Local Housing Authority Secures Rent Repayment Order Against Unlicensed Property Owner

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00BB/HSR/2015/0019 Property : Flat 21 Castle point, [ADDRESS], [POSTCODE] Applicant : [redacted] Representative : Mr [COUNSEL] (Counsel) Respondent : [redacted] : No appearance Type of Application : Application by Local Authority for a Rent Repayment Order under Housing Act 2004

Tribunal Members : Judge [NAME] and venue of Hearing : 9 [ADDRESS] [POSTCODE] Date of Decision : 11 March 2016

DECISION

We order Ms [NAME] to repay to the London Borough of Newham the sum of £8,377.00 in respect of Housing Benefit paid in connection with the occupation of part or parts of the property at [ADDRESS], [POSTCODE].

2

The Application

1. This is an application by the London Borough of Newham (“Newham”) for a rent repayment order pursuant to section 96(5) of the Housing Act 2004 (“the Act”). The application, which was issued on 21 December 2015, relates to [ADDRESS], [POSTCODE] (“the property”).

2. On 22 December, the Tribunal gave Directions. The Respondent was urged to seek independent legal advice. The Respondent was required to file a Bundle setting out her reasons for opposing the application and enclosing any evidence upon which she sought to rely by 1 February 2016. Such evidence should include a statement as to any exceptional circumstances that could justify a reduction in the amount of any rent repayment order. The parties were warned of the consequences of failing to comply with the Directions.

3. On 17 February, the Applicant filed their bundle of Documents in support of their application. The Applicant relies on:

(i) a statement by Ms [APPELLANT], an Environmental Health Officer in their Private Housing and Environmental Health Team, dated 15 December 2015 (p.23); and

(ii) a statement by Mr [NAME], a Senior Housing Benefit and Council Tax Benefit Officer, dated 24 March 2015 (at p.179). Mr [NAME] attaches a schedule setting out the housing benefit paid to Mr [RESPONDENT] (p.201).

4. The Respondent has failed to engage with this application. On 22 December, the Tribunal sent a copy of the application to the Respondent at the property. On 23 December, the Tribunal sent her the Directions. These were both returned to the Tribunal marked “Not known at this address”. On 11 January, the Tribunal sent the Respondent copies of both letters and the enclosures to 7 [ADDRESS], [POSTCODE]. This was also returned to the Tribunal. On 1o February, the Tribunal wrote to both addresses notifying the Respondent that the matter was to be determined on 9 March. These were also returned. The matter was considered by a Procedural Judge who requested the Applicant to e-mail the Respondent a copy of the bundle at [EMAIL]. On 4 March, the Respondent e-mailed a copy of the Bundle to the Respondent. The e-mail bounced back. On 1 March, the Tribunal had also sought to e-mail the Respondent with a copy of the Directions. The Tribunal is satisfied that the Respondent has been properly served with these proceedings.

5. The relevant legislation is set out in the Appendix to this decision. These are penal provisions (see Parker v Waller [2012] UKUT 301 (LC)). We require clear and cogent evidence as to the sum that the Applicant is seeking to recover. The Applicant must satisfy us that they have complied with all the legal steps necessary to establish their statutory entitlement to a rent repayment order.

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6. The Applicant was represented by Mr [COUNSEL] (Counsel). He adduced evidence from Ms [COUNSEL] and Mr [COUNSEL]. The Respondent did not appear.

The Background

7. On 1 January 2013, the Applicant introduced a selective licensing scheme. On 6 February 2014, the Applicant wrote to the Respondent at the property and at 30 [ADDRESS], [POSTCODE], an address held by the Applicant’s council tax records. These letters informed the Respondent of the requirement to licence the property and the consequences of failure to licence it. No response was received and on 21 February a further letter was sent. On 10 September, an officer visited the property and spoke to the tenant, Mr [APPELLANT]. He has provided a statement which is at p.205.

8. On 11 September 2014, Mr [RESPONDENT] telephoned the Respondent who confirmed that she had received the warning letter and stated that she had started an on- line license application. The Respondent submitted an application form (at p.109). However, the appropriate fee was not paid (the proffered cheque bounced) and insufficient information was provided.

9. On 24 March 2015, the Applicant served a Notice of Intended Proceedings on the Respondent (p.131). The notice informed the Respondent of Newham’s intention to apply for a rent repayment order. It set out the reasons for the intended application. It stated that the Respondent would seek to recover the sum of £8,377.00. It invited the Respondent to make written representations within 28 days.

10. On 28 April (at p 151), the Respondent provided written representations in response to the Notice. On 18 May (at p.157), the Applicant provided a detailed response to these representations. The Applicant concluded that the matters raised did not provide a basis for them to desist from seeking a rent repayment order. On 30 May (p.159), the Respondent took issue with this response.

11. On 16 April 2015, the Respondent was convicted of an offence contrary to Section 95(1) of the Act in that she was a person having control of managing the property, which was required to be licensed under Part 3 of the Act, but which was not so licensed (at p.149). She was fined £5,000. She appealed, but this was out of time. On 22 September, the Respondent withdrew her appeal (p.173).

12. On 21 December 2105, the Applicant made this application for a rent repayment order (at p.17). In his statement (at p.179), Mr [APPELLANT] states that the Applicant are seeking to recover the sum of £8,377 in respect of housing benefit paid in respect of the property between 25 March 2014 and 22 March 2015.

4 Our Decision

13. The Tribunal has before it Official Copy Entries which confirm that [NAME] was registered as owner of the freehold interest in the property on 27 September 2006 (p.79).

14. The Notice of intended Proceedings was served on 24 March 2015. Liability runs from “any time within the period of 12 months ending with the date of the notice of intended proceedings” (Section 96(6)).

15. The Applicant have provided a schedule showing full details of housing benefit payments made during the relevant period (at p.201). This related to the housing benefit paid between 25 March 2014 and 22 March 2015.

16. On the basis of this evidence, we are satisfied that the following have been established by clear and cogent evidence:

(i) The property was, during the period from 25 March 2014 and 22 March 2015 an unlicensed house within the meaning of section 95(1). We were told that it remains unlicensed.

(ii) During the period between 25 March 2014 and 22 March 2015, the Applicant paid housing benefit in the sum of £8,377.00.

(iii) The Respondent was at all times the appropriate person for the purpose of section 95.

(iv) The Respondent was convicted of an offence under section 95(1) in that she was at the relevant time, a person having control of or managing the property, which was required to be licensed under Part 3 of the Act but which was not so licensed.

(v) During the period between 25 March 2014 and 22 March 2015, the Respondent committed an offence under section 95(1) in that she was, during that period, a person having control of or managing the property, which was required to be licensed under Part 3 of the Act but which was not so licensed.

(vi) The Applicant has complied with the requirements of section 96(7) in that it served a Notice of Intended Proceedings on the Respondent complying with the provisions of section 96(7)(a).

(vii) There are no exceptional circumstances that would justify us reducing the sums sought (section 97(4)).

17. Consequently we are satisfied that we are entitled, pursuant to section 97, to make a rent repayment order. Further, pursuant to section 97(2), we are obliged to make such an order.

5 Robert Latham Tribunal Judge

11 March 2016

RIGHTS OF APPEAL

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

3. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking.

6 Appendix - The Relevant Legislation

1. Part 3 of the Housing Act makes provision for the selective licensing of residential accommodation and the enforcement provisions are included in section 95 to 98.

2. If residential accommodation covered by the scheme is not licensed, section 96(5) permits either the local housing authority or an occupier to apply to the tribunal for a rent repayment order:

(5) If–

(a) an application in respect of a house is made to the appropriate tribunal by the local housing authority or an occupier of the whole or part of the house, and

(b) the tribunal is satisfied as to the matters mentioned in subsection (6) or (8),

the tribunal may make an order (a “rent repayment order”) requiring the appropriate person to pay to the applicant such amount in respect of the relevant award or awards of universal credit or the housing benefit paid as mentioned in subsection (6)(b), or (as the case may be) the periodical payments paid as mentioned in subsection (8)(b), as is specified in the order (see section 97(2) to (8)).

3. In this case the application was made by the local housing authority and consequently section 96(6) and (7) apply. These subsections read as follows:

(6) If the application is made by the local housing authority, the tribunal must be satisfied as to the following matters–

(a) that, at any time within the period of 12 months ending with the date of the notice of intended proceedings required by subsection (7), the appropriate person has committed an offence under section 95(1) in relation to the house (whether or not he has been charged or convicted),

(b) that—

(i) one or more relevant awards of universal credit have been paid (to [NAME]); or

(ii) housing benefit has been paid (to [NAME]) in respect of periodical payments payable in connection with the occupation of the whole or any part or parts of the house, during any period during which it appears to the tribunal that such an offence was being committed,

(c) that the requirements of subsection (7) have been complied with in relation to the application.

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(6A) In subsection (6)(b)(i), “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, calculated in accordance with Schedule 4 to the Universal Credit Regulations 2013 (housing costs element for renters) (S.I. 2013/376) or any corresponding provision replacing that Schedule, in respect of periodical payments payable in connection with the occupation of the whole or any part or parts of the house.

(7) Those requirements are as follows–

(a) the authority must have served on the appropriate person a notice (a “notice of intended proceedings”)–

(i) informing him that the authority are proposing to make an application under subsection (5),

(ii) setting out the reasons why they propose to do so,

(iii) stating the amount that they will seek to recover under that subsection and how that amount is calculated, and

(iv) inviting him to make representations to them within a period specified in the notice of not less than 28 days;

(b) that period must have expired; and

(c) the authority must have considered any representations made to them within that period by the appropriate person.

4. Further provisions relating to rent repayment orders are contained in section 97. Section 97(2) provides that if a person has been convicted of an offence under 95(1) the tribunal must order the repayment of all the housing benefit paid during the commission of the offence. Thus Section 97 provides:

(2) Where, on an application by the local housing authority, the tribunal is satisfied–

(a) that a person has been convicted of an offence under section 95(1) in relation to the house, and

(b) that—

(i) one or more relevant awards of universal credit (as defined in section 96(6A)) were paid (whether or not to the appropriate person), or

(ii) housing benefit was paid (whether or not to the appropriate person) in respect of periodical payments

8 payable in connection with occupation of the whole or any part or parts of the house,

during any period during which it appears to the tribunal that such an offence was being committed in relation to the house,

the tribunal must make a rent repayment order requiring the appropriate person to pay to the authority the amount mentioned in subsection (2A).

This is subject to subsections (3), (4) and (8).

(2A) The amount referred to in subsection (2) is—

(a) an amount equal to—

(i) where one relevant award of universal credit was paid as mentioned in subsection (2)(b)(i), the amount included in the calculation of that award under section 11 of the Welfare Reform Act 2012, calculated in accordance with Schedule 4 to the Universal Credit Regulations 2013 (housing costs element for renters) (S.I. 2013/376) or any corresponding provision replacing that Schedule, or the amount of the award if less; or

(ii) if more than one such award was paid as mentioned in subsection (2)(b)(i), the sum of the amounts included in the calculation of those awards as referred to in sub- paragraph (i), or the sum of the amounts of those awards if less, or

(b) an amount equal to the total amount of housing benefit paid as mentioned in subsection (2)(b)(ii), (as the case may be).

(3) If the total of the amounts received by the appropriate person in respect of periodical payments payable as mentioned in paragraph (b) of subsection (2) (“the rent total”) is less than the amount mentioned in subsection (2A), the amount required to be paid by virtue of a rent repayment order made in accordance with that subsection is limited to the rent total.

(4) A rent repayment order made in accordance with subsection (2) may not require the payment of any amount which the tribunal is satisfied that, by reason of any exceptional circumstances, it would be unreasonable for that person to be required to pay.

....

(8) A rent repayment order may not require the payment of an amount which–

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(a) (where the application is made by a local housing authority) is in respect of any time falling outside the period of 12 months mentioned in section 96(6)(a); or

(b) (where the application is made by an occupier) is in respect of any time falling outside the period of 12 months ending with the date of the occupier's application under section 96(5);

and the period to be taken into account under subsection (6)(a) above is restricted accordingly.