[2024] UKUT 255 (LC)

As I have already decided that Mr Kumar was not a person against whom a rent repayment order could be made, and that the appeal must therefore be allowed, the question whether Mr Kumar had a reasonable excuse for being in control of an unlicensed HMO does not arise. However, the FTT decided that he had committed a criminal offence and if that was a conclusion it ought not to have arrived at, he is entitled to have the public record corrected.

I have already explained that the FTT asked Mr Kumar whether he wished to rely on the defence of reasonable excuse provided by section 72(5), 2004 Act but that, after recording that he had “eschewed any claim that he was ignorant of his obligations as a landlord for licensing or housing standards”, it made no further reference to the availability of the defence. When it considered the quantum of the award it should make, and the question of mitigation, it returned to the fact that Mr Kumar had let the whole of the House and had relied on others. The FTT said this:

“The Tribunal does understand why [Mr Kumar] reposed trust in LML because they had been referred by Chestertons and could be expected to display an appropriate level of professionalism. However, that is not sufficient reason to fail to provide any supervision at all. It would still be prudent to exercise the power that all landlords have and insist that the tenancy with LML have provisions requiring compliance with licensing and other standards and for checking that this is being done. [Mr Kumar] pointed out that there was a clause in the tenancy with LML limiting the occupancy of any sub-tenants to 4 people but the fact is that he took no steps to check that this was being complied with, let alone to enforce it.”

In my judgment the FTT’s assessment of the facts was incomplete and inadequate. It should, in terms, have addressed the question whether Mr Kumar had a reasonable excuse. The answer to that question had nothing to do with whether he was familiar with the obligations of a landlord in relation to licensing an HMO. The facts which Mr Kumar was entitled to rely on were, first, that he had let the whole property to an apparently reputable tenant on the recommendation of an agent whose judgment he trusted; secondly, that he had included a provision in the tenancy agreement that the property was not to be made available to more than four occupiers (and so would not be an HMO required to be licensed); thirdly, that the apparently reputable tenant had breached that provision without Mr Kumar’s knowledge; and finally, that for part of the period during which the offence was said to have been committed, 20 September 2019 to 1 April 2020, he had been abroad and, at the end of the period, was unable to return due to Covid restrictions.

There was no basis for the FTT’s suggestion that Mr Kumar was obliged to “supervise” the letting of the House to the respondents. His relationship was with LML, not with the respondents. The FTT’s suggestion that it would have been prudent to insist that the tenancy with LML include “provisions requiring compliance with licensing and other standards”, overlooked the fact that the provisions which he did include, and which would have avoided the need for licensing altogether, were breached. The question was not what would have been prudent, but whether, having regard to all the relevant factors he had a reasonable excuse when LML broke its agreement with him and the House became an HMO without his knowledge. The FTT said that LML’s default mitigated Mr Kumar’s “own fault to a degree” but the suggestion that he was at fault at all depended on the absence of a reasonable excuse, which was not properly addressed by the FTT.

Had this been the only ground of appeal I would have set aside the FTT’s decision on this ground alone and would have substituted a decision that Mr Kumar had a reasonable excuse for having control of an unlicensed HMO, and so had not committed any offence.