Sonja Mitterhuber v Christina Lopez Hernandez & Anor

For a rent repayment order based on an unlicensed house in multiple occupation, the applicant must prove beyond reasonable doubt that the relevant occupiers used the accommodation as their only or main residence. Occupation alone does not establish that requirement. The necessary inference may be drawn pragmatically from the circumstances, but there must be evidence capable of supporting it. A finding unsupported by evidence, or an omission to decide a fact essential to the outcome, is an error of law. The appellate tribunal may set the decision aside and substitute its own decision where there is no proper basis for remittal.

The respondents obtained rent repayment orders from the First-tier Tribunal concerning a flat which they said had been occupied by three tenants. The appellant landlord appealed, arguing that there was insufficient evidence that a third occupier had lived at the property as her only or main residence, as required by section 254(2)(c) of the Housing Act 2004.

Permission to appeal was granted on that issue. The appellant also sought to rely on fresh evidence, but permission was refused because it could have been produced below and there was no proper explanation for its omission. The central issue was whether the FTT had made, or could properly support, the necessary finding about the third occupier’s residence.

1. Appeal allowed. The FTT’s decision was set aside and the Upper Tribunal substituted a decision refusing the applications for rent repayment orders.
2. An applicant for a rent repayment order must prove to the criminal standard that the property was an HMO, that it required a licence, that it was unlicensed, and that the landlord was managing or controlling it. The relevant issue was the requirement in section 254(2)(c) of the Housing Act 2004 that the relevant occupiers used the accommodation as their only or main residence.
3. The FTT had found only that the third occupier, and later other occupiers, occupied the property. It had not found that any of them lived there as their only or main residence. The evidence contained no proper basis for such a finding.
4. The tribunal may infer residence from the circumstances. Direct evidence and cast-iron certainty are not required, particularly where the occupier is not the applicant. However, there must be circumstances capable of supporting the inference. In Opara v Olusemi [2020] UKUT 96 (LC), the evidence included communications, references to the property as the occupiers’ home, and receipt of Housing Benefit. Nothing comparable existed here.
5. A finding of fact that cannot be justified by the evidence, or failure to find a fact crucial to the decision, permits the Upper Tribunal to set the decision aside. The matter was not remitted because no relevant further evidence had been identified.

• Upper Tribunal (Lands Chamber): appeal from the First-tier Tribunal (Property Chamber) allowed. The FTT decision was set aside and the applications for rent repayment orders were refused.