The property came within the council's additional licensing scheme but did not have a licence and "the only evidence provided by the [landlord] was a two-page witness statement" in which he said he shared the accommodation with the other occupants. He also did not attend the hearing.

But, and more importantly for the First Tier Tribunal (FTT), the landlord stated that the tenancy agreements of the occupants were not with him but with a company called KJSZ Ltd and that he never received any rent or fees from the tenants. The FTT said "It appears, therefore, that his case is that, by virtue of the decision in Rakusen the Tribunal has no power to make an order against him."

Rakusen v Jepson & Ors was decided by the Supreme Court recently and means that rent repayment orders (RROs) can only be made against an immediate landlord and not against a superior landlord - a landlord to landlord relationship seen in so called "rent to rent" arrangements.

The FFT said that the fact that one of the occupants of a residential property is a residential landlord "does not of itself have any bearing on the need, or otherwise, for that property to be licensed." and went on to say that it did not accept the landlord's "assertion" that he was "the primary resident" of the property. The tenants' evidence that the landlord did not live at the property was accepted as "clear, cogent and credible".

The agreements submitted in evidence by the tenants referenced the landlord as both the "householder" and the landlord though they also "purported" to have been signed on behalf of KJSZ Ltd and rent was to be paid to that company. The FTT said that "on the face of the documents themselves the Respondent is that Applicants' landlord and KJSZ Ltd receive the rent on his behalf" and that the landlord did not provide any evidence that he'd created a leasehold interest in favour of KJSZ Ltd.

The Tribunal decided that the landlord was a person managing the property though there was insufficient evidence to show that he was a person in control of the property. It concluded that the Respondent was the immediate landlord for the purposes of the decision in Rakusen and thus it did have the jurisdiction to make an RRO against him.

In calculating the amount of the order the FTT took into account Universal Credit and Utility deductions and then looked at the seriousness of the offence. It set the starting point of the RRO level at 60% of the possible total but then concluded that the landlord had, in effect, entered into "sham agreements" with the tenants as he was not in fact living at the property though the agreements purported to say that the tenants were lodgers. This would have the "potential effect of depriving the Applicants of the legal rights afforded to tenants and amounted to reprehensible conduct by the Respondent". It thus increased the RRO level at 70% of the possible total rather than 60%.

The full case transcript can be accessed here.

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