[2024] UKUT 313 (LC)

The FTT looked at the “standard test” in section 254 of the 2004 Act, set out above at paragraph 2, and found that the property satisfied that test and therefore was an HMO. It recorded that there was some dispute about this, as follows:

“11.

Mr Manna [Mrs Ojukwu’s solicitor] submitted in his skeleton argument that, to constitute a HMO, there must be at least 3 separate households. The parties were ready to dispute the date when one of the tenants, Ms Sara Olumide, left the property (the aforementioned screenshot of text messages was relevant to this issue) - the Respondent said 21st June 2021 and the Applicant said August 2022. If the Respondent had the right date, it would mean that there had been only 2 households in the property for the majority of the period the Applicant has claimed for the calculation of the RRO, namely 10th April 2021 to 9th April 2022.

12.

However, the above definition of an HMO only requires 2 separate households. On the Respondent's own case, there were at least two separate households in the property from before the Additional Licensing scheme came in until August 2022 so that the property satisfied the definition of an HMO for the whole of that period. This would not be a sufficient number of households to bring the property within the mandatory statutory scheme but it is sufficient for Newham's Additional Licensing scheme. Further, therefore, the property should have been licensed under the Additional Licensing scheme throughout that period.”

That is not quite right: as we saw (paragraph 6 above), mandatory licensing under the regulations takes effect when the HMO is occupied by five or more persons in two or more households; the difference between mandatory and additional licensing is in the number of occupiers, not the number of households. If Ms Olumide left, with her son, in the summer of 2021 then until her departure the property came within the mandatory licensing requirement (five occupiers), and after she left it required a licence under the additional licensing scheme (three occupiers); if she did not leave until the summer of 2022 then the property fell within the mandatory licensing requirement throughout the period. The FTT was therefore correct to find that the property required an HMO licence throughout the period, although its misunderstanding about the basis of that requirement meant that it failed to make a finding of fact about when Ms Olumide left (because the FTT thought it did not matter); and that is unfortunate for reasons to be seen.

Be that as it may, the FTT found, on the basis of the criminal standard of proof, that the appellant had been managing or in control of the property throughout the period and did not have a defence of reasonable excuse; it noted that she had not sought to claim a reasonable excuse but considered whether her ignorance of the licensing requirements might constitute that defence and decided that it could not, since she had not taken steps to inform herself about the law. It therefore found that she had committed the offence under section 72(1) of the 2004 Act and determined that a rent repayment order should be made.

The FTT then discussed the Tribunal’s decision in Acheampong v Roman [2022] UKUT 239 (LC) and declined to follow it insofar as it indicated that the FTT should deduct from the rent claimed any sums paid for utilities. It determined that the appellant “displayed a profound ignorance of what it meant to be a landlord”, but acknowledged that she did not evade her licensing responsibilities in order to maximise her profit but just because she did not know what to do, which it said was “mitigation to a degree”. It ordered her to repay 75% of the full amount claimed by the respondent., namely £6,480.