Rent repayment order
Rakusen v Jepsen
Mr Rakusen was the leaseholder for a flat. On 31 May 2016 Mr Rakusen let the property to Kensington Property Investment Group Ltd on the basis they would rent the property, which created a rent to rent agreement. There was no house of multiple occupancy (HMO) licence for the property.
Kensington Property Investment Group Ltd (KPIG) let the property to three individuals on separate agreements which created an HMO and a licence was required. At the end of their lease KPIG handed the property back to Mr Rakusen who became the immediate landlord of the then tenants. As there was no HMO licence all three tenants applied for a rent repayment order against the superior landlord Mr Rakusen to the sum of £26,140.
The First-tier Tribunal (FTT) found against Mr Rakusen but granted permission for an appeal. The Upper Tribunal confirmed a superior landlord could be required to make a rent repayment order as the landlord does not necessarily need to be the landlord who is in receipt of the direct rent payment. It all hinged on the use of the phrase “a landlord”, rather than the more specific “the landlord” .
However, there was an appeal in July 2021, which went in favour of the superior landlord. This was because there was one tenancy being referred to. If the local authority sought a repayment to Universal Credit it could only be against “the landlord” so it made no sense to interpret the claim by the tenant as against anyone other than “the landlord”. It uses the wording “a landlord” because there are many private landlords but the claim could only be against the immediate landlord. The landlord was, at the material time, Kensington Property Investment Group Ltd.
Please see below the court of appeal decision
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