Rent repayment orders: FTT must consider whether statutory defence is applicable

When proceedings are brought against a person for the offence of being in control of or managing an unlicensed house in multiple occupation, contrary to section 72(1) of the Housing Act 2004, the First-tier Tribunal must consider whether any of the statutory defences arise on the facts, even when they are not pleaded. In Fashade v Albustin and others [2023] UKUT 40 (LC), the appellant landlord was the owner of a property situated in Lewisham, London SE23. The respondents had formerly occupied the property under tenancies granted by the landlord. Pursuant to section 41 of the Housing and Planning Act 2016, the respondents applied to the FTT for a rent repayment order on the basis that from 13 August 2020 to 13 January 2022 their landlord had been in control of or managed an unlicensed HMO. The landlord defended the claim by contending that he had attempted to apply for a renewal licence in March 2020 and July 2021, but technical difficulties and the coronavirus pandemic had prevented a licence being obtained. The landlord claimed to have email evidence of communications with the relevant local housing authority showing the efforts he had made, but these were not produced at the hearing. Yet, there was some evidence before the FTT that by September 2021 the landlord had applied for a licence. The FTT made a rent repayment order (RRO) against the landlord. It used the total rent paid during the period as the starting point in assessing the RRO. On appeal, the Upper Tribunal (Lands Chamber) was critical of the FTT’s approach. Relying on IR Management Services Ltd v Salford City Council [2020] UKUT 81 (LC); [2020] PLSCS 47, the UT found that the FTT had failed to consider whether any of the statutory defences arose. Under section 72(4)(b) of the 2004 Act, it is a defence to proceedings brought on the basis that an offence under section 72(1) has been committed that the landlord has applied for a licence. Based on the evidence, the UT found that it was more likely than not that the landlord had applied for a licence by 9 September 2021. Accordingly, he was no longer committing the offence under section 72(1) of the 2004 Act after that date. The UT was also critical of the FTT’s assessment of the amount of the RRO. In light of the authorities, it underscored that the total amount of rent paid was not the correct starting point as such an approach failed to take into account the seriousness of the offence committed. Elizabeth Dwomoh is a barrister at Lamb Chambers