Landlords of commercial premises who allow property guardians into occupation, should familiarise themselves with the decision of the Upper Tribunal (Lands Chamber) in Global 100 Ltd v Jimenez and others [2022] UKUT 50 (LC); [2022] PLSCS 40.
The appellant, Global 100 Ltd, managed the Addison Lee Building situated in Euston, London. It was a five-storey commercial office building. The third floor was occupied by the respondents were all property guardians. Their floor comprised a suite of three offices with a communal bathroom on the adjoining landing.
Between June and December 2020 the respondent resided in the building, with others, under the terms of temporary licence agreements granted by the appellant. The respondents were required to ensure the building was protected. The respondents applied to the First-tier Tribunal for rent repayment orders to be made against the appellant, who managed the building, but had failed to licence the same.
The appellant argued that the RRO regime under chapter 4 of part 2 to the Housing and Planning Act 2016 did not apply because a housing-related offence had not been committed which the respondents could rely on. The appellant contended that the building was not an HMO because it did not satisfy the standard test under section 254(2) of the Housing Act 2004. The FTT disagreed and made an RRO in favour of the respondents in the sum of £6,251.85.
Section 254(2) of the 2004 Act provides a criteria that must be satisfied in full for a property to be classed as an HMO under the standard test. In essence, subsection (2) provides that the test will be met if: the property consists of one or more units of living accommodation which are not self-contained; the living accommodation is occupied by persons who do not form a single household; the property is occupied by those persons as their main residence; their occupation of it constitutes the only use of that accommodation; the occupiers pay rent or provide other consideration; and at least two of the households share basic amenities.
The appellant argued on appeal to the Upper Tribunal that the respondents’ occupation of the building as living accommodation did not constitute their only use of the building. Under the terms of their licence agreement, the respondents were required to provide property guardian services, which the appellant claimed was a complementary use of the building. Accordingly, the sole-use requirement in section 254(2)(d) was not met and the building was not an HMO.
The UT was unpersuaded by the appellant’s argument. The main issue was to identify the sort of shared property to which the statutory regime for securing the maintenance of proper housing standards should be applied. Part 2 of the 2004 Act was enacted to provide protection for residents of converted buildings with shared facilities by bringing them within a scheme of local authority oversight of their housing conditions. The parliamentary intention behind Part 2 of the 2004 Act was that the property sector to which that part 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.
The UT found that in any event the terms of the respondents’ licence agreements did not allow them to use the building for any purpose other than living accommodation. The requirement for them to carry out duties as property guardians was not a use of the building that was different from its use for residential occupation.
Elizabeth Dwomoh is a barrister at Lamb Chambers
