Rent Repayment Orders
The Housing Act 2004 has long given certain parties the ability to recover rent paid during a tenancy via Rent Repayment Orders for the specific offense of the landlord operating an unlicensed House in Multiple Occupation. The ability to rely on a claim of this kind was further extended with the implementation of the Housing and Planning Act 2016 which increased the number of offenses that qualified for this sort of remedy.
This is a particularly popular remedy for tenants and local authorities alike because the evolving case law has allowed for substantial awards to be made with, depending on the offense itself, often very little which can be offered by way of a defence. As such we are going to go through some of the basics to show how these sorts of claims can be avoided and what the ramifications can be if you get embroiled in a case of this kind.
a RRO is most commonly applied against a Landlord.. even if the tenant is not without fault
What is a RRO?
A Rent Repayment order is an order requiring the offending party to repay rent that has been paid whilst a relevant offense has been committed. This claim can be made to the First Tier Property Tribunal by either the local authority in the event that they are the party making the rental payments or the tenants directly if they pay rent themselves. The award itself is can require the repayment to the value of up to a maximum of 12 months rental which has been paid.
A RRO is most commonly applied against a Landlord who has been manging and operating a property as an unlicensed House of Multiple Occupation that required licensing through the local authority. One of the main reasons for this is that this offense is essentially a strict liability case meaning that it does not matter that the landlord did not know that the property required licensing. It is enough for an offense to be committed to simply show that the property required licensing and there was no license in place.
In addition to the above HMO offense, the Housing and Planning Act also entitles the applicant to make a claim to also cover the following situations:
• Failure to comply with an Improvement Notice under section 30 of the Housing Act 2004;
• Failure to comply with a Prohibition Order under section 32 of the Hosing Act 2004;
• Breach of a banning order made under section 21 of the Housing and Planning Act 2016;
• Using violence to secure entry to a property under section 6 of the Criminal Law Act 1977;
• Illegal eviction or harassment of the occupiers of a property under section 1 of the Protection from Eviction Act 1977.
Who can a penalty be awarded against?
The award is almost always made against the tenant’s direct landlord i.e. the person benefiting from the receipt of the rental that is being paid. This issue is an example of where the case law has developed in recent years. The original position as set out in Goldsbrough & Anor v CA Property Management Ltd & Ors (2019) was that even the superior landlord could be pursued even if that superior landlord was not in control over who was in occupation of the property and was not actually centrally linked to the party making a claim. This position was later overturned in the case of Rakusen v Jepson & Ors, Safer Renting Intervenor (2021).
Each of those cases warrants significantly further detail and discussion than we will afford in this article. However, this does show that the area is evolving and these changes need to be monitored carefully as each new case has the potential to alter the previously accepted and followed position.
Value and Limits to the claim:
If the claim itself can be up to a maximum of 12 months of rent whilst the offense has been committed, the question remaining is if the maximum is 12 months, what factors will be taken into account when deciding on the final value?
The factors considered by the tribunal will be those set out in Section 44 Housing and Planning Act:
(4) In determining the amount, the tribunal must, in particular, take into account –
(a) the conduct of the landlord and the tenant;
(b) the financial circumstances of the landlord; and
(c) whether the landlord has at any time been convicted of an offence to which this Chapter applies.
These factors were further investigated in the case of Williams v Parmar & Ors (2021) which now means that the tribunal should look to compare the respective parties actions to try to work out who has been worse. This will without doubt lead to significant arguments from both parties, landlord trying to downplay the effect of their breaches whist the tenant arguing the opposite.
It is worth noting for landlords that even if the tenant is also not without fault, this will not be an absolute defence by any means. The award is designed to be significant and to penalise the landlord so that they do not profit from their breach and are actively incentivised to make sure the same thing does not happen again.
This particular area is very case specific and can be complex. This blog is only an introduction to the topic and so if further advice is required then we would be happy to assist.
When giving comment and advice on a non-specific basis, Boyes Turner cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems it is recommended that professional advice be sought.
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