The First-tier Tribunal must have regard to the financial circumstances of a landlord as required by section 44(4)(b) of the Housing and Planning Act 2016 when determining the amount of a rent repayment order.
In Daff v Gyalui and another [2023] UKUT 134 (LC); [2023] PLSCS 99, the appellant landlord argued on appeal before the Upper Tribunal (Lands Chamber) that the FTT had failed to consider her financial circumstances when determining the amount of an RRO. Additionally, the FTT had also failed to consider whether she could retrospectively rely on an exemption from the licensing requirements obtained from the London Borough of Tower Hamlets.
The appellant was the long leaseholder of a flat situated in London E1. In 2014, she became seriously ill and was no longer able to work. The appellant moved back to her native Australia and let her flat through a letting agency.
In 2016, Tower Hamlets designated the area in which the flat was situated as being subject to selective licensing. The appellant and her agent claimed to be unaware of the designation.
In 2018, the appellant granted the respondents a tenancy while the flat remained unlicensed. The respondents subsequently applied to the FTT for a RRO on expiry of their tenancy. After receiving notice of the application, the appellant applied for a licence. She was now back living in the flat. The appellant was informed by Tower Hamlets that the flat was exempt from the licensing requirements because she was again occupying the flat as a home.
The FTT determined that the appellant could not avail herself of the defence of reasonable excuse. She admitted that she had received information from a landlord association advising her of the relevant changes in the law. Further, The FTT found that although the appellant’s flat was now exempt from the licensing requirements, the Housing Act 2004 made no provisions for retrospective exemptions. The FTT ordered the appellant to repay the respondents £22,300. In determining the amount to be repaid the FTT took into consideration that the appellant was a professional landlord. Further, her financial circumstances were unknown because she had made no financial disclosure.
It was common ground between the parties that the appellant had made some financial disclosure. The UT found that the FTT had failed to have regard to the same. If the FTT considered that further information was required as to the appellant’s financial circumstances, it should have adopted an inquisitorial approach and asked her questions. The UT reduced the RRO to £2,000.
In making the redetermination, the UT highlighted that the temptation to classify or caricature a landlord as “professional” or “amateur” should be avoided, especially if such a classification was taken to be a threshold for an entirely different level of penalty.
The UT found the FTT had not erred in its findings on the exemption.
Elizabeth Dwomoh is a barrister at Lamb Chambers
