Tenant Secures Rent Repayment Order for Unlicensed HMO

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : MR LON/00AL/HMF/2018/0054 Property : 181 [ADDRESS] [POSTCODE] Applicant : [redacted] : [NAME] of Flat Justice Respondent : [redacted] : Mr [COUNSEL] of Counsel Interested person : - Type of [NAME] : [NAME] by Tenant for a rent repayment order under the [NAME] and Planning Act 2016 Tribunal members : Judge Professor Robert M Abbey Hugh Geddes ([NAME] Member) Date and Venue of the hearing : 30 May 2019 at 10 [ADDRESS] [POSTCODE] Date of decision : 3 June 2019

DECISION

Decision of the tribunal (1) The tribunal finds that a rent repayment order be made in the sum of £2573, the tribunal being satisfied beyond reasonable doubt that the landlord has committed an offence namely pursuant to s.72(1) of the

2 [NAME] 2004, control or management of an unlicensed House in Multiple Occupation, (HMO). (2) The respondent is Ordered to repay the applicant’s [NAME] and hearing fees in the sum of £300. Reasons for the tribunal’s decision Introduction 1. The applicant on 10 December 2018 made an [NAME] for a rent repayment order pursuant to the terms of s.41 of the [NAME] and Planning Act 2016 in respect of a property known as 181 [ADDRESS] [POSTCODE].

2. Both parties submitted trial bundles. The tribunal did not inspect the property as it considered the documentation and information before it in the trial bundles enabled the tribunal to proceed with this determination.

3. The hearing of the [NAME] took place on Thursday 30th May 2019. Mr [NAME] was represented by [NAME] from Flat Justice and Mr [NAME] appeared for the respondent. The law 4. Section 41 of the [NAME] and Planning Act 2016 allows tenants to apply to the tribunal for a rent repayment order. The Tribunal must be satisfied beyond reasonable doubt that the landlord has committed one or more offences listed in the Act. The fifth offence in the list is under section 72 (1) of the [NAME] 2004 where the landlord has been found to be in control or have management of an unlicensed HMO. Background 5. This property is located within a licensing area for HMOs. The licensing area is in fact the whole of the London Borough of Greenwich. Being occupied by three or more persons at various times during the tenancy of the applicant the property was effectively a property in multiple occupation for the purposes of the licensing scheme. The Offence 6. There being three or more people in the property at various times during the tenancy of the applicant, and the property being within the London Borough of Greenwich the Tribunal concluded that this was an unlicensed HMO.

Accordingly, the tribunal had no alternative other

3 than to find that the respondent was guilty of the criminal offence contrary to s.72(1) of the [NAME] 2004.

7. The applicant produced a spreadsheet of occupancy of the property that clearly showed for the periods from 27 May 2018 until 21 June 2018 and again from 28 July 2018 until 10 November 2018 the property was occupied by three or four tenants and thus constituted a house in multiple occupation. The respondent, who did not dispute the facts, did not produce a [NAME] for these periods and in fact he confirmed that no [NAME] [NAME] had been made. However, he did say that he had not meant to create this situation but had slipped into this position accidentally by allowing tenants to stay on after the time when they should have vacated. He did this he said to help the tenants. The tribunal’s determination 8. Consequently, the Tribunal concluded that a rent repayment order be made in the sum of £2572, the tribunal being satisfied beyond reasonable doubt that the landlord has committed an offence namely pursuant to s.72(1) of the [NAME] 2004, control or management of an unlicensed HMO.

9. The amount of the rent repayment order took into account the amount of rent paid by the applicant in the sum of £3222 during the period from 17 May 2018 to 10 November 2018. This amount was agreed by the respondent as representing the amount of rent received by him from the applicant for the period mentioned above.

10. Furthermore, the tribunal was mindful of the guidance to be found in the case of [NAME] v [NAME] and others [2012] UKUT 301 (LC) as to what the tribunal should consider a reasonable order given the circumstances of the claim. Amongst other factors the tribunal should be mindful of the length of time that an offence was being committed and the culpability of the landlord is relevant; a [NAME] is expected to know better. (The respondent is the owner of five houses of which two are certainly let to tenants). Indeed, there is no presumption of a starting point of a 100% refund being made. (In that case an award at 100% was considered reasonable as a starting off point but was then subject to alteration/deduction to take account of the circumstances and conduct of the parties). In [NAME] v [NAME] and Others [2014] UKUT 300 (LC) it was confirmed that the tribunal must take an overall view of the circumstances in determining what amount should be reasonable. Therefore, the Tribunal amongst other matters, took into account the nature of the property and the conduct of both of the parties when considering what is reasonable.

11. Taking into account all this guidance and the circumstances of the claim the tribunal considered that a deduction was appropriate and proportionate for outgoings incurred by the respondent. The Tribunal

4 considered the list of outgoings provided by the respondent and took a proportionate part of it as a deduction for the above period bearing in mind that there were in fact four bedrooms potentially available at the property. The Tribunal discounted the mortgage instalments and did so because this was a re-mortgage. (The respondent was registered as the proprietor of the property in 2001 but the existing first legal charge was only registered in May 2017). In the [NAME] case mortgage costs were not deducted where there was a recent re-mortgage. Therefore, the tribunal was able to conclude that an appropriate deduction was £650 and deducting this from the rent there is left the sum of £2572 which is the amount of the rent repayment order.

Accordingly, it is this amount that the tribunal considers appropriate proportionate and reasonable and is to be the amount of the rent repayment order.

12. In the light of the above determination the tribunal also decided that the respondent should refund the [NAME] and hearing fees paid by the applicant amounting in total to £300, being £100 for the [NAME] and £200 for the hearing. Name: Judge Professor Robert M Abbey Date: 3 June 2019

5 Annex

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 [NAME] for permission must be made to the First-tier Tribunal at the [NAME] which has been dealing with the case. The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

6 Appendix of relevant legislation [NAME] 2004, Section72 Offences in relation to licensing of HMOs

(1)[NAME] commits an offence if he is [NAME] 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)[NAME] commits an offence if—

(a)he is [NAME] 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 other person’s occupation results in the house being occupied by more households or persons than is authorised by the [NAME].

(3)[NAME] commits an offence if—

(a)he is a [NAME] or [NAME] on whom restrictions or obligations under a [NAME] are imposed in accordance with section 67(5), and

(b)he fails to comply with any condition of the [NAME].

(4)In proceedings against [NAME] 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 [NAME] for a [NAME] had been duly made in respect of the house under section 63,

and that notification or [NAME] was still effective (see subsection (8)).

(5)In proceedings against [NAME] 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)[NAME] who commits an offence under subsection (1) or (2) is liable on summary conviction to a fine.

7

(7)[NAME] who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(7B)If a local [NAME] authority has imposed a financial penalty on [NAME] 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.

(8)For the purposes of subsection (4) a notification or [NAME] 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 [NAME], in pursuance of the notification or [NAME], or

(b)if they have decided not to do so, one of the conditions set out in subsection (9) is met.

(9)The conditions are—

(a)that the period for appealing against the decision of the authority not to serve or grant such a notice or [NAME] (or against any relevant decision of 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.

(10)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).

s41 [NAME] and Planning Act 2016

[NAME] for rent repayment order

(1)[NAME] or a local [NAME] authority may apply to the First-tier Tribunal for a rent repayment order against [NAME] who has committed an offence to which this Chapter applies.

(2)[NAME] may apply for a rent repayment order only if —

(a)the offence relates to [NAME] 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 [NAME] is made.

(3)A local [NAME] authority may apply for a rent repayment order only if—

8 (a)the offence relates to [NAME] 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 [NAME] authority must have regard to any guidance given by the Secretary of State.