Housing – Rent repayment order – Selective licensing – Reasonable excuse – Appellant landlords appealing against rent repayment order made following expiry of licence required by section 85 of Housing Act 2004 – Whether appellants having reasonable excuse under section 95(5) of 2004 Act – Appeal allowed
The appellants owned the freehold of Flat 54, Elgin House, 235 High Road, Chadwell Heath, Romford, Essex, which had been let to the respondents on an assured shorthold tenancy on 25 March 2019. The property and letting arrangements were managed for the landlords by AG.
The property was in an area designated as an area of selective licensing under Part III of the Housing Act 2004, and was required to be licensed under section 85 of that Act. The appellants held a licence for the property which expired at the end of August 2019.
In July 2020, the respondents opened a letter addressed to the appellants sent to their flat which was a final reminder from the local authority requiring the appellants to renew their licence. The appellants notified AG about the letter and the appellants applied for a licence.
Since the flat had been unlicensed since August 2019, the respondents made an application to the First-tier Tribunal (FTT) for a rent repayment order (RRO). The FTT was not satisfied that this was entirely a case of mere inadvertence, and found that the appellants, despite being aware that a licence was required, took no steps to renew it for nearly a year. Accordingly, the FTT made an RRO in the sum of £11,012, the whole of the rent paid for the 319 days during which an offence under section 95 of the 2004 Act was being committed.
The appellants appealed contending that the FTT appeared to have taken the view that it did not have discretion to award less than the maximum amount of the rent, and might have based its decision on an incomplete understanding of the facts.
Held: The appeal was allowed.
(1) The appellants argued on appeal that they had written to the local authority on 11 July 2019 asking for renewal paperwork, and were told by e-mail that a new online system was being set up but had heard nothing more. When AG made them aware of the situation, they applied for a licence for the property. However, they also owned a second property which did not require a licence. The online portal listed both properties and the appellants clicked on the “renew” button for the wrong property.
They subsequently received a receipt for the payment and a licence for the wrong property. When they realised the mistake, they applied on 16 July 2020 for a licence and paid a fresh fee. They received a refund for the licence fee paid on the other property in November 2021.
(2) A rent repayment order in the sum of £11,012 was a harsh penalty for clicking the wrong button. The FTT appeared not to have been aware of the explanation the appellants now gave, and could not have been aware of the refund of the erroneous payment because it was not refunded until long after the FTT hearing.
Had the FTT seen the local housing authority’s letter of 19 November 2021 concerning the refund, it must have taken a different view of the facts. It would have seen that a licence fee had been paid and that the appellants believed the licence had been renewed.
That crucial piece of evidence should be admitted on appeal. It could not have been obtained for use at the hearing before the FTT because it did not then exist. It would have had an important influence on the result of the case, because it would have clarified and confirmed the appellants’ evidence. And it was entirely credible because there was no reason to believe it was anything other than genuine: Ladd v Marshall [1954] 3 All ER 745 followed.
(3) As a result of admitting the evidence of the local housing authority’s email of 19 November 2021, it was clear that the FTT when it made its decision did so under a misapprehension as to a fact that was not only relevant but crucial. The decision would set aside in its entirety: not merely the decision as to the amount of the RRO but also the decision that the offence had been committed, even though that decision was taken on the basis of the appellants’ admission.
Although the appellants were in control of an unlicensed property from 1 September 2019 to 16 July 2020, the facts as now understood indicated that they had a defence of reasonable excuse to the offence under section 95 of the 2004 Act. They took every possible step to renew the licence. The website was unhelpful because it allowed renewal of a licence for a house that did not require one. The local authority took no steps to notify the appellants of their error but issued a licence and retained the fee in respect of a house that did not need a licence, and retained that fee for 26 months (for 16 of which it was holding two fees, having required a fresh payment for the appeal property in July 2020).
The appellants were not lawyers and had been unrepresented throughout these proceedings. They admitted the offence because they did not understand the significance of section 95(5) of the Housing Act 2004, and for the same reason did not appeal the finding that they had committed the offence. But had the FTT been aware of what had actually happened, as confirmed by the fresh evidence given on appeal, it would not have accepted that admission and would have considered whether the appellants had the defence of reasonable excuse. In the absence of consideration of the relevant facts by the FTT the decision to accept the admission was flawed.
(4) The relevant evidence was now before the tribunal and it was able to substitute its own decision rather than remitting the matter to the FTT. The appellants had the defence of reasonable excuse provided by section 95(5) of the 2004 Act and therefore did not commit the offence under section 95(1). There was no question of making a rent repayment order.
The appellants appeared in person; The respondents did not appear and were not represented.
Eileen O’Grady, barrister
Click here to read a transcript of Chow and another v Skipper and another
