Rent repayment orders: consideration of the seriousness of the offence

In Hancher v David and others [2022] UKUT 277 (LC); [2022] PLSCS 172 the Upper Tribunal (Lands Chamber) has once again stressed the importance of the First-tier Tribunal having regard to the seriousness of the offence when assessing the amount of a rent repayment order. The appellant was the freehold owner of a large Victorian warehouse in Haringey, London N4. The warehouse was divided into four units. The appellant used one unit as a fashion studio. Unit 10D was a self-contained residential flat on the first floor, which she rented to the four respondents on assured shorthold tenancies between 2017 and 2020. Pursuant to section 41 of the Housing and Planning Act 2016, the tenants applied to the FTT for a rent repayment order to be made against the appellant. The tenants claimed that she, as their landlord, had committed an offence listed in section 40; namely, the offence under section 72(1) of the Housing Act 2004 of managing or being in control of a house in multiple occupation that was required to be licensed but was not so licensed. The FTT was satisfied beyond a reasonable doubt that the appellant had committed the offence. In so doing, it rejected her defence of reasonable excuse; namely, her belief that the warehouse did not require an HMO licence because it was for mixed business and residential use. The evidence before the FTT proved that the appellant had been advised that 10D was an HMO. The FTT made an RRO. On appeal by the landlord, the UT found that the FTT had erred in not following the approach set out in Williams v Parmar [2021] UKUT 244 (LC); [2021] PLSCS 169. The FTT had fallen into error by treating the maximum rent paid as the default starting point, from which only deductions were made. In its assessment of the RRO, the FTT failed to also take into consideration the seriousness of the offence committed. Relying on the additional guidance given by the UT in Acheampong v Roman; Choudhury v Razak and another [2022] UKUT 239 (LC); [2022] PLSCS 152, the UT underscored the approach the FTT must adopt when assessing the amount of an RRO. In precis, if the FTT is satisfied beyond a reasonable doubt that an offence had been committed, it must: (a) ascertain the whole of the rent paid for the relevant period; (b) deduct any payments made by the landlord for the tenant’s benefit, in particular utility bills; and (c) consider the seriousness of the offence and the appropriate percentage of the rent to reflect that seriousness, in order to generate the starting point. In the present case, the UT commented that an offence under section 72(1) of the 2004 Act was not one of the more serious offences for which an RRO could be made. Further, the present case was not one of the most serious examples of a section 72(1) offence. In particular, there was no evidence of any fire hazards at the unit. Elizabeth Dwomoh is a barrister at Lamb Chambers