Tenants Win Partial Rent Repayment Order Against Landlords for Unlicensed HMO Management

OUTCOME: Allowed in Part

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : LON/00AY/HMF/2024/0036 [NAME] : 26 [ADDRESS], [POSTCODE] Applicants : [redacted] (2) [NAME] (3) [NAME] [NAME] (4) [COUNSEL] (5) [COUNSEL] :

[COUNSEL] [NAME]

Respondent: [redacted]

(1) [NAME] (2) [COUNSEL] (3) [COMPANY] : Mr [COUNSEL] of [NAME] : [NAME] for a rent repayment order by the tenants: sections 40, 41, 43 and 44 of the Housing and Planning Act 2016 Tribunal members : Judge Tueje Mrs L Crane MCIEH CEnvH Venue : 10 [ADDRESS] [POSTCODE] Date of hearing : 13th January 2025 Date of decision : 3rd March 2025

DECISION

2 In this determination, statutory references relate to the Housing Act 2004 unless otherwise stated.

Decisions of the Tribunal

(1) The [NAME] for a rent repayment order against the Third Respondent is dismissed.

(2) The Tribunal find that the First and [NAME] and Respondents did commit an offence under section 72(1) without reasonable excuse.

(3) The Tribunal makes a rent repayment order against the [NAME], who are therefore jointly and severally liable to pay the global sum of £8,748.89, which is to be paid to the Applicants within 28 days of the date this Decision is sent to the parties.

(4) Unless the parties agree otherwise, the above sum is to be paid to Mr [APPELLANT] as the lead tenant, and it will be his responsibility to forward it to, or distribute it amongst, the other Applicants, as may be appropriate.

(5) The global sum represents a rent repayment order for the following periods:

• Mr [NAME]

14th February 2022 to 15th Jan 2023 • Ms [NAME]

14th February 2022 to 15th Jan 2023 • Ms [NAME] 14th February 2022 to 15th Jan 2023 • Ms [NAME]

14th February 2022 to 18th Sept 2022 • Ms [NAME]

19th September 2022 to 15th Jan 2023 (6) The Tribunal has issued separate directions in respect of the [NAME] for costs made under Rule 13(1)(b) and Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] Chamber) Rules 2013. (7) The reasons for the Tribunal’s decisions are given below. The [NAME]

1. This decision relates to an [NAME] dated 21st December 2023 made under section 41 of the Housing and Planning Act 2016 for a rent repayment order. The [NAME] form containing a statement of truth is signed by all 5 Applicants.

2. The Applicants are the former tenants of 26 [ADDRESS], [POSTCODE] (“the [NAME]”), which is a 4-bedroom split-level flat.

3. The [NAME] is made against the [NAME], Mr and Mrs [NAME], who were stated to be the Applicants’ immediate landlords in

3 the tenancy agreements. The [NAME] is also made against the Third Respondent, [RESPONDENT], stated to be the [NAME] agent in the tenancy agreement.

4. The Applicants are claiming a rent repayment order from 14th February 2022 to 15th January 2023, being a period of 336 days. The amount claimed is £26,511.78, being the total rent paid during the period of their claim.

5. By an order dated 10th April 2024, and subsequently amended on 22nd July 2024, the Tribunal gave directions. The directions orders made provision for the parties to each prepare separate bundles for the hearing containing their supporting documents, and an expanded statement of reasons for the [NAME]. It gave the parties the option to prepare a skeleton argument, and if they did so, to provide it 3 clear days before the final hearing.

6. The [NAME]’ statement of case, which bears their names, is dated 23rd July 2024. Paragraph 2 of their statement of case reads (US English used in the original):

At all material times, and as pleaded by the Applicants, the [NAME] required a HMO license, but was not so licensed. 7. Paragraph 26 of their statement of case continues:

In these circumstances the offence committed is the least serious offence for which a rent repayment order could be made; and such offence was committed as a result of maladministration of the online [NAME] system previously used by the [NAME].

8. The Tribunal listed the final hearing on 29th August 2024.

9. The hearing on 29th August 2024 was adjourned because Mr [COUNSEL], counsel for the respondent, was involved in a road traffic accident on the way to the hearing. The matter was re-listed to be heard on 13th January 2025.

The Background

10. It is common ground that the [NAME] are leaseholders of the [NAME], and London Borough of [NAME] is the freeholder. The First Respondent has been a director of a [NAME] for 30 years. We were told that he started the Third Respondent company, while the [NAME] Respondent dealt with the books and administration. The First Respondent has since sold the company to Mrs [RESPONDENT], but the [NAME] are still directors of the Third Respondent.

11. Mrs [RESPONDENT] gave evidence on behalf of the Third Respondent. In her witness statement she states the [NAME] has the appropriate health and fire safety equipment including smoke, heat and carbon monoxide alarms, the kitchen has a fire door, and a thumbturn lock to the front door, and that the [NAME] fulfils the requirements of an HMO.

4

12. In May 2021 the First Respondent was diagnosed with cancer, for which he underwent treatment. Then in November 2021, the [NAME] Respondent was diagnosed with cancer; she received radiotherapy in December 2021, before starting chemotherapy in January 2022.

13. The First Respondent became aware in 2021 that [NAME] was introducing an Additional Licensing scheme for HMOs, and tried to submit a licence [NAME] on 17th November 2021. Applications had to be made online and had to be accompanied by a fire risk assessment and an emergency lighting certificate, which [NAME], as the freeholder had not supplied to him.

14. Mrs [NAME] says that also on 17th November 2021 the missing documents were requested from [NAME], followed by periodic reminders (see paragraphs 16, 19 and 30 below).

15. [NAME]’s Additional Licencing scheme was introduced on 9th December 2021. It applies to houses in multiple occupation (HMO) within its borough occupied by three or more persons who form more than one household, where the occupiers share a kitchen, bathroom and WC.

16. By an e-mail sent to [NAME] on 8th February 2022, the First Respondent chased [NAME] for the fire risk assessment and emergency lighting certificate that had been requested on 17th November 2021. This was shortly before the [NAME] entered into the first tenancy agreement with the Applicants.

17. By an agreement dated 11th February 2022, Mr [NAME], Ms [NAME], Ms [NAME] and Ms [NAME] entered into a joint 12-month assured shorthold tenancy agreement commencing 14th February 2022; the agreement had a six month break clause. The rent was £2,400 per calendar month payable on the first day of each month. By clause 3.2 of the agreement, the Applicants were liable to pay the utilities in addition to the rent.

18. Clause 4.2 of the agreement states:

To use the [NAME] as a single private dwelling as the Tenant's only or principal home and not to use it or any part of it for any other purpose nor to allow anyone else to do so

19. Also, on 14th February 2022 Mrs [NAME] tried to submit a licence [NAME] using an expired fire risk assessment. But because [NAME] had still not provided the emergency lighting certificate, she was unable to complete the [NAME]. A few weeks after the tenancy began, on 8th March 2022, the First Respondent chased [NAME] again for the fire risk assessment and emergency lighting certificate. Mrs [NAME] also contacted [NAME]’s health and safety team in May 2022 and September 2022 requesting the documents, but [NAME] still didn’t provide them.

5 20. In the interim, by a further (replacement) tenancy agreement dated 23rd August 2022, Mr [NAME], Ms [NAME], Ms [NAME] and Ms [NAME] entered into a joint 12-month assured shorthold tenancy agreement commencing 19th September 2022. The replacement tenancy was on the same terms and at the same rent as the original tenancy.

21. The Applicants have provided an occupation timetable which they expressly state relates to their occupation. It covers the period from 14th February 2022 to 16th January 2023, and is as follows:

Mr [NAME]

14th February 2022 to 16th January 2023 Ms [NAME]

14th February 2022 to 16th January 2023 Ms [NAME] 14th February 2022 to 16th January 2023 Ms [NAME]

14th February 2022 to 18th September 2022 Ms [NAME]

19th September 2022 to 16th January 2023

22. In section 9 of the [NAME] form, the Applicants state:

The tenancy agreements show that the [NAME] was rented out to 4 tenants who share toilet, bathroom or kitchen facilities with each other.

23. Mr [NAME] provided a copy of his bank account transactions showing that in February 2022 he paid £3,932.56 to the Third Respondent, and then £2,400.00 per month to the Third Respondent from 1st March 2022 onwards.

24. The payments were as follows:

10/2/2022

£540.00 12/2/2022

£3,392.56 1/3/2022

£2,400 1/4/2022

£2,400 1/5/2022

£2,400 1/6/2022

£2,400 1/7/2022

£2,400 1/8/2022

£2,400 1/9/2022

£2,400 1/10/2022

£2,400 1/11/2022

£2,400 1/12/2022

£2,400 3/1/2023

£2,400

25. At page 46 of their bundle, the Applicants explain that the initial amounts paid in February 2022 included payment for a deposit.

26. As part of their written evidence, the Applicants rely on an e-mail from [NAME]’s HMO team sent to Mr [NAME] on 18th July 2023, which states the [NAME] was not licensed between 9th December 2021 to 15th January 2023.

6

27. As to conditions at the [NAME], the Applicants complain that there was no central heating from 2nd December 2022 to 18th January 2023, and during this period they were without a hot water supply on 3 occasions, each period lasting several days.

28. We note e-mail exchanges between Ms [RESPONDENT] and the Third Respondent confirm that due to the above defects, the Applicants were asked to purchase electric heaters, for which they would be reimbursed. In an attempt to restore the central heating, the Third Respondent arranged for contractors to visit on 2nd December 2022 (the day the fault was reported), with further visits on 8th, 15th and 19th December 2022, and on 14th and 16th January 2023. The Third Respondent also agreed to pay the Applicants electricity bills for December 2022 and January 2023.

29. The Applicants acknowledge the steps taken to try to address the defects, and payment of the electricity bills, but they also point out that their enjoyment of the [NAME] was seriously diminished during this 7-week period.

30. As to the HMO licence [NAME], Mrs [NAME] contacted [NAME] on 12th January 2023. However, this time she contacted its homeownership team, who advised her to e-mail its HMO licencing team for the fire risk assessment and emergency lighting certificate. Mrs [NAME] did so.

31. Mrs [NAME] submitted the HMO licensing [NAME] on 16th January 2023. She uploaded the fire risk assessment, which she also used in place of the emergency lighting certificate as it had still not been provided. On 18th April 2024 [NAME] issued a draft HMO licence, before granting the HMO licence on 15th May 2024, with no conditions attached. The Hearing 32. As stated, the adjourned final hearing was on 13th January 2025.

33. The parties did not request an inspection of the [NAME] by the Tribunal, and the Tribunal did not consider one was necessary or proportionate.

34. The Tribunal was provided with the following documents: 34.1 A 51-page bundle from the Applicants; 34.2 A 3-page bundle in reply from the Applicants. 34.3 A 123-page bundle from the Respondents; and 34.4 A 13-page skeleton argument from Mr [NAME].

35. The Tribunal was provided with a copy of Mr [NAME] skeleton argument at around 9.50am. We do not know at what time that morning the Applicants were provided with a copy.

7 36. The Applicants all attended the hearing in order to give evidence. Mr [NAME] initially argued the Applicants had failed to comply with the Tribunal’s directions by not providing any witness statements. However, neither the directions nor the amended directions orders mandate this. So when the Tribunal queried this, Mr [NAME] did not pursue the point.

37. Mr [NAME] declined to cross examine any of the Applicants. The [NAME] and Mrs [NAME] all gave oral evidence. Mrs [RESPONDENT] and the First Respondent both confirmed during cross examination that they were aware the [NAME] required an HMO licence but did not have one when they entered into the tenancy agreements with the Applicants. The Issues

38. In light of the above, the issues for the Tribunal to determine are as follows: 38.1 Whether the Respondents committed an offence under section 72(1) as a result of the following: (i) Whether any or all of the Respondents were the Applicants’ immediate landlord; (ii) being in control of or [NAME] the [NAME]; (iii) the [NAME] being an HMO; (iv) Whether a licence was required for the [NAME]; and (v) If so, whether there was a licence for the [NAME].

38.2 If the elements of the offence at paragraphs 38.1(i) to 38.1(v) above are met in respect of any of the Respondents during the period in which the offence was committed, did that Respondent(s) have a defence to the commission of the offence under section 72(4) and/or 72(5)?

38.3 If an offence has been committed, the whole of the rent paid during the period of the offence.

38.4 Whether the Respondents had been responsible for the cost of any utilities at the [NAME].

38.5 The severity of the offence.

38.6 Any relevant conduct of the Respondents, their financial circumstances, whether they have any previous convictions of a relevant offence, and the conduct of the Applicants to which the Tribunal should have regard in exercising its discretion as to the amount of the rent repayment order.

The Tribunal’s Decision and Reasons

39. The Tribunal reached its decision after considering the parties’ written evidence and the Respondents’ oral evidence, including documents

8 referred to in that evidence, and taking into account its assessment of the evidence and documentation provided by the parties.

40. As appropriate, and where relevant to the Tribunal’s decision the evidence is referred to in the reasons for the Tribunal’s decision.

41. This determination does not refer to every matter raised by the parties, or every document the Tribunal reviewed or took into account in reaching its decision. However, this doesn't imply that any points raised or documents not specifically mentioned were disregarded. If a point or document was referred to in the evidence or submissions that was relevant to a specific issue, it was considered by the Tribunal.

42. The relevant legal provisions are set out in the Appendix to this decision. The offence under section 72(1) Housing Act 2004

43. The Tribunal is satisfied that in respect of the [NAME], the Applicants have proved beyond reasonable doubt that all the elements of the offence under section 72(1) are proved, as set out at paragraphs 44 to 62 below.

44. We find the [NAME] were persons [NAME] the [NAME] as defined by section 263(3), which states [NAME] manages premises where they are an owner or lessee of the premises, and they receive the rack-rent either directly, or indirectly through an agent. The [NAME] are the leasehold owners of the [NAME]. Mr [NAME] has provided documentary evidence showing that he paid to the Third Respondent, which manages the [NAME] on behalf of the [NAME], the amount of rent on the dates set out in the tenancy agreement.

45. We are also satisfied beyond reasonable doubt that the [NAME] meets the criteria of [NAME]’s Additional Licensing Scheme. Firstly, because the [NAME] concede this in their statement of case. Secondly, they applied for an HMO licence, which was granted.

46. Despite the above, Mr [NAME] put forward a number of arguments as to why the [NAME] should be dismissed. Firstly he argued that the Applicants had failed to provide any evidence that they occupied the [NAME], he says their evidence states that they rented (as opposed to occupied) the [NAME], and there is only evidence that Mr [NAME] paid rent.

47. In our judgment, the Applicants written evidence sets out the dates they occupied the [NAME] (see paragraph 21 above), and the facilities they shared (see paragraph 22 above). Clause 4.2 of the tenancy also states the [NAME] must be occupied as their only or principal home, which we consider akin to the requirement at section 254(2)(c) that occupation must

9 be as [NAME]’s only or main residence. Furthermore, the [NAME] accept a HMO licence was required during the relevant period, that a licence was not obtained, and that an offence has been committed. Accordingly, we are satisfied the [NAME] committed an offence under section 72(1).

48. At paragraph 12 of his skeleton argument, Mr [NAME] states:

The Respondents have been deprived of testing evidence which could only fall within the knowledge of each of the respective applicants, or whose evidence is probative generally where the First Applicant is not corroborated.

49. However, it was Mr [APPELLANT] who did not avail himself of the opportunity to cross examine the Applicants who all attended the hearing. The Respondents have adduced no written or oral evidence to challenge the Applicants contention that they occupied the [NAME] for the periods stated. To the contrary, the [NAME]’ statement of case accepts the [NAME] required a licence but did not have one, and admits that an offence was committed. We are therefore satisfied beyond a reasonable doubt that the elements of the offence set out at paragraph 38.1(i) to 38.1(v) above are proved.

50. We find Mr [COUNSEL] argument surprising: as counsel, he cannot give evidence, his submissions were made without any supporting evidence, and are at odds with the respondents’ position as set out in their statement of case. We therefore reject this argument.

51. Mr [NAME] also argued the [NAME] had a reasonable excuse defence. He argued that on 17th November 2021, being more than 12 weeks prior to the Applicants’ first tenancy, the First Respondent requested the emergency lighting certificate from [NAME] in order to submit the HMO licence [NAME]. He points out the First Respondent chased [NAME] for a response on 8th February 2022, before the tenancy start date, and again on 8th March 2022. Then Mrs [NAME] telephoned [NAME] in May and September 2022, before e-mailing and contacting [NAME] again in January 2023.

52. Mr [NAME] cites Kumar v Kolev [2024] 4 WLR 93, as authority to argue we should have regard to all the circumstances when considering whether the Respondents have a reasonable excuse. He also relies on D’[NAME] v Andrea [2021] UKUT 0144(LC) where the Upper Tribunal held a respondent who had been informed by their local authority that they did not need an HMO licence was found to have a reasonable excuse. Mr [NAME] argues the latter authority applies in this case. That is because [NAME], as the freeholder, had control of the emergency lighting certificate which the Respondents needed to submit the HMO licence [NAME]. However, it was [NAME]’s excessive delay in providing this documentation that prevented the Respondents submitting the HMO licence [NAME].

10

53. We have considered whether, on the balance of probabilities, [NAME]’s failure to provide the documentation amounted to a reasonable excuse. In our judgment, it does not. We note the First Respondent first tried to submit an online [NAME] on 17th November 2021, before the Additional Licensing scheme came into force, and some months before the Applicants’ original tenancy began. We also take into account the First Respondent requested a copy of the documentation from [NAME] on 17th November 2021 and 8th February 2022.

54. However, we also note that the Respondents were aware that the Additional Licensing scheme came into force on 9th December 2021, and yet no steps were taken to chase [NAME] in the 12-week period between 17th November 2021 to 8th February 2022, but yet the [NAME] granted the Applicants a tenancy agreement knowing a licence was required but had not been obtained. We have also taken into account that the Third Respondent, the [NAME] agent for the [NAME] since February 2022, took no steps to pursue [NAME] until May 2022, and then waited 5 months before contacting [NAME] again in September 2022. On each occasion, the Respondents contacted [NAME]’s health and safety team, but not its HMO licensing team. As a professional landlord who has instructed a [NAME] agent, having regard to all the circumstances, we do not consider that this sporadic contact with [NAME] amounts to a reasonable excuse when the Respondents were aware that the [NAME] required a licence but did not have one.

55. Mr [NAME] also seeks to argue that the [NAME] is not an HMO as a matter of law by virtue of the exemptions at schedule 14. Insofar as is relevant, schedule 14 states:

1. Introduction: buildings (or parts) which are not HMOs for the purposes of this Act (excluding Part 1)

(1) The following paragraphs list buildings which are not houses in multiple occupation for any purposes of this act other than those of Part 1.

(2) In this Schedule “building” includes a part of a building.

2. Buildings controlled or managed by public sector bodies etc.

(1) A building where the person [NAME] or having control of it is-

(a) local housing authority

56. Mr [NAME] argument continues that where the rent is paid directly or indirectly to more than one person, the definition of “person having control” at section 263 includes both persons. Developing his argument further, Mr [NAME] states (see paragraph 18 of his skeleton argument):

11

In London Corporation v Cusack-Smith [1955] AC 337, it was held unanimously by the House of Lords that where the same house was let successively on a chain of leases and sub leases over a period of years, more than one person could be said to be in receipt of the rack rent of the house because the question whether a rent was or was not a rack rent was to be determined at the time of the letting.

57. Therefore, Mr [NAME] argues that because the [NAME] is let successively by [NAME] to the [NAME], who in turn, had let it to the Applicants, [NAME] applied. And in accordance with [NAME], [NAME] was also [NAME] in control of the [NAME] because it received a rack rent when the [NAME]’ predecessor in title purchased a leasehold interest in the [NAME]. Further, if [NAME] was [NAME] in control of the [NAME], by virtue of paragraph 2(1)(a) of schedule 14, the [NAME] is exempt from HMO licensing.

58. The Tribunal asked Mr [NAME] whether the logical conclusion to his argument would mean that in effect, properties where the freeholder was a local housing authority, and the [NAME] had sublet the [NAME], the [NAME] would be exempt from the HMO licensing requirements by virtue of schedule 14. Somewhat reluctantly, Mr [NAME] agreed.

59. Having regard to [NAME], we reject Mr [NAME] argument. The case was concerned with the definition of the “owner” for the purposes of section 19 of the Town and Planning Act 1947. It was not concerned with the definition of the “person having control” which is the person the exemption that paragraph 2(1)(a) of schedule 14 is concerned with. As the authority Mr [NAME] seeks to rely on was decided in the context of a different statutory provision, and in respect of a different term, owner as opposed to person in control, we do not find it is of any particular assistance in this case.

60. As an aside, and in light of the nature of the legal issues raised in his skeleton argument, we do not consider it appropriate that, in breach of the Tribunal’s directions order, Mr [NAME] skeleton argument was provided so late. Particularly as the skeleton argument was provided on the day of the adjourned hearing and had not been provided prior to the original final hearing date.

61. In the circumstances, having found that an offence has been committed under section 72(1), having found that there is no reasonable excuse, we also find it is appropriate to exercise our discretion by [NAME] a rent repayment order against the [NAME], there being no exceptional circumstances that would justify refusing to make the order.

62. It is common ground between the parties that the [NAME] were the Applicants’ immediate landlord, and the Third Respondent was the [NAME] agent. This is confirmed in the written

12 tenancy agreements. In Rakusen v [NAME] and others [2023] UKSC 9 the Supreme Court held that a rent repayment order may only be made against the immediate landlord. Accordingly, we dismiss the [NAME] in respect of the Third Respondent. Amount of the Rent Repayment Order

Relevant factors

63. In its decision in [NAME] v Roman and others [2022] UKUT 239 (LC), the Upper Tribunal recommended a four-stage approach to determine the amount of the rent repayment order, that approach is summarised as follows:

63.1 Ascertain the whole of the rent for the relevant period;

63.2 Subtract any element of that sum that represents payment by the landlord for utilities that only benefited the tenant;

63.3 Consider how serious this offence was, both compared to other types of offence in respect of which a rent repayment order may be made and compared to other examples of the same type of offence; and

63.4 Consider whether any deduction from, or addition to, that figure should be made pursuant to section 44(4) of the 2016 Act in the light of the parties’ conduct, the landlord’s financial circumstances and whether the landlord has previously been convicted of an offence to which Chapter 4 of the 2016 Act applies.

64. We have adopted the approach recommended in [NAME] v Roman and others

The amount of the award 65. The Applicants are seeking repayment of the total amount of the rent they paid during the period in which the offence was committed, namely the period from 14th February 2022 to 15th January 2023.

66. Mr [NAME] argued that only Mr [NAME] had provided proof of payment of the rent. Therefore he relied on Dowd v Martins [2023] HLR 7 to argue that as Mr [NAME] was one of four joint tenants, the rent repayment order should only reflect a proportion of the total sum paid. He claimed there was no indication that any of the other Applicants authorised Mr [NAME] to act on their behalf. Mr [NAME] skeleton argument suggested that point would be pursued if only Mr [NAME] attended the final hearing. In the event, all 5 Applicants attended the hearing, but Mr [NAME] reiterated the point.

13

67. We consider this case is different to Dowd. In that case, one of two joint tenants withdrew their [NAME] for a rent repayment order, however in this case, it is pursued by all Applicants who occupied the [NAME] as joint tenants at the relevant time. We also note that, aside from all Applicants attending the hearing, the [NAME] form, which named Mr [APPELLANT] as the lead tenant, was signed by each Applicant. We take this to be their express authority for Mr [NAME] to represent them.

68. In fixing the appropriate sum the Tribunal had regard to [NAME] v Roman and others and the decision in Hallett v Parker [2022] UKUT 165 (LC). We have also taken into account that proper enforcement of licensing requirements against all landlords, good and bad, is necessary to ensure the general effectiveness of the licensing system and to deter evasion.

69. As stated, we have found the period of the offence was 14th February 2022 to 15th January 2023, which is 336 days. The Applicants state this equates to a rent repayment order of £26,511.78, calculated as follows:

£2,400 per month x 12 months/ 365 days = £78.904 £78.904 x 336 days = £26,511.78

70. Mr [NAME] argues that Mr [NAME] bank transactions show that a total of 11 payments of £2,400 were paid to the Third Respondent during the period of the offence, which amounts to £26,400. However, this calculation disregards the February 2022 payments, which were paid before 14th February 2022, i.e. before the period of the offence. While those payments were made before 14th February 2022, the February 2022 payments include rent in respect of the period from 14th February 2022 to 28th February 2022. We do not consider the fact that the payment itself was received beforehand means it should be excluded from the calculation. This is supported by the wording of section 44(2) of the Housing and Planning Act 2016, which states in respect of an offence of control or management of an unlicensed HMO:

… the amount must relate to rent paid by the tenant in respect of … a period, not exceeding 12 months, during which the landlord was committing an offence.

71. Therefore, because the February payments were made in respect of a period during which the offence was being committed, it follows the payments made by Mr [NAME] in February 2022 can be taken into account.

72. On that basis, the whole of the rent for the period the offence was being committed is £26,511.78.

73. As stated, the rent paid was exclusive of bills, so ordinarily no element of the rent paid would be deducted on the basis that it represents payment

14 for utilities. However, Mr [NAME] claims that the £343.60 paid by the Respondents to cover electricity costs for December 2022 and January 2023 should be deducted. We disagree for a number of reasons. In her e- mail sent on 27th January 2023, Mrs [NAME] suggests the Respondents will pay the electricity to make amends for the interruption to the heating and hot water supply. In his witness statement, the First Respondent states this was to reimburse the Applicants for the increased electricity costs resulting from using electric heaters (see paragraph 18). In other words, it was paid as compensation, and the amount of that compensation was agreed at the cost of electricity for these two months. We consider that is different to subtracting from the rent, a sum that reflects the cost of the electricity that only the Applicants have had the benefit of. There was no evidence as to what amount of the £343.60 represents payment for the increased electricity costs and inconvenience, and what amount would be for their standard electricity costs. Finally, apart from the assertion in Mr [NAME] skeleton argument, there is no evidence of the amount that the Respondents paid for the electricity. We note Mr [NAME] is in danger of straying into giving evidence.

74. Regarding the seriousness of the offence in this [NAME], namely the control or management of an unlicensed HMO, we find this is at the lower end when compared to other offences for which a rent repayment order may be made. While we consider this offence was committed in the knowledge that the [NAME] was unlicensed, we take into account that the Respondents had endeavoured to apply for the HMO licence before the Applicants’ original tenancy start date. And while we consider those efforts by the Respondents could have been more concerted, we also take into account that [NAME]’s significant delay in providing the necessary documentation was a relevant factor.

75. As to the conduct of the parties, we do not consider the heating and hot water problems between December 2022 and January 2023 justify an increase in the award. It would have undoubtedly been inconvenient for the Applicants, particularly in the middle of winter. However, we also take into account that the Third Respondent was dealing with this, and arranged for contractors to visit on a number of occasions to try to resolve the problem, including arranging a contractor’s visit on the day the defect was reported. It’s unfortunate the defect was only remedied after several weeks, but that does not seem to be due to any fault on the Respondents’ part, who also did what they could to compensate the Applicants for the inconvenience.

76. The Applicants make no other complaint about the conditions at the [NAME], and entering into the replacement tenancy agreement suggest they found the condition of the [NAME] was adequate. We also note an HMO licence was subsequently granted, which supports Mrs [NAME] evidence that the [NAME] had appropriate health and fire safety equipment and features.

15 77. We were not provided with any information regarding the Respondents’ finances: Mr [NAME] confirmed the Respondents did not wish to adduce any evidence of their finances as they were not seeking to reduce the award on that basis.

78. We were also not provided with any evidence that the Respondents have previous convictions for a similar offence, and we accept the First Respondent’s evidence that in respect of other properties they let out, they have obtained relevant licences, where required.

79. We consider that the [NAME] have put forward mitigation that justifies a reduction in the amount of the award. Firstly, while we do not consider it provides a reasonable excuse, we consider [NAME]’s delay in providing the emergency lighting certificate was a relevant factor contributing to this offence. Although we balance this against the sporadic manner in which the Respondents dealt with this, and the other factors set out at paragraph 54 above. Secondly, we consider that [NAME]’ health problems were relevant, in terms of the severity of their conditions, the treatment they underwent, and the timing coinciding with the period in which the offence was committed. Finally, we take into account that the [NAME] had instructed [NAME] to manage the [NAME], which to an extent reduces the [NAME]’ culpability, because there were arrangements in place to deal with matters while they were indisposed.

80. There was no evidence or argument to indicate any misconduct on the part of the Applicants. Therefore, no reduction of the amount awarded is justified on that basis; the only reduction relates to the [NAME]’ above mitigation.

81. Having regard to the total rent for the relevant period, the severity of the offence and the deductions that we considers should be made in light of factors to which we must have regard under section 44(4) of the 2016 Act, we make a rent repayment order against the [NAME] in the total sum of £8,748.89, which represents 33% of the rent paid during the relevant period.

82. The Tribunal would remind the parties that it does not have the power to order the payment of the rent repayment order. It can only determine the amount of the rent repayment order.

Name: Judge Tueje Date: 3rd March 2025

16

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] 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 regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office 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 [NAME] 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).

17

Appendix of Relevant Legislation Housing Act 2004 72 Offences in relation to licensing of HMOs (1) [NAME] commits an offence if he is [NAME] having control of or [NAME] 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 [NAME] 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 licence. (3) [NAME] commits an offence if– (a) he is a licence holder or [NAME] on whom restrictions or obligations under a licence are imposed in accordance with section 67(5), and (b) he fails to comply with any condition of the licence. (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 licence 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–

18 (a) for having control of or [NAME] 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) [NAME] 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 [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 licence, 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 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. (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).

Housing and Planning Act 2016

40 Introduction and key definitions

19 (1)This Chapter confers power on the First-tier Tribunal to make a rent repayment order where a landlord and 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 to 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 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).

41 [NAME] 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 [NAME] who has committed an offence to which this Chapter applies.

20

(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 [NAME] is made.

43 [NAME] of a 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 had been convicted).

(2) A rent repayment order under this section may be made only on an [NAME] 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 [NAME] is made by a tenant);

44 Amount of order: tenants

(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

21 (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.