[2024] UKUT 324 (LC)

These two appeals were listed together because they both raise the same point: how long does a tenant have to make an application for a rent repayment order against a landlord who has been managing a house in multiple occupation (“an HMO”) without a licence after he has acquired a defence to the offence created by section 72(1) of the Housing Act 2004? In both appeals the Tribunal has to decide at what point in time the defence takes effect. In one appeal I also have to decide the meaning of the words:

“… the period of 12 months ending with the day on which the application is made.”

In both cases the tenants made an application to the First-tier Tribunal, which decided that it had no jurisdiction to make a rent repayment order because the application was made too late. The tenants now appeal with permission from the FTT.

In LC-2024-191, which I will call the Jerome House appeal, Kimberley Moh and her fellow tenants were represented by Mr Justin Bates KC and Mr Peter Sibley (instructed by JMW solicitors, all generously acting pro bono), and the landlord Rimal Properties Limited by Mr Karol Hart, Solicitor Advocate of Freemans Solicitors. In LC-2024-521, the Reighton Road appeal, Dr James Kiely represented himself and his fellow tenants, and the landlord Bostall Estates Limited was represented by its legal adviser Ms Mandeep Heer. I am most grateful to them all.

Part 2 of the Housing Act 2004 provides for a licensing regime for HMOs. Section 72(1) creates the offence of managing or being in control of an HMO that requires a licence and is not licensed, but provides for a number of defences to that offence:

“(1)

A person commits an offence if he is a person 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.

…

(4)

In proceedings against a person 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 application for a licence had been duly made in respect of the house under section 63,

 and that notification or application was still effective (see subsection (8)).

(5)

In proceedings against a person for an offence under subsection (1) … 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.

…

(8)

For the purposes of subsection (4) a notification or application 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 application, 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 FTT]) 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.”

Two of the defences created by section 72 are relevant to these appeals. In the Reighton Road appeal the respondent had the defence of reasonable excuse under section 72(5); in the Jerome House appeal the relevant defence was that of having applied for an HMO licence, under the section 72(4)(b). Section 72(4)(a) is not part of the factual matrix of either appeal but reference will be made to it in due course; the defence arises when the person managing or in control of the HMO has notified the local housing authority, pursuant to section 62(1), that he or she intends to take steps to secure that the house is no longer required to be licensed (for example, requiring the tenants to leave). On receipt of that notification the authority may serve on that person a “temporary exemption notice” under section 62(2), with the effect that the house is not required to be licensed for three months. Before that notice is given, the house is still required to be licensed, but the person managing or in control of it has a defence to the section 72(1) offence by virtue of having given the notification under section 62(1).

The offence under section 72(1) is one of those listed in section 40 of the Housing and Planning Act 2016, in respect of which the FTT may make a rent repayment order. Section 41(2)(b) of the 2016 Act says this:

“(2)

A tenant may apply for a rent repayment order only if:

…(b) the offence was committed in the period of 12 months ending with the day on which the application is made.”