.

18. In answering this question, the Tribunal gave some attention to the fact that the Respondent in this case is a body corporate. It was conscious of the fact that not every act committed by an employee of a company will necessarily result in criminal liability of that company, as is made clear by the leading case of [COMPANY] -v- Nattrass [1972] AC 153. It was also aware of the decision in Peterborough City Council - v- Quereshi [2016] EWCA Crim 1584 which makes it clear that an offence under section 1(3A) of the 1977 Act cannot be committed vicariously. There must be proof of actual participation by the defendant.

19. However, in the interests of simplicity, the Tribunal first considered whether the conduct established by the Applicants amounted to an offence before going on to consider, if necessary, questions of corporate responsibility.

Findings of Fact 20. On the basis of the witness statements and [NAME] evidence provided by the Applicants the Tribunal was satisfied of the following.

21. The First Applicant, Mr. [APPELLANT], moved into the property on 3 November 2022, having entered into an assured shorthold tenancy agreement with the Respondent on 14 October 2022 (page A48). The term of that tenancy was a year from 3 November 2022 to 2 November 2023 (clause 1.6.1 at page A49).

22. The [NAME] Applicant, Ms. [APPELLANT], moved into the property in December 2022, having entered into an assured shorthold tenancy

5 agreement with the Respondent on 21 December 2022 (page A116). The term of that tenancy was a year from 4 January 2023 to 3 January 2024 (clause 1.6.1 at age A117).

23. On 19 July 2023 the Respondent decided that they wished to regain possession of the property. This is accepted by Mr. [NAME] in his witness statement (para 4 at page R14). On 21 July 2023 a meeting took place at the property attended by a number of tenants, though not the Applicants, at which the Respondent notified the tenants of their intentions (see para 5 at page R14 and para 2 at page A191). The tenants were told that the Respondent wanted to regain possession by 18 September 2023. This is made clear by an e-mail from Mr. [APPELLANT], the property manager, to the First Applicant dated 21 July 2023 (page A31). This date, was, of course, earlier than the contractual date contained in the tenancies of both Applicants.

24. The First Applicant raised the fact that possession was being sought early to which he received a reply on 3 August 2023 stating that the Respondent was seeking possession on 18 September. The reply also stated that the Respondent would send him options if he needed help finding a place to live (page A32).

25. In his statement of case, the First Applicant says that the [NAME] Applicant was notified in person by the Respondent that the [NAME] would be shut off if the tenants were not out by 18 September (page A32). However, in his witness statement (para 6 at page A191) he stated “the landlord had said to [NAME] tenants in person that [NAME] would be shut off if they weren’t out by 18th September”. He does not say that he was told this himself nor does he say that this was what the [NAME] Applicant was told. In her own witness statement, the [NAME] Applicant says that the landlord had told [NAME] tenants in person that the [NAME] would be shut off if they weren’t out by 18 September (page A191). She too does not say that she was told this herself nor does she say this was said to the First Applicant.

26. In the circumstances, the Tribunal was not satisfied that either of the Applicants were themselves told personally by any of the Respondent’s employees or officers that the [NAME] would be shut off.

27. The [NAME] Applicant moved out of the property on 6 September 2023, this being the end of the period for which an order was sought (see the statement of case at page A30). Before moving out, the [NAME] Applicant received a number of text messages from the Respondent. These are at pages A38 to A40. They relate to the [NAME] Applicant seeking to find alternative accommodation. They contain no threats.

28. The First Applicant remained at the property after the [NAME] Applicant moved out. On 19 September 2023 he received a text message from the Respondent stating that new tenants would be moving in on 25 September and prior to that all [NAME] would be disconnected (pages A33 and A34). Within a few minutes the [NAME] replied stating that to cut off the [NAME] would be illegal and suggesting that they did not (page A35). The Respondent then asked if he wanted help finding another property, to which he replied that he had a fixed term tenancy until 2 November (page A35). The Respondent replied stating that they were aware of this and stated that they may be able to help to assist with some costs towards a new place if needed (page A36), and that they could arrange a discounted rent (page A37). Thereafter the Respondent sent details of numerous alternative properties to the First Applicant (pages A41 to A45).

29. A valid section 21 notice was served on the First Applicant on 22 September 2023 with possession being required by 23 November 2023. He in fact found alternative accommodation and moved out before the section 21 deadline. The [NAME] were never cut off.

30. Based on this evidence the Tribunal considered whether it was satisfied so that it was sure that there had been any acts directed to either of the Applicants which were likely to interfere with their peace or comfort.

31. With regard to the [NAME] Applicant, the only things of which the Tribunal was sure was that she was told by the Respondent that they wanted to recover possession early and that there was correspondence between her and the Respondent about finding alternative accommodation. As explained above, it was not satisfied to the criminal standard that she herself was told that the [NAME] would be disconnected.

32. In the view of the Tribunal, this falls far short of what is required to establish an offence of harassment. Whilst the [NAME] Applicant had a contractual right to remain in occupation until January 2024, there is nothing wrong with a landlord seeking to obtain possession early provided they do so lawfully. There is nothing unlawful in a landlord informing a tenant that they would like them to move out early and offering incentives or assistance to move. The [NAME] Applicant has provided no [NAME] evidence to show that the Respondent did anything [NAME] than ask her to leave early.

33. With regard to the First Applicant, the situation is a little more complex. Much of the correspondence between the Respondent and the First Applicant is unobjectionable. It is clear that the Respondent told him that they want the property back early and he replied by asserting his legal right to remain. It is also clear that the Respondent was seeking to persuade him to move out, offering assistance with finding alternative accommodation and even going so far as to offer to meet some of his costs of re-locating. None of that, in the view of the Tribunal, amounts to conduct likely to interfere with the First Applicant’s peace or comfort. Whilst it is conceivable that a deluge of texts with details of [NAME] properties to let may possibly be so extensive as to interfere with a person’s peace or comfort, in the same way that repeated messages from a stalker would cause such discomfort, the First Applicant’s evidence was that the texts were no more than daily,

7 and only four pages of such texts have been provided in evidence. That is not enough, in the Tribunal’s judgment, to amount to conduct likely to interfere with his peace or comfort.

34. The one aspect of this case which does cause more concern is the statement in the text message of 19 September 2023 that the [NAME] would be cut off before the new tenants moved in on 25 September. In the Tribunal’s view that message must be seen in the context of the fact that the First Applicant had already made it clear to the Respondent that he was aware of his rights, the fact that he immediately replied, warning the Respondent that to do so would be illegal, and the fact that there is no evidence that this threat was ever repeated or acted upon.

35. The question for the Tribunal was whether this one text, when taking in context and bearing in mind the [NAME] steps taken by the Respondent to seek to persuade the First Applicant to leave, was enough to amount to conduct likely to interfere with the First Applicant’s peace or comfort. Had the Tribunal been satisfied that this threat had been repeated, especially if it were repeated after the Respondent was warned that to cut off the [NAME] would be illegal, then it would probably have been satisfied that the offence was made out. However, the evidence does not go that far. Rather, once the Respondent is told that to cut off the [NAME] would be illegal, they immediately change tack and no further mention is made of this.

36. Whilst the decision was not an easy one, the Tribunal was conscious that the criminal standard of proof sets a high bar to cross. Taking everything into account it was not satisfied to the criminal standard that what the Respondent did amounted to conduct likely to interfere with the First Applicant’s peace and comfort.

37. That being the case, it was not necessary to address the complex issues of corporate responsibility. On the basis of the evidence before it the Tribunal was not satisfied that an offence under the 1977 Act had been committed.

Conclusions 38. For the reasons set out above the Tribunal decided that no offence had been committed and, therefore, it had no jurisdiction to make a rent repayment order. The Applicants’ application was, therefore, refused.

39. The Applicants also sought an order under rule 13(2) of the Rules for the re-imbursement of the fees paid for bringing the Application. The Tribunal concluded that, given that the Applicants had failed in their application, it was not just and equitable to make such an order.

40. In their statement of case the Respondent invited the Tribunal to make an order for costs (para 16 at page R15). No particulars were provided and the application was not expanded upon by Mr. [NAME] at the hearing. The Tribunal’s power to make an award of costs is limited. In order to be successful an applicant for an order for costs must, apart

8 from anything else, show that the [NAME] party has acted unreasonably. The Tribunal was not satisfied that there was anything in the material before it to suggest that either Applicant had behaved unreasonably and so the application for costs was refused.

Name: Judge S.J. [NAME]: 5 September 2024

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ANNEX - RIGHTS OF APPEAL

• The Tribunal is required to set out rights of appeal against its decisions by virtue of the rule 36 (2)(c) of the Tribunal Procedure (First-tier Tribunal)([NAME]) Rules 2013 and these are set out below.

• If a party wishes to appeal against 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.

Appendix of relevant legislation

Housing Act 2004

Section 72 Offences in relation to licensing of HMOs (1) A person commits an offence if he is a person having control of or managing an HMO which is required to be licensed under this Part (see section 61(1)) but is not so licensed. (2) A person commits an offence if– (a) he is a person having control of or managing an HMO which is licensed under this Part, (b) he knowingly permits another person to occupy the house, and (c) the [NAME] person's occupation results in the house being occupied by more households or persons than is authorised by the licence. (3) A person commits an offence if– (a) he is a licence holder or a person on whom restrictions or obligations under a licence are imposed in accordance with section 67(5), and

10 (b) he fails to comply with any condition of the licence. (4) In proceedings against a person for an offence under subsection (1) it is a defence that, at the material time– (a) a notification had been duly given in respect of the house under section 62(1), or (b) an application for a licence had been duly made in respect of the house under section 63, and that notification or application was still effective (see subsection (8)). (5) In proceedings against a person for an offence under subsection (1), (2) or (3) it is a defence that he had a reasonable excuse– (a) for having control of or managing the house in the circumstances mentioned in subsection (1), or (b) for permitting the person to occupy the house, or (c) for failing to comply with the condition, as the case may be. (6) A person who commits an offence under subsection (1) or (2) is liable on summary conviction to a fine. (7) A person who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale. (7A) See also section 249A (financial penalties as alternative to prosecution for certain housing offences in England). (7B) If a local housing authority has imposed a financial penalty on a person under section 249A in respect of conduct amounting to an offence under this section the person may not be convicted of an offence under this section in respect of the conduct. (1) For the purposes of subsection (4) a notification or application is “effective” at a particular time if at that time it has not been withdrawn, and either– (a) the authority have not decided whether to serve a temporary exemption notice, or (as the case may be) grant a licence, in pursuance of the notification or application, or (b) if they have decided not to do so, one of the conditions set out in subsection (9) is met. (2) The conditions are– (a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of the appropriate tribunal) has not expired, or (b) that an appeal has been brought against the authority's decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn. (3) In subsection (9) “relevant decision” means a decision which is given on an appeal to the tribunal and confirms the authority's decision (with or without variation). 263 Meaning of “person having control” and “person managing” etc. (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

11 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 [NAME] 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 [NAME] 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 [NAME] receives the rents or [NAME] payments; and includes, where those rents or [NAME] payments are received through another person as agent or trustee, [NAME]. (4) In its application to Part 1, subsection (3) has effect with the omission of paragraph (a)(ii). (5) References in this Act to any person involved in the management of a house in multiple occupation or a house to which Part 3 applies (see section 79(2)) include references to the person managing it.

[NAME] 4 RENT REPAYMENT ORDERS Section 40 Introduction and key definitions (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. (3) A reference to “an offence to which this Chapter applies” is to an offence, of a description specified in the table, that is committed by a landlord in relation to housing in England let by that landlord.

Act section general description of offence 1 Criminal Law Act 1977 section 6(1) violence for securing entry 2

Protection from Eviction Act 1977 section 1(2), (3) or (3A) eviction or harassment of occupiers

12 3

Housing Act 2004 section 30(1)

failure to comply with improvement notice 4

section 32(1) failure to comply with prohibition order etc 5

section 72(1)

control or management of unlicensed HMO 6

section 95(1)

control or management of unlicensed house 7 This Act section 21 breach of banning order (4) For the purposes of subsection (3), an offence under section 30(1) or 32(1) of the Housing Act 2004 is committed in relation to housing in England let by a landlord only if the improvement notice or prohibition order mentioned in that section was given in respect of a hazard on the premises let by the landlord (as opposed, for example, to common parts). Section 41 Application for rent repayment order (1) A tenant or a local housing authority may apply to the First-tier Tribunal for a rent repayment order against a person who has committed an offence to which this Chapter applies. (2) A tenant may apply for a rent repayment order only if — (a) the offence relates to housing that, at the time of the offence, was let to the tenant, and (b) the offence was committed in the period of 12 months ending with the day on which the application is made. (3) A local housing authority may apply for a rent repayment order only if— (a) the offence relates to housing in the authority's area, and (b) the authority has complied with section 42. (4) In deciding whether to apply for a rent repayment order a local housing authority must have regard to any guidance given by the Secretary of State. Section 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); (b) section 45 (where the application is made by a local housing authority); (c) section 46 (in certain cases where the landlord has been convicted etc). Section 44 Amount of order: tenants

13 (1) Where the First-tier Tribunal decides to make a rent repayment order under section 43 in favour of a tenant, the amount is to be determined in accordance with this section. (2) The amount must relate to rent paid during the period mentioned in the table. If the order is made on the ground that the landlord has committed the amount must relate to rent paid by the tenant in respect of an offence mentioned in row 1 or 2 of the table in section 40(3) the period of 12 months ending with the date of the offence an offence mentioned in row 3, 4, 5, 6 or 7 of the table in section 40(3) a period, not exceeding 12 months, during which the landlord was committing the offence (3) The amount that the landlord may be required to repay in respect of a period must not exceed— (a) the rent paid in respect of that period, less (b) any relevant award of universal credit paid (to any person) in respect of rent under the tenancy during that period. (4) In determining the amount the tribunal must, in particular, take into account— (a) the conduct of the landlord and the tenant, (b) the financial circumstances of the landlord, and (c) whether the landlord has at any time been convicted of an offence to which this Chapter applies. Section 52 Interpretation of Chapter (1) In this Chapter— “offence to which this Chapter applies” has the meaning given by section 40; “relevant award of universal credit” means an award of universal credit the calculation of which included an amount under section 11 of the Welfare Reform Act 2012; “rent” includes any payment in respect of which an amount under section 11 of the Welfare Reform Act 2012 may be included in the calculation of an award of universal credit; “rent repayment order” has the meaning given by section 40. (2) For the purposes of this Chapter an amount that a tenant does not pay as rent but which is offset against rent is to be treated as having been paid as rent.