An interesting recent Rent Repayment Order case is Chow & Chow v. Skipper & Evett [2022] UKUT 5 (LC). This concerned the defence of “reasonable excuse” to a Rent Repayment Order application that the Tribunal accepted.
Reasonable excuse
A ‘reasonable excuse’ is a potential statutory defence that could be advanced, where an application for a Rent Repayment Order has been made. If a landlord successfully argues that they have a reasonable excuse, even if the Tribunal thinks the offence would otherwise have been committed, landlord will not be required to pay the Rent Repayment Order. A reasonable excuse is just that, an excuse which is reasonable for committing the offence. It can, in theory, be anything, though such defences are not often accepted by the Tribunal. Reasonable excuses of varying kinds have been brought before the Tribunal, but there is limited guidance from case law on what will be accepted.
Chow v. Skipper
In this case, the landlord owned two rental properties in the same council area. They let out both properties. The first property they let to the council directly, as it was a house specially adapted for the landlord’s late mother, who had a disability. The council then used the property to house people with disabilities needing council housing. The second property, the one for which the Rent Repayment Order application was made, was let privately by the landlord to two tenants. The first property did not require a licence, but the second property did. The second property required a licence even though only two people occupied it as it was in a selective licensing scheme area.
The council operated an online system for applying for licenses. Both properties appeared in this system. When the landlord was told she had to apply for a licence, she went to the online platform, filled out the form, made the relevant payment, and received a licence back. Some months later, however, she discovered she had made an error. The online system listed each property, with a button to “renew” the licence next to it. When she clicked the renew button on the online system, she had done so for the first property, which did not require a licence, rather than for the second property, which did. She had not noticed her error because she had only been told to licence one of her properties, and she did receive a licence. Had she checked the paperwork in detail, she might have noticed that the licence was for a different property, but in the event, she did not. Later in the year, the council noticed the second property was unlicensed and sent letters to the property about it. The tenant ultimately opened one of these letters and told the managing agent. The managing agent, in turn, asked the landlord about the property, and at that point, she checked the documents and realised she had applied for a licence for the wrong property. Upon discovering her error, she immediately sought and was granted a licence for the right property.
The council wrote to the tenants, informing them that the property was unlicensed and that they may be eligible for a Rent Repayment Order. The tenants applied for one, and the First-tier Tribunal granted a Rent Repayment Order. Neither party was represented, and by the landlord’s own account, she did not make her defence entirely clear.
Permission to appeal was granted, and the case went to the Upper Tribunal. The landlord again represented herself and gave her account more clearly, explaining the facts. The Upper Tribunal ultimately concluded that she did have a reasonable excuse defence and that as the offence had accordingly not been committed, no Rent Repayment Order could be made.
Although the landlord ultimately successfully established a reasonable excuse defence, it is important to note that the landlord genuinely believed she had applied for a licence for the right property and had good reason to believe this was the case. This was not a case of simple ignorance or error but one in which the council’s system was partly to blame. The landlord had taken steps to try to licence her property. As soon as the error was brought to the landlord’s attention, she applied for a licence.
Legal advice
This case highlights an important point about the value of legal advice in Rent Repayment Order proceedings. The Upper Tribunal noted in its judgment that the landlord had not explicitly referenced the defence of reasonable excuse at any point. The landlord was not legally represented and had not submitted a witness statement, which might have allowed her to explain her position clearly to the First-tier Tribunal. Had she been represented, a reasonable excuse would likely have been found by the First-tier Tribunal, making the appeal unnecessary and saving the time and stress the appeal entailed.
If you receive a notification about your property being unlicensed, it’s important to seek legal advice as soon as possible – a Rent Repayment Order application could be on the way. Send off an application for a licence and get in touch with a lawyer – they will be able to advise you on any defences you may have, and if you do not have a defence, to what extent you can argue that the amount claimed should be reduced.
How can we help?
Expert advice is the best way to determine if your property needs a licence or if you might have a reasonable excuse to defend a Rent Repayment Order sought against you. Freemans solicitors provide expert Rent Repayment Order advice, and our experienced team will be happy to help with your enquiry. Contact Michael Field, Karol Hart or Julian Hunt on 020 7935 3522 or hmolawyers@freemanssolicitors.net
We can advise on investigations, diversion from prosecution, prosecutions of HMO Offences and ancillary matters such as Rent Repayment Orders.
Whatever your personal circumstances the above is only a guide and we would advise you to contact us to obtain definitive advice as you will appreciate that each person’s circumstances are unique to them.