[2024] UKUT 155 (LC)

Part 2 of the Housing Act 2004 provides that certain houses in multiple occupation ("HMOs") have to be licensed; regulations prescribe which HMOs have to be licensed, and a local housing authority may implement a scheme for additional licensing under section 56. Section 72 of the 2004 Act provides that it is an offence to manage or be in control of an HMO that is required to be licensed and is not licensed. That offence is one of those specified in section 40 of the Housing and Planning Act 2016, which means that the FTT may make a rent repayment order in favour of a tenant against a landlord if it is satisfied beyond reasonable doubt that the offence has been committed during the period of one year before the tenant's application.

The property is a five-bedroom house which has been let to individuals who share a kitchen. The registered proprietor is Ms Yi’s husband, who lives in China; Ms Yi has entered into tenancy agreements with the occupiers of the rooms in the house and the occupiers’ rent has been paid to her. The respondents lived in the property at a time when it should have had an HMO licence and was not licensed; although there were only three occupiers at the relevant time, a licence was required under a scheme for additional licensing operated by the local housing authority. The three occupiers – the respondents and one other, Mr Emmanuel Ezra – applied to the FTT in May 2022 for rent repayment orders on the basis that Ms Yi had committed the offence of managing or controlling the property when it should have been licensed and was not. The three applicants each paid rent in different amounts and each made an application in respect of a slightly different period, of 11 months up to 16 January 2022 in the case of Mr Hobbs and of 10.5 months up to 16 March 2022 in respect of Mr Aleike.

It was not in dispute before the FTT that the property should have been licensed at all times during the applicants’ occupation, and was not licensed until June 2022.

The FTT found that Ms Yi had committed the offence of managing an HMO that should have been licensed and was not throughout the periods in respect of which rent repayment orders were claimed. I have gone through the background to that finding swiftly because there is no appeal from it; the appeal relates only to the amount that the FTT ordered Ms Yi to pay.

In considering the amount to be paid the FTT referred first to section 43(2) of the Housing and Planning Act 2016 which states that, for this offence the amount ordered to be repaid must relate to the amount paid by the tenant in respect of a period not exceeding 12 months during which the landlord was committing the offence. Section 43(4) of the 2016 Act then goes on to say:

The FTT considered those provisions. It said:

The FTT said that Ms Yi had “discharged her obligations in a responsible way” and rejected the tenants’ evidence of disrepair and environmental health concerns.

The FTT correctly referred to the Tribunal’s decisions in Vadamalayan v Stewart [2020] UKUT 183 (LC), Williams v Parmar [2021] UKUT 244 (LC) and Acheampong v Roman [2022] UKUT 239 (LC) and followed the steps set out in the latter case in deciding how much to order Ms Yi to pay. The FTT said at its paragraph 30:

As to step (ii) the FTT subtracted for each tenant the sum of £98.56 per month and there is no challenge to that figure. The FTT therefore took for each tenant the total claimed, less what they had paid for utilities, and (subject to an extra step for Mr Hobbs, which I will come to shortly) divided the resulting figure by 2, on the basis that a reduction of 50% was an appropriate reflection of Ms Yi’s culpability. Again there is no challenge to that deduction.

It is convenient now to address the appeal from the orders made in favour of the two respondents in turn