When a landlord commits a housing-related offence under section 40 of the Housing and Planning Act 2016, a tenant can apply to the First-tier Tribunal for a rent repayment order to be made against their landlord. Both in Goldsbrough v CA Property Management Limited and Gardner [2019] UKUT 311 (LC) and Rakusen v Jepsen [2020] UKUT 298 (LC); [2020] PLSCS 203 the Upper Tribunal (Lands Chamber) found that such an order could be made against a superior landlord. In Irvine v Metcalf and others [2021] UKUT 0060 (LC) a superior landlord unsuccessfully argued that both cases had been decided wrongly.
Louise Irvine was the owner of a house in multiple occupation in Tooting, London, SW17. In February 2016, the property was leased to a company for a period of two years. Irvine’s husband was named as landlord on the lease. Between March 2016 and October 2019 the company sublet the property to the respondents, who did not form a single household. The company received rents directly from the tenants. During this period, management of the property was undertaken by Irvine’s husband who acted as her agent. The company eventually went into liquidation and the lease was disclaimed by the liquidator.
Each of the respondents applied to the FTT for a rent repayment order against Irvine. At trial it was admitted that the property was an HMO and was subject to the mandatory licensing regime under the Housing Act 2004. It was also admitted that during the course of the respondents’ tenancies the property had not been licensed.
It is a criminal offence under section 72(1) of the 2004 Act to manage or be in control of an HMO that requires a licence, but is not so licensed. It is also a housing related offence under section 40 of the 2016 Act. Irvine argued that it was the company and not she who had committed the offence because it was in control of the property. The company received the rental payments and as she was not the immediate landlord, she could not be ordered to repay the same.
Relying upon Goldsbrough the FTT found Irvine had committed the offence and made a rent repayment order against her in the sum of £45,043.88. The FTT found that under the terms of the headlease with the company Irvine, as freeholder, had assumed management responsibilities for the property. These responsibilities had been undertaken by her husband acting as her agent.
Relying on both Goldsbrough and Rakusen, the UT upheld FTT’s decision. On the facts of the case it found that although the company was the intermediate landlord, it did not prevent Irvine being a person in control or management of the property. Further, as a superior landlord she was not exempted from the consequences of section 40 of the 2016 Act.
Practitioners should note that permission to appeal to the Court of Appeal has been granted in Rakusen. The appeal is due to be heard this year. The question of whether a superior landlord can be subject to a rent repayment is, therefore, yet to be definitely decided.
Elizabeth Dwomoh is a barrister at Lamb Chambers
