Landlord Successfully Appeals Against Rent Repayment Order

The Upper Tribunal (UT) has upheld a challenge to a rent repayment order made against the landlord of a house in an area designated by the local authority as subject to additional licensing of houses in multiple occupation (HMOs).

The landlord had let the rooms of the house on assured shorthold tenancies. The house did not meet the standard definition of an HMO, but the effect of the designation was that houses occupied by three or four persons in two or more households were required to be licensed as HMOs. One of the tenants applied to the First-tier Tribunal (FTT) for repayment of 12 months' rent from April 2021 to April 2022, on the ground that the landlord was a person having control of or managing an HMO which was required to be licensed but was not, contrary to Section 72(1) of the Housing Act 2004.

The FTT found that, throughout the 12-month period, the property had comprised two households and should therefore have been licensed as an HMO under the additional licensing scheme. It ruled that the landlord had committed the offence under Section 72(1) and ordered her to repay 75 per cent of the rent paid by the tenant over the period, or £6,480.

In her appeal to the UT, the landlord claimed that she had a reasonable excuse because the local authority's website had defined an HMO as comprising more than three separate households. The FTT had rejected this claim after checking the website, which stated that an additional licence was required if the HMO was shared by three to four tenants living in two or more households. The UT noted that a property actually fell within the additional licensing designation if it had three or more occupiers, not tenants. If, as the landlord claimed, one of the other tenants had left in June 2021, she would have been misled into thinking she did not need a licence because the property only had two tenants from that point.

The UT was unable to substitute its own decision as it was not known what evidence about the website the landlord had given before the FTT: the FTT had not recorded this and a transcript of the hearing was unavailable. The FTT had also made no finding of fact about when the other tenant had left, having concluded that it did not matter because the house nonetheless required an HMO licence throughout the relevant period.

The UT concluded that, in the circumstances, the FTT's decision had to be set aside. It remitted the matter to a differently constituted FTT for rehearing.