First-tier Tribunal Orders Rent Repayment for HMO Licensing Violation

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00FF/HMF/2024/0019

Property : 1, [NAME], [ADDRESS], York

Applicants : [redacted] [RESPONDENT] (2) [RESPONDENT]

Respondent: [redacted] : Application for Rent Repayment Order, section 43 of the Housing and Planning Act 2016

Tribunal Members : Tribunal Judge A M Davies

Tribunal Member J Gittus, MRICS

Date of Decision : 28 April 2025

DECISION

1. The Respondent is ordered to repay rent to the Applicants as follows: Applicant (1) [APPELLANT]: £1,166.72 Applicant (2) [APPELLANT]: £1,166.72

REASONS THE TENANCY 1. On 15 June 2023 the Respondent let his property 1 [NAME], York, to four unrelated tenants, two of whom were the Applicants. The tenancy was to take effect on 15 September 2023 and to continue for one year (366 days) at a rent of £7800 per tenant. The parties agreed separately that the rent would be payable

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monthly. Ms [NAME] had already occupied the property in previous years, with other co-tenants.

ADDITIONAL LICENSING SCHEME AND THE LAW 2. With effect from 1 April 2023 City of York Council applied to 8 of its electoral wards an “Additional Licensing of HMOs Scheme” pursuant to its powers under section 56 of the Housing Act 2004 (“the 2004 Act”). 1 [NAME] was an HMO within the area identified as requiring the owners of HMOs to apply for a licence.

3. Section 59 of the 2004 Act and Regulation 9 of the Licensing and Management of HMOs etc (Miscellaneous Provisions)(England) Regulations 2006 set out the publication requirements to be met by a housing authority which designates an area as being subject to Additional Licensing. These requirements include information to be displayed on public notice boards, published on the internet, published repeatedly in two local newspapers, and copied to interested persons and organisations. Additionally, prior to making a section 56 designation the housing authority must take reasonable steps to consult persons who are likely to be affected by the designation, and consider any representations made in accordance with the consultation. So far as is known, City of York Council complied with all these requirements.

4. The Respondent did not apply for a licence until 21 April 2024.

5. Section 43 of the Housing and Planning Act 2016 (“the 2016 Act”) provides that the Tribunal may make a rent repayment order if satisfied that a landlord has committed an offence under section 72(1) of the 2004 Act, that is, having control of or managing an HMO which is required to be licensed but for which there is no licence in force.

6. If the Tribunal decides to make a rent repayment order, section 44 of the 2016 Act sets out how the amount of the repayment is to be determined. So far as relevant to this application, the repayment must not exceed the amount of the rent which was paid by the applicant while an offence was being committed and must take account of the conduct of the landlord and tenant, and the financial circumstances of the landlord.

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THE APPLICATION 7. The Applicants applied for a rent repayment of £5,850 each, representing the rent they had paid at £650 per month for 9 months from September 2023 to May 2024 inclusive. The Respondent admitted the offence, but recalculated the rent paid from the start of the tenancy to the date on which he applied for a licence and submitted that the repayment should be reduced substantially, for the reasons set out in his representations.

8. The application was heard by video link on 28 April 2025. Ms [NAME] was not present, but was represented by [NAME]. Mr [RESPONDENT] represented himself. Both parties had provided the Tribunal with written representations and supporting documents.

THE APPLICANTS’ CASE 9. For the Applicants, Ms [NAME] said that they had been aware, the previous summer, that City of York Council intended to create an Additional Licensing Scheme, but they had not understood that it applied to the house they were renting. They were aware that it was an HMO, and had had difficulty obtaining an HMO parking permit but did not realise that this was, or might have been, because the HMO was not registered. They raised this difficulty with Mr [RESPONDENT]’s colleague but did not think that they had specifically mentioned to Mr [RESPONDENT] the possibility that the property should be licensed.

10. Ms [RESPONDENT] said that they would have expected Mr [RESPONDENT], as a professional landlord, to be aware of his responsibilities. Once he was made aware of the Additional Licensing Scheme and applied for a licence, he had a fire risk assessment carried out at the property and supplied a missing fire blanket in the kitchen.

11. So far as the tenants’ conduct was concerned, she said that she and Ms [NAME] had left the property a week earlier than the other two tenants, who had promised to clean that half of the property that she and Ms [NAME] had not cleaned. She had left the upper floor clean, but she and Ms [NAME] had moved away from York

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and had not been able to check the condition of the ground floor at the end of the tenancy.

THE RESPONDENT’S CASE 12. Mr [RESPONDENT] was aggrieved that despite his good reputation as a landlord and his long relationship with City of York Council in that capacity, no-one from the Council had ever mentioned the Additional Licensing Scheme to him, or warned him that a licence should be applied for. Although he lived in the city and kept up to date, he said, with the regulations relating to landlords, he had not heard of the [NAME] until 21 April 2024 when he immediately applied for (and obtained) a licence. His business involved running a portfolio of rented properties in the Hull area, and 1 [NAME] was the only let property he had in York. Because he was not sure of City of York Council’s licence requirements, he had a fire risk assessment carried out by a third party to support his licence application, and supplied a missing fire blanket. Otherwise the house was compliant. He told the Tribunal that it was an above-average modernised property and that he had always had a good relationship with his tenants.

DETERMINATION 13. The 2004 Act gives the Tribunal a discretion whether to make a rent repayment order or not. The Tribunal makes an order because Mr [RESPONDENT] is a professional landlord living in York who should be expected to make himself aware of local and national requirements for let properties. There were no financial circumstances relating to Mr [RESPONDENT] which would affect the amount of the rent to be repaid.

14. When considering the amount of the repayment order, the Tribunal had regard to the following: (1) Mr [RESPONDENT] had genuinely not known of the [NAME]. Given his long history and good reputation as a landlord in Hull and York, it is inconceivable that he would have chosen not to apply for a licence had he been aware of the Scheme. (2) An Additional Licensing Scheme is only permitted where a housing authority finds that housing standards are generally unacceptably low in a particular area. 1 [NAME] is an above- average house and well managed, and thus not the sort of let property that the Scheme was designed to improve. (3) City of York Council could have imposed a

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financial penalty for the offence, and had chosen not to do so. The Tribunal made no finding as to whether the Applicants had been aware of the need for a licence and had failed to pass information on to the Respondent, in breach of a term of their tenancy. The Tribunal found that the Applicants did not in any event know, until after 21 April 2024, that they could apply for a rent repayment order.

15. In view of the matters taken into consideration, the Tribunal determined that the rent repayment for each Applicant should be 25% of the rent paid during the relevant period. The rent paid has been calculated at £21.31 per day for 219 days, amounting to £4,666.89 per Applicant.

16. The Applicants requested reimbursement of Tribunal fees amounting to £330. No order is made in respect of the fees. In order to obtain a rent repayment, the Applicants had no alternative but to make a Tribunal application and the Respondent had no opportunity to settle the matter prior to the date of the application. The Tribunal considers that the Applicants should properly bear the cost of their application.