Global 100 Limited v Sasha Jam Ross & Ors

For the statutory exception concerning a house in multiple occupation to apply, the owner or lessee must have entered into an arrangement with a non-owner or non-lessee by virtue of which that person receives rents or other payments from occupiers. The arrangement may be wider than a single contract, but it must itself provide the necessary link between the arrangement and receipt of the payments. A general business model, commercial purpose, or unexplained movement of money is insufficient without evidence connecting occupiers’ payments to the recipient through an arrangement made by the owner or lessee.

The respondents obtained rent repayment orders against Global 100 Limited under Housing and Planning Act 2016 s.43. The alleged underlying offence was managing or having control of an unlicensed house in multiple occupation under Housing Act 2004 s.72(1).

The property was owned by a local housing authority. The authority had entered into an agreement with Global Guardians Management Ltd, which enabled Global 100 Limited to grant occupation licences to property guardians. The authority did not receive payments directly from the guardians.

The FTT held that the agreement was a licence, not a lease, and that the statutory requirement that the payments be received by virtue of the arrangement was not satisfied. The appeal concerned whether the FTT had wrongly limited its consideration to the written agreement, and whether the wider business arrangements established the necessary statutory link.

1. The appeal was dismissed. The FTT had asked itself the correct statutory questions and was entitled to conclude that the exception in paragraph 2 of Schedule 14 to the Housing Act 2004 did not apply.

2. Section 263(3)(b) requires an owner or lessee to have entered into an arrangement with another person who is not an owner or lessee, by virtue of which that other person receives rents or other payments from occupiers. The owner or lessee must also have received those payments but for entering into the arrangement. The recipient may receive the payments directly or through an agent or trustee.

3. An arrangement may be wider than a formal contractual agreement. However, it must be an arrangement made by the owner or lessee with the person receiving the payments and must itself provide the requisite connection between the arrangement and the receipt of those payments. The appellant’s submission that the arrangement included all agreements, understandings and practices making the commercial objective possible was too broad.

4. The FTT had considered the wider context, including the inter-company arrangements. It was entitled to find that there was no evidence of a wider arrangement by virtue of which payments made by the occupiers reached Global Guardians Management Ltd. The fact that money passed under the agreement, or that the parties were in business together, did not establish its source or permit the payments to be traced from the occupiers.

5. The concern that a narrow interpretation would undermine the anti-avoidance purpose identified in Cabo v Dezotti did not arise on the evidence. The alternative grounds advanced by the respondents did not need to be considered.

• Upper Tribunal (Lands Chamber) — Appeal from the FTT’s rent repayment orders dismissed.
• First-tier Tribunal (Property Chamber) — Rent repayment orders made under s.43 of the Housing and Planning Act 2016.