Jenny Yi v Nick Hobbs & Anor

Rent arrears falling outside the repayment period may nevertheless be relevant to the tenant’s conduct when fixing a rent repayment order. Under Housing and Planning Act 2016, the tribunal has discretion as to their effect; it is not obliged to deduct them in every case. It must, however, give an intelligible reason for the adjustment selected.

Where the only relevant conduct was unexplained arrears and there was no countervailing conduct by the landlord, it was unjustified to allow credit for only half the arrears. The full arrears were set against the assessed repayment. Obvious arithmetical errors in an order should be corrected on appeal.

The appellant landlord appealed rent repayment orders made by the First-tier Tribunal (Property Chamber), reference LON/00BG/HMF/2022/0108, in favour of two occupiers of an unlicensed house in multiple occupation.

Liability for the licensing offence was not challenged. The appeal concerned quantum only. In Mr Hobbs’s case, the First-tier Tribunal had deducted only half of rent arrears which accrued after the period for which repayment was sought. In Mr Alaike’s case, the calculation contained arithmetical errors.

The central issue was whether arrears outside the repayment period could be considered as tenant conduct and, if so, how they should affect the amount ordered.

1. Appeal allowed. The Tribunal set aside the rent repayment order in favour of Mr Hobbs and substituted an award of £1,608.92. It also substituted £3,420.06 for the erroneous award in favour of Mr Alaike.

2. Section 43(2) of the Housing and Planning Act 2016 confines a rent repayment order to rent paid for the relevant period. Thus, arrears accruing within that period would not form part of the amount repayable. But arrears accruing outside it may be considered separately as tenant conduct under section 44(4)(a).

3. The discretion concerning conduct does not require arrears outside the repayment period to be deducted automatically, either wholly or partly. The Tribunal approved the approach in Kowalek v Hossanein Ltd, [2021] UKUT 143 (LC), that such arrears may be relevant to quantum. The First-tier Tribunal therefore had power to allow credit for only part of the arrears if the circumstances justified that result.

4. It gave no explanation for allowing credit for only half the arrears. The unexplained arrears were the only relevant conduct of either party, and there was no reason not to set their full amount against the repayment. The Tribunal recalculated the award after correcting the utilities arithmetic, applying the unchallenged 50% culpability reduction, and then deducting the full £1,699 arrears.

5. The separate award to Mr Alaike rested on conceded calculation errors. The corrected figure was substituted. Both substituted sums were payable immediately; the unappealed First-tier Tribunal order for the application fee remained in force.

• Upper Tribunal (Lands Chamber): allowed the landlord’s appeal from the First-tier Tribunal’s rent repayment orders and substituted corrected awards.
• First-tier Tribunal (Property Chamber): made rent repayment orders following an unlicensed-HMO offence, under reference LON/00BG/HMF/2022/0108.