[2023] UKUT 283 (LC)

The FTT made few express findings of fact, but the following matters are established by the documents which were provided to it and are not controversial.

As Mrs Irvine explained to the FTT, she had not been involved in the management of the house at 20 Hailsham Road and had left everything to her husband, Mr Clive Irvine. The FTT found that he was Mrs Irvine’s agent, and there is no challenge to that finding. It was in that capacity, therefore, that Mr Irvine entered into an agreement with Uptown on 22 February 2016.

The agreement was a detailed printed document headed “Company Let Agreement” (“the Agreement”) which began, rather eccentrically, with the following:

“This document is intended to create a Company Let Agreement in accordance with the forfeiture provisions contained in the Law of Property Act 1925. It gives the Tenant (as defined) a right to occupy the Property (as defined) until the Expiry (as defined)”

The Agreement then identified 20 Hailsham Road as its subject, Uptown as “the Tenant”, Mr Irvine as “the Landlord” and “the Expiry” as 28 February 2018. The rent payable was £2,500 a month.

The Agreement granted the Tenant express permission to “sublet” the property (clause 2.3). It also stated that the Tenant was not to allow the number of occupiers to be such as would require an HMO licence (clause 2.4). In practice, that meant that no more than four people could be allowed to occupy the five bedroom house as their only or main residence (section 254(2), 2004 Act). The Agreement also included a forfeiture clause providing that if the rent remained unpaid for ten days “the Landlord may re-enter the Property and this Agreement shall thereupon determine absolutely” (clause 8.3).

Uptown then entered into arrangements with individual occupiers which were described on their face as “house share licence agreements”. The earliest of these was granted to Mr Johnson, the sixth respondent, on 12 March 2016. It allowed him to occupy one room in the house and share the facilities with others.

When the original term of the Agreement expired in February 2018 the arrangement was allowed to continue. Uptown went on paying rent by monthly instalments for the whole house, and it continued to allow the respondents and their predecessors to occupy individual rooms and share the rest of the building.

On 7 February 2019 Uptown went into liquidation. The liquidators are said to have disclaimed the company’s interest in the property on the same day. They (or Uptown immediately before their appointment), provided Mr Irvine with details of the tenants living in each of the properties Uptown had managed on the couple’s behalf. He made contact with the respondents and provided them with his bank account details into which he directed them to pay the rent they had previously paid to Uptown. Thereafter from the end of February 2019 rent was paid by the respondents directly to Mr Irvine.

In March 2019 the fourth respondent, Mr Weston, moved into a room in the house which had been vacated by the seventh respondent, Ms Zuccala. In April the fifth respondent, Ms McGregor replaced Mr Johnson when he moved out. Mr Weston and Ms McGregor had been living in another house owned by Mrs Irvine and managed by her husband and their relocation had been at Mr Irvine’s suggestion.

On 13 June 2019 the first respondent, Dr Metcalfe, gave notice to Mr Irvine of his intention to leave the property. He returned his keys and gave up the occupation of his room on 18 August 2019. From then on the house was no longer occupied by at least five people and so ceased to be an HMO.

Following helpful concessions made by Mr Yianni at the start of the hearing it is now agreed that the house had been an HMO from at least February 2018 until 18 August 2019. During that period it had not been licensed when it was required to be.