Carl Pearton v Betterton Duplex Limited

Section 43(2) of the Housing and Planning Act 2016 imposes cumulative timing requirements for a rent repayment order. For offences relating to an unlicensed HMO, the rent must have been paid both during the period in which the offence was committed and in respect of that period.

Rent paid in advance before the HMO became occupied, and before the offence began, cannot be recovered through a rent repayment order even if it relates to the subsequent period of offending. The statutory wording cannot be disregarded or read down to remedy the resulting practical difficulty.

The appellant and two other tenants entered into a tenancy of a property which constituted an HMO requiring an additional licence. They paid six months’ rent in advance on 20 July 2022, before the tenancy and occupation began on 22 July 2022. The landlord committed the offence of managing or being in control of an unlicensed HMO while the tenants occupied the property.

The First-tier Tribunal accepted that an offence had been committed but concluded that it could not make a rent repayment order because the only rent payment preceded the period of offending. It granted permission to appeal. The central issue was whether advance rent paid before the offence began satisfied section 43(2) of the Housing and Planning Act 2016.

The appeal was dismissed. The First-tier Tribunal had made no error of law.

1. Section 20 of the Housing and Planning Act 2016 gives the First-tier Tribunal jurisdiction to make a rent repayment order for specified housing offences, including the offence under section 72(1) of the Housing Act 2004 of managing or controlling an unlicensed HMO.

2. Sections 41(2) and 43(2) impose separate requirements. Section 41(2) concerns the tenant’s entitlement to apply. Section 43(2) governs the rent which may be repaid. For the relevant offences, the amount must relate to rent paid during a period, not exceeding 12 months, in which the landlord was committing the offence.

3. The reasoning in Kowalek v Hossanein Ltd [2021] UKUT 143 (LC), upheld by the Court of Appeal at [2022] EWCA Civ 1041, applied. Rent must be paid both during the relevant period and in respect of it. Payment before the period fails the first requirement, even where it relates to rent for that period.

4. The property was an HMO only while it satisfied the occupation requirements in section 254(2) of the Housing Act 2004. The offending period therefore began when occupation began on 22 July 2022. The six-month payment made on 20 July 2022 was required by the tenancy agreement on the date of signing and was then due to the landlord. It was not a payment made during the offending period.

5. The Tribunal could not disregard or reinterpret the clear statutory wording to address a perceived loophole concerning advance rent, including the particular vulnerability of students. The appeal therefore failed and no rent repayment order could be made.

• Upper Tribunal (Lands Chamber): Appeal from the First-tier Tribunal (Property Chamber), reference LON/00AG/HMG/2023/0004. The appeal was dismissed.