It is only right that landlords who let homes without having a required licence should be ordered to reimburse rent – but what if the tenants themselves have not behaved impeccably? The Court of Appeal considered that issue in a case where tenants of an unlicensed property had fallen into substantial rent arrears.
The case concerned a flat located in an area where a selective licensing regime was in force. The landlord, a company, let the property to tenants for about a year before complying with its obligation to obtain a licence. It thereby committed an offence under Section 95 of the Housing Act 2004 and its assertion that it was at the time unaware of the licensing requirement did not change that fact.
Following a hearing, the First-tier Tribunal (FTT) made a rent repayment order which required the company to reimburse £11,909 in rent to the tenants. That sum was half of the rent they had paid during the relevant period. In making that 50 per cent reduction, the FTT noted that the tenants had breached their paramount duty to pay rent in that substantial arrears had accrued prior to their vacation of the property. Their appeal to the Upper Tribunal was subsequently rejected.
Dismissing their challenge to that outcome, the Court found that the FTT was plainly entitled to have regard to the unexplained rent arrears when determining the amount of the rent repayment order. Also rejected was an argument that the tenants should have been reimbursed for a payment of £2,000 they made the day after the company applied for a licence, thereby ceasing to commit an offence.