Jagtar Singh Aytan & Ors v Theo Moore & Ors

Where the maximum-rent provisions in section 46 do not apply, a rent repayment order is not presumed to equal all rent paid during the relevant period. The tribunal must determine an amount which relates to that rent, having particular regard to the statutory factors and any other relevant circumstances, including the seriousness of the offending and the purposes of the jurisdiction.

The exercise is evaluative and proportionate. It does not require a forensic inquiry into every aspect of the parties’ conduct. A landlord’s reliance on an agent will rarely establish a reasonable excuse for operating an unlicensed HMO; ordinarily, reliable contractual responsibility, justified reliance on the agent’s competence, and a reason why the landlord could not ascertain the requirements personally will be needed.

This combined decision concerned two landlords’ appeals from rent repayment orders made by the First-tier Tribunal (“FTT”) under the Housing and Planning Act 2016.

In Aytan v Moore, the landlords let a three-bedroom flat to three unrelated tenants after an additional HMO licensing designation took effect. They contended that ignorance of the designation and reliance on their managing agent gave them a reasonable excuse. The FTT rejected that defence and ordered repayment of the full 12 months’ rent.

In the related Wilson appeal, the landlord accepted that his five-occupant HMO required a licence. The FTT rejected his reasonable-excuse defence and ordered repayment of the full relevant rent, less utilities and council tax.

The common issue was whether the FTT had wrongly treated the full rent as the starting point from which deductions could be made only in limited circumstances.

1. Both appeals succeeded on quantum. The FTT had adopted an erroneous approach by treating the maximum rent as the presumptive award and looking only for deductions. In cases outside section 46 of the Housing and Planning Act 2016, there is no such presumption. The amount must relate to the rent paid, but may be a proportion of it, rent less specified sums, or a combination of both.

2. Section 44(4) requires particular regard to the conduct of the landlord and tenant, the landlord’s financial circumstances, and relevant convictions. The tribunal may also consider other relevant matters, including the seriousness of the offending and the purposes of rent repayment orders: punishment, deterrence and removal of financial benefit. The exercise must be balanced and proportionate. It need not involve a fine-grained examination of every aspect of conduct or comparison with other landlords.

3. The reasonable-excuse appeal in Aytan v Moore was dismissed. Ignorance of an additional licensing designation may be relevant, but does not itself establish a reasonable excuse. The landlords had produced no contractual evidence showing that their agent was responsible for licensing or for keeping them informed. They also had no reasonable basis for relying on the agent’s silence. Their property interests meant that they could be expected to take responsibility for licensing obligations.

4. Re-making the decisions, the Tribunal treated the Aytan landlords’ conduct as serious but found no evidenced tenant harm and that the property was in good condition. It ordered repayment of 85% of £31,200, namely £26,520, divided equally between the three tenants.

5. In the Wilson appeal, the absence of fire doors and alarms created a dangerous situation and was a compelling aggravating factor. The Tribunal ordered 90% of the FTT’s calculated sums: £5,468 each to Edwards and Wiselka, £5,119 to Stoneman, and £1,340 to Arrow.

• Upper Tribunal (Lands Chamber): In Aytan v Moore, the Tribunal dismissed the challenge to liability under section 72(5) of the Housing Act 2004, but set aside and substituted the FTT’s full-rent order. In the related Wilson appeal, it set aside and substituted the FTT’s quantum decision.

• First-tier Tribunal (Property Chamber): Made rent repayment orders in both matters after finding that the landlords had managed unlicensed HMOs without a reasonable excuse. The FTT decisions’ citations are not stated in the judgment.