Key Facts
- •Mrs. Irvine, the superior landlord in a rent-to-rent scheme, was ordered by the FTT to repay £45,043.88 in rent to tenants of an unlicensed HMO.
- •The property, 20 Hailsham Road, was initially let to Uptown Properties Ltd, which subsequently sublet individual rooms, creating an unlicensed HMO.
- •Uptown's liquidation led to the tenants paying rent directly to Mrs. Irvine's husband, acting as her agent.
- •Mrs. Irvine argued reasonable excuse for the unlicensed HMO due to lack of involvement and unexpected circumstances.
- •The initial appeal was dismissed, then set aside due to procedural complexities involving judicial review.
- •The Supreme Court's decision in Rakusen v Jepsen established that rent repayment orders can only be made against immediate landlords.
Legal Principles
Rent Repayment Orders (RROs) can only be made against the immediate landlord of the tenant making the claim.
Rakusen v Jepsen [2023] UKSC 9
A person in receipt of rack rent for a house has control of it for the purposes of HMO licensing offences.
Housing Act 2004, section 263(1)
It is a criminal offence to control an unlicensed HMO, but a reasonable excuse is a defence.
Housing Act 2004, section 72(1) & (5)
More than one person can have control of a house simultaneously.
London Corporation v Cusack-Smith [1955] AC 337
The Upper Tribunal has the power to review and set aside its own decisions.
Tribunals, Courts and Enforcement Act 2007, section 10(4)(c)
A tribunal must give adequate reasons for its decisions, particularly when finding criminal culpability.
English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605
Outcomes
Appeal allowed; FTT decision set aside.
The FTT lacked jurisdiction to make the RRO for the period before Uptown's liquidation due to Rakusen v Jepsen. The FTT also failed to adequately consider the defence of reasonable excuse.
Rent repayment order substituted for a lesser amount.
Redetermination considering only the period from 7 February to 18 August 2019, with a reduced amount due to the partially successful reasonable excuse defence and assessment of the offence's seriousness.