Jacqueline Hancher v Luke David & Ors

In assessing a rent repayment order, the tribunal must not treat the whole rent, less utilities, as the default award. It must first identify the relevant rent and deduct tenant-only utility costs where proved. It must then set a seriousness-based starting point, taking account of the relative gravity of the relevant offence and its particular features. Finally, it must adjust that figure where appropriate for the matters in section 44(4) of the Housing and Planning Act 2016.

A landlord who seeks a deduction for utility payments must provide evidence of the payments, although a tribunal may estimate them where precise figures are unavailable. Deliberate operation of an unlicensed HMO after advice that a licence was required justified a starting point of 65% of the relevant rent on the facts.

The respondent tenants occupied rooms in a flat owned by the appellant. The First-tier Tribunal found that the flat was an HMO requiring a licence and that the appellant had deliberately committed the offence of managing or controlling an unlicensed HMO under section 72(1) of the Housing Act 2004.

The First-tier Tribunal made rent repayment orders which, subject to rent arrears, repaid the tenants’ full rent. The appellant appealed on the grounds that the tribunal had used the wrong approach to quantification and had failed to deduct utility payments. The central issue was the lawful method for assessing the amount of the rent repayment orders.

1. Appeal allowed. The First-tier Tribunal’s decision was set aside because it had treated the maximum recoverable rent as the default award. That was the approach rejected in Williams v Parmar [2021] UKUT 244 (LC). It failed to address the seriousness of the licensing offence, which was a crucial aspect of the landlord’s conduct.

2. Following Acheampong v Roman and others [2022] UKUT 239 (LC), the Tribunal re-made the decision by: identifying the rent for the relevant period; deducting tenant-only utility costs where established; selecting a seriousness-based percentage of the remaining rent; and then considering any adjustment under section 44(4) of the Housing and Planning Act 2016.

3. No utility deduction was made. The landlord had not produced the tenancy agreements or evidence of the utility sums actually paid, despite repeated requests. The Tribunal therefore could not make an adjustment for utilities.

4. The section 72(1) offence was not among the most serious offences capable of founding a rent repayment order. Nor was this among its most serious instances: there was no evidence of fire hazards and no suggestion that the property would have failed to qualify for a licence. But the offence was deliberate. The landlord had chosen not to apply for a licence after being advised by her architect that one was necessary. A repayment of 65% of the relevant rent fairly reflected that seriousness.

5. There was no evidence of relevant convictions. The unchallenged findings on the parties’ conduct and the landlord’s financial circumstances did not justify a further adjustment. The substituted orders required payments within 28 days of £5,129 to Mr David, £4,201 to Ms Mears, £5,280 to Mr Cramer, and £5,733 to Ms Morel-Fonteray.

• Upper Tribunal (Lands Chamber): Allowed the appeal, set aside the First-tier Tribunal’s rent repayment orders, and substituted reduced orders: [2022] UKUT 277 (LC).
• First-tier Tribunal (Property Chamber): Found that the appellant had committed the unlicensed-HMO offence and made rent repayment orders which largely repaid the tenants’ full rent.