The landlord told the First Tier Tribunal (FTT) that the superior landlord from whom he rented the property had mislead him as to whether the property had an appropriate licence and that, therefore, he had a reasonable excuse for not having applied for an HMO licence himself.

After dealing with some procedural matters pertaining to some of the tenants applying for the rent repayment order (RRO) who had, in the meantime, returned to their country of origin the FTT refused to agree with the landlord that he should not be made to pay the rent repayment order.

After deciding that the evidence, including that provided via Camden Council, showed that the respondent landlord had committed the offence of operating an unlicensed HMO the FTT went on to consider whether the defence of reasonable excuse applied in this case. It concluded that it didn't. The landlord had argued that "the superior landlord managing agent had unequivocally misinformed him as to the current licensing status of the property" but the FTT said that the respondent landlord had failed to take the proper steps to ensure that the property was licensed and pointed out that the respondent landlord was "a seasoned property professional. He has experience of other properties requiring HMO licences and was fully aware not only of the requirements but also how to check that those requirements had been met" and that he had "turned a blind eye" to the licensing requirements.

The FTT also, in considering the amount of the RRO, said that the case did not just involve a technical issue of failure to licence and that it was necessary to take into account the condition of the property (including a serious Ant infestation, poor quality kitchen and concerns over fire safety provisions. It thus set the RRO amount at 50% of the maximum (the landlord had asked for it to be set at 20% of the maximum if the Tribunal ordered him to pay it).

The respondent landlord also wanted the rent that he paid to the superior landlord to be deducted from the total amount of the RRO. The Tribunal disagreed with this saying that 1), the rent paid to the superior landlord did not fall into the categories of outgoings used to calculate the RRO amount and 2), "the purpose of the RRO is to incentivise landlords to licence properties. If this money was deducted from the RRO then there would be little incentive for the landlord to licence properties in the particular business arrangement [rent to rent] that [the respondent landlord] had entered into."

The full case transcript can be accessed here.

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