Amlendu Kumar v Nikola Kolev & Ors

A rent repayment order may be made only against the landlord under the tenancy generating the rent to be repaid. The relevant landlord must have received the rent directly from the tenant. A superior landlord is outside the scope of the order where the tenant paid rent only to an intermediate tenant.

Where a sub-tenancy exceeds the remaining term of the head tenancy, it may operate as an assignment by operation of law. That does not necessarily determine the tenancy generating the rent for the purposes of a rent repayment order. Subsequent conduct may establish new implied periodic tenancies between the parties who continued to act as landlord and tenant.

The appellant owned a house which he let to Like Minded Living Ltd under a rent-to-rent arrangement. The company granted the respondents sub-tenancies of rooms for terms extending beyond the expiry of its own lease. The respondents paid rent to the company, not to the appellant.

The First-tier Tribunal treated the appellant as the respondents’ landlord and made rent repayment orders under Housing and Planning Act 2016. It also found that he had control of, or managed, an unlicensed HMO. The appeal concerned the effect of the overlong sub-tenancies, the statutory definitions of control and management, reasonable excuse, and the calculation of the awards.

1. Appeal allowed. The FTT’s decision was set aside and the rent repayment order was discharged.
2. Under sections 40(1) and 40(2) of the Housing and Planning Act 2016, the landlord against whom an order is made must be the landlord under the tenancy which generated the rent to be repaid. Applying Rakusen v Jepsen, the rent must naturally be rent received directly from the tenant. The respondents paid all relevant rent to LML, so nothing could be ordered to be repaid by the appellant.
3. The overlong sub-tenancies initially operated as assignments by operation of law under the principle in Milmo v Carreras, including in relation to parts of the premises as explained in Grosvenor Estates v Cochran. However, the parties’ subsequent conduct was inconsistent with continuation of the assigned headlease relationship. The respondents continued paying LML, while LML continued paying the appellant. This conduct established new implied periodic tenancies between the respondents and LML. Any rights under the headlease were surrendered by operation of law.
4. The FTT was wrong to find that the appellant was a person managing the HMO under section 263(3) of the Housing Act 2004, because he received rent from LML, not from the persons occupying parts of the premises. The Tribunal left open whether more than one person could be a person having control under section 263(1).
5. The FTT had also failed adequately to address the reasonable-excuse defence under section 72(5) of the Housing Act 2004. Relevant matters included the appellant’s reliance on an apparently reputable tenant, the occupancy restriction in the headlease, LML’s breach without his knowledge, and his absence abroad. Had it been necessary, the Tribunal would have substituted a finding that the appellant had a reasonable excuse.
6. The quantum assessment was independently flawed because it used rent received by LML and considered LML’s conduct. Those issues did not arise for final determination because the order lacked jurisdictional foundation.

• Upper Tribunal (Lands Chamber): the appeal from the First-tier Tribunal was allowed; the FTT decision was set aside and the rent repayment order discharged.
• First-tier Tribunal (Property Chamber): made rent repayment orders totalling £7,549.25 against the appellant in favour of the respondents.