A rent repayment order (RRO) is powerful tool used to sanction landlords who have committed housing-related offences under section 40 of the Housing and Planning Act 2016. In Awad v Hooley [2021] UKUT 55 (LC); [2021] PLSCS 51 the Upper Tribunal (Lands Chamber) was asked to consider whether the First-tier Tribunal had correctly exercised its discretion in determining the amount of rent to be repaid by the landlord in circumstances where the tenant had been persistently in arrears of rent.
The respondent landlord let her property situated in Hastings to the appellant tenant in 2017. In January 2020, the respondent was granted possession of the property on the basis of rent arrears, but that order was set aside due to a procedural irregularity.
The house was in an area subject to selective licensing, but was not licensed throughout the tenancy. In February 2020, the tenant applied to the FTT for a RRO for the period 4 December 2018 to 11 July 2019. The FTT noted that this was the period when the tenant had paid the most towards her rental liability.
Pursuant to section 44(3)(a), the FTT found that the maximum rent repayable by the landlord was an amount not exceeding 12 months during which the offence was being committed. The FTT arrived at the sum of £4,201.09 after deducting the tenant’s arrears and housing benefit paid pursuant to section 44(3)(b).
When determining the amount of rent repayable, the FTT was entitled to take into consideration the conduct of both the landlord and tenant as well as the financial circumstances of the landlord: sections 44(4)(a) and 44(4)(b). The FTT noted that the appellant’s only criticism of her landlord was that she had failed to obtain a licence; she had otherwise been a good landlord. The FTT criticised the tenant’s conduct on two fronts. Firstly, although it was accepted that she had limited financial means, there was no plausible explanation for her failure to pay more towards her rental shortfall. Secondly, she had no proper excuse for denying the landlord’s contractors entry to the property to carry out statutory checks. In the circumstances, the FTT reduced the maximum rent repayable by 75%.
The tenant appealed the amount of the RRO and the FTT’s exercise of its discretion under section 44(4). The UT dismissed the appeal. It noted that the FTT was correct to deduct the rent arrears owed when calculating that maximum amount of rent repayable during the relevant period. The landlord was entitled to apportion any rent received during that period against any arrears of rent accrued outside that relevant period. The rent arrears could not be added subsequently by the FTT because the arrears were never paid by the tenant.
The tenant’s argument that housing benefit should have been credited so as to reduce her rent arrears and not the amount of rent repaid by her landlord was also rejected. Housing benefit was paid in respect of rent and not rent arrears. Section 44(3)(b) required such payments to be deducted from the amount payable under a RRO. This was fair in circumstances where a local housing authority could also demand repayment of housing benefit from the landlord.
The UT found that the FTT’s exercise of its discretion was unimpeachable. It could not be criticised for taking the tenant’s conduct into consideration. Section 44(4)(a) mandated the same and that was not limited to a consideration of the tenant’s conduct only insofar as it had an effect upon the offence itself. The conduct need only be relevant. The conduct of both parties was highly relevant in the present case. It would have offended against any notion of justice for a tenant in persistent arrears to seek a RRO in respect of the only period where she had made regular payments.
Elizabeth Dwomoh is a barrister at Lamb Chambers
