Housing – House in multiple occupation (HMO) – Rent repayment order – Redundant office building occupied by respondent “property guardians” – First-tier Tribunal holding property was HMO requiring licence and imposing rent repayment orders on appellant – Appellant appealing – Whether respondents’ occupation satisfying sole use condition in section 254(2)(d) of Housing Act 2004 – Appeal dismissed
The former Addison Lee Building at 35-37 William Road, Euston, London was a five-storey office building. The third floor, occupied by the respondents as “property guardians”, comprised a suite of three offices with a communal bathroom on the adjoining landing. At least one of the rooms was crammed with racking and cabinets which had previously held computer servers and was unusable as living space throughout the respondents’ occupation. Other guardians lived in different parts of the building. When the local authority’s housing officers inspected in November 2020, they reported that between 10 and 12 individuals were in residence.
The First-tier Tribunal (FTT) held that the building was a house in multiple occupation (HMO), and that it should have been licensed under Part 2 of the Housing Act 2004. Because it was not licensed the conduct of the appellant, which the FTT found was the person managing the building, amounted to an offence to which the rent repayment regime in Chapter 4 of Part 2 of the Housing and Planning Act 2016 applied.
On the application of the respondents, the FTT imposed rent repayment orders on the appellant requiring it to repay £6,251.85 which it had received in rent from the respondents between June and December 2020.
The appellant appealed. The issue was whether the former office building was occupied as an HMO, applying the standard test in section 254(2) of the 2004 Act because the “sole use” condition in section 254(2)(d) was not satisfied in the case of a property occupied by property guardians.
Held: The appeal was dismissed.
(1) This case was concerned with the use of the property itself, rather than with the legal rights and obligations between the occupiers and their landlords. It concerned the identification of the sort of shared property to which the statutory regime for securing the maintenance of proper housing standards should be applied. Whether the guardians were in rateable occupation of the building, or whether the guardians were tenants or licensees, had no relevance to the question whether the living accommodation was being used for more than one purpose. It would be anomalous if statutory protection from poor housing standards depended on the fine print in the contract between the person in control of the property and the occupier. There might be cases where the contract created a different type of relationship, such as employer and employee, but for the purpose of the sole use condition the focus, even then, would be on the use which was actually being made of the living accommodation: Southwark London Borough Council v Ludgate House Ltd [2020] EWCA Civ 1637; [2020] EGLR 3 and Global 100 Ltd v Laleva [2021] EWCA Civ 1835; [2022] EGLR 2 distinguished.
The statutory context was important in that regard. The purpose of the statute was to provide protection to the residents of converted buildings with shared facilities by bringing them within a scheme of local authority oversight of their housing conditions. That purpose was for the public good as well as for the protection of the individual occupiers and one would expect parliament to have intended that the property sector to which Part 2 of the 2004 Act applied should be defined by the character and use of the property in question and not by the terms of the relationship between the parties to the relevant occupational contract. A policy of extending protection widely rather than confining it narrowly was also consistent with the statutory presumption that the sole use condition was to be taken to be satisfied unless the contrary was demonstrated.
(2) In any event, it could not be said that the licence agreement provided for more than one use of the living accommodation occupied by the respondents. As guardians, they were required to sleep on the premises for at least five out of seven nights, they were not permitted to leave the property empty, and they were to inform the appellant of any damage or unauthorised access. But they were not permitted to conduct a business or hold meetings on the premises, and the only thing the respondents were entitled to do with the living accommodation was to use it as their main residence. The agreement did not provide for anyone else to be able to do anything in the living accommodation, except other guardians could be permitted to share its use for the same purpose.
The building itself could not be said to have been put to more than one use. As a matter of ordinary language, one would not say that the function of the guardians in deterring damage or trespass was a second use, additional to their use of the building as living accommodation. To a large extent the services performed by the guardians were the consequence or byproduct of their use of the building as living accommodation. It was their presence in the building which was intended to deter vandalism and theft, and which made it a criminal offence for squatters to enter.
(3) The statutory purpose underlying the sole use condition was not immediately obvious. The presumption of sole use in section 260 of the 2004 Act and the power of a local housing authority effectively to disapply the sole use condition by making an HMO declaration under section 255 suggested a desire to limit the practical significance of the condition.
If the occupation of living accommodation as the main residence of the occupiers was not the only use of that living accommodation, because some additional and different use was also being made of it, then it was possible to see that policy reasons might justify excluding it from the scope of Part 2. But there was no reason to exclude such accommodation where the suggested additional use was, in substance, the same only or main residential use by the same persons but for a distinct purpose.
A redundant office building with no cooking facilities except those provided by, and shared between, the occupiers and no bathroom facilities other than those appropriate to an office and again shared by the occupiers, was the sort of premises which would benefit from the statutory control provided by Part 2 of the 2004 Act.
Sean Pettit (instructed by Kelly Owen Ltd) appeared for the appellant; The respondents appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of Global 100 Ltd v Jiminez and others
