Edouard Cussinel & Anor v Alan Guerin & Ors
[2023] UKUT 235 (LC)
Amlendu Kumar v Nikola Kolev & Ors
29 August 2024
[2024] UKUT 255 (LC)
Upper Tribunal
A homeowner let his house to a company, which then sublet rooms. The sub-tenants sued the homeowner for rent because the company's lease was shorter than their sublets. The court said the homeowner didn't owe them anything because they never paid him directly, even if he might have been considered their landlord due to the legal quirks of the lease arrangements.
Key Facts
- •Mr. Kumar owned an HMO let to Like Minded Living Ltd (LML) in a 'rent to rent' arrangement.
- •LML granted sub-tenancies to respondents for terms exceeding LML's head lease.
- •The HMO was unlicensed, leading to respondents applying for rent repayment orders against Mr. Kumar.
- •Respondents paid rent to LML, not Mr. Kumar.
- •The FTT ruled that Mr. Kumar was the respondents' landlord due to the sub-tenancies exceeding the head lease term.
- •The Upper Tribunal considered whether the FTT had jurisdiction to order Mr. Kumar to repay rent.
Legal Principles
A rent repayment order can only be made against the tenant's immediate landlord who received the rent.
Rakusen v Jepsen [2023] UKSC 9
Where a tenant grants a sub-tenancy for a term equal to or longer than their own tenancy, it's an assignment, creating a direct landlord-tenant relationship between the head landlord and sub-tenant.
Milmo v Carreras [1946] 1 KB 306; Grosvenor Estates v Cochran [1999] 2 EGLR 83
Section 40, Housing and Planning Act 2016: Rent repayment orders require the landlord under a tenancy to repay rent paid by a tenant.
Housing and Planning Act 2016
Section 263(1), Housing Act 2004: Defines "person having control" as the person receiving rack-rent.
Housing Act 2004
Section 72(1), Housing Act 2004: An offence is committed if a person has control of or manages an unlicensed HMO.
Housing Act 2004
Section 72(5), Housing Act 2004: Provides a defense of reasonable excuse for the offence.
Housing Act 2004
The consequence of a landlord granting a tenancy to a third party with the agreement of the tenant is that the original tenancy is surrendered by operation of law and replaced by the new tenancy between the landlord and the third party.
Metcalfe v Boyce [1927] 1 KB 758
Outcomes
Appeal allowed; FTT's rent repayment order set aside.
Mr. Kumar was not the respondents' immediate landlord; they paid rent to LML, not him. The FTT incorrectly applied the legal principle regarding assignments of tenancies in this context, and didn't properly consider the defence of reasonable excuse.