A landlord has successfully overturned a rent repayment order after he argued he wasn’t responsible for an unlicensed HMO.
An Upper Tribunal heard that Amlendu Kumar granted a tenancy to Like Minded Living Ltd (LML) in a rent-to-rent arrangement, which had then granted sub-tenancies to five tenants at the property in Holdernesse Road, London – which didn’t have a licence.
In the landmark Rakusen v Jepsen case, the Supreme Court ruled that a rent repayment order can only be made against the tenant’s immediate landlord. However, LML had granted sub-tenancies for a term longer than the unexpired portion of the term of its own tenancy (that term ended in September 2019 and it had granted sub-tenancies for terms ending in 2020).
A First Tier Property Tribunal had said the tenants were direct tenants of Kumar and that he was a person in control of the property as he received the rack rent from LML and would have received the applicants’ rent if it were not for this arrangement.
Kumar appealed the £7,549 award (for 60% of rent paid by the tenants), arguing that he was not the landlord of the respondents and received no rent from them. He also argued that they had continued to pay rent to LML after September 2019, not to him.
The Upper Tribunal judge ruled he had let the whole property to an apparently reputable tenant on the recommendation of an agent whose judgment he trusted and had included a provision in the tenancy agreement that the property was not to be made available to more than four occupiers. The apparently reputable tenant had breached that provision without his knowledge while the landlord was abroad during the Covid lockdown.
Giles Peaker, property lawyer at Anthony Gold solicitors (right), says it’s likely that the upcoming Renters’ Rights Bill will overturn Rakusen v Jepsen and make superior landlords potentially liable for RROs. “The warning to property owners is do not fall for ‘rent-to-rent’ set ups without a lot of due diligence,” he adds.
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