Hannah Chinn & Ors v Marie-Louise Høilund-Carlsen & Anor

When assessing a rent repayment order, a landlord’s inexperience or ownership of a single property may mitigate an inadvertent breach, but it cannot mitigate a deliberate breach of licensing requirements. Deliberate non-compliance is an aggravating consideration. An appellate tribunal may interfere with the First-tier Tribunal’s assessment of quantum where it has taken an irrelevant consideration into account or failed to take account of a relevant one. The assessment remains fact-sensitive, and other matters, such as the condition of the property or the landlord’s withdrawal from the letting market, may still provide mitigation.

The tenants appealed against a rent repayment order made by the First-tier Tribunal (Property Chamber) concerning an unlicensed house in multiple occupation. Three tenants occupied the flat, although only two were named in the tenancy agreement. The landlords had rejected a proposed letting to four occupants because their mortgage did not permit an HMO, and the letting agent advised that only two tenants should appear on the agreement.

The First-tier Tribunal found that the landlords were aware that a licence was required but reduced the award to 35% of the relevant rent, partly because they were inexperienced landlords with one property and had left the letting market. The central issue was whether those considerations justified reducing the award despite the deliberate breach.

1. Appeal allowed in part. The First-tier Tribunal’s decision on quantum was set aside and the Upper Tribunal substituted an order requiring repayment of 50% of the relevant rent, amounting to £10,322.
2. The First-tier Tribunal’s findings were initially unclear because it both found that the landlords knew a licence was required and referred to their reliance on the letting agent. On the evidence, however, the agent had explained that the arrangement would avoid the licensing consequence only if the landlord did not know about the third occupant. The landlords’ evidence was carefully framed and did not state that they were unaware of the third occupant. The First-tier Tribunal had not rejected the tenant’s evidence that the landlord knew who the third occupant was.
3. The arrangement was therefore a deliberate attempt to avoid a licence requirement of which the landlords were aware. Reliance on the agent did not establish a reasonable excuse under section 72(5) of the Housing Act 2004.
4. In assessing the amount of a rent repayment order under section 44 of the Housing and Planning Act 2016, the landlord’s inexperience or ownership of only one property is relevant only to an inadvertent breach. It should not reduce an award for a deliberate breach. Such a breach is instead an aggravating factor.
5. The First-tier Tribunal had therefore erred in law by taking the landlords’ inexperience into account as mitigation and failing to take the deliberate breach into account as aggravation. Remittal was disproportionate and unnecessary. The nature of the property and the landlords’ withdrawal from the letting market remained relevant mitigating considerations, justifying an award of 50% rather than a higher percentage.

• First-tier Tribunal (Property Chamber): found that the flat required an HMO licence and made a rent repayment order of £7,225, representing 35% of the relevant rent. The reference was LON/00BE/HMF/2025/0614.
• Upper Tribunal (Lands Chamber): allowed the appeal on quantum, set aside the First-tier Tribunal’s assessment and substituted an order for repayment of 50% of the relevant rent.