Case Update: Rakusen v Jepsen & Ors [2021] EWCA Civ 1150 (29 July 2021)

Rent Repayment Orders were created by the Housing Act 2004 and modified in 2016 with the Housing and Planning Act 2016.

It concerns cases, where the landlord has either been convicted of a relevant housing offence or, notwithstanding the absence of a conviction, an offence, beyond all reasonable doubt, has been committed.

If the answer to either of these questions is in the affirmative then the First-tier Tribunal can order up to 12 months rent to be repaid to the tenant.

Where the offence was either (a) wholly committed before 6 April 2017 or (b) the commission of the offence started before 6 April 2017 and ended no later than 5 April 2018, the provisions in the Housing Act 2004 continue to apply. Any receipt from a rent repayment order made under these transitional arrangements should be applied in accordance with the Rent Repayment Orders (Supplementary Provisions) (England) Regulations 2007 Where the offence was wholly committed on or after 6 April 2017, the provisions in the Housing and Planning Act 2016 will apply and this guidance should be used. These powers are not retrospective and will not apply to offences committed before the aforesaid dates.

Repayment orders have been extended to cover the following situations:

a. Failure to comply with an Improvement Notice under section 30 of the Housing Act 2004;

b. Failure to comply with a Prohibition Order under section 32 of the Housing Act 2004;

c. Breach of a banning order made under section 21 of the Housing and Planning Act 2016;

d. Using violence to secure entry to a property under section 6 of the Criminal Law Act 1977;

e. Illegal eviction or harassment of the occupiers of a property under section 1 of the Protection from Eviction Act 1977;

f. Being in control or managing an unlicensed HMO or property that is unlicensed

A rent repayment order can be applied for when the landlord has committed an offence, whether or not a landlord has been convicted of one of the offences listed aforesaid.

The First-tier Tribunal will only consider making an order for a local authority if the offence falls within the local authority's boundaries, and the landlord has already received a 'notice intending proceedings' setting out that they have not less than 28 days within which he or she is to make representations for consideration. If this notice period has not expired then the local authority may not apply for the rent repayment order.

Tenants can also apply directly to the First-tier Tribunal for a rent repayment order. The tenant must have lived in the property within the preceding 12 months and the offence must have happened in that time.

What has been a question raised in the courts recently is whether a Rent Repayment Order can be sought against the immediate landlord or can and/or should one pursue to the head landlord?

Back in 2019 in Goldsborough v CA Property Management Ltd and Mrs and Mrs Gardener [2019] UKUT 311 (LC), the Upper Tribunal concluded that under the 2016 Act, a Rent Repayment Order can be made against “a landlord”. On the face of it, it would appear that this includes and is not limited to the immediate landlord.

The Court of Appeal, meanwhile, concluded that the usual meaning of “landlord” means the immediate landlord and not head landlord for the purposes of this legislation. In reaching this conclusion, the Court of Appeal did consider the policy reasons for the Rent Repayment regime but chose natural interpretation over legislative purpose or intentions. The crucial part of the legislation that came to be determined was section 40(2) of the 2016 Act.

Section 40 provides:

“(1) This Chapter confers power on the First-tier Tribunal to make a rent repayment order where a landlord has committed an offence to which this Chapter applies.

(2) A rent repayment order is an order requiring the landlord under a tenancy of housing in England to—

(a) repay an amount of rent paid by a tenant, or

(b) pay a local housing authority an amount in respect of a relevant award of universal credit paid (to any person) in respect of rent under the tenancy.”

Landlord is not defined in the 2016 Act so the natural interpretation of section 40(2) was:

“that the landlord under a tenancy of housing” in the body of subsection (2) must refer to the landlord under the same tenancy as the tenancy held by the “tenant” referred to in paragraph (a). Only one tenancy was referred to, and it was that tenancy which enabled identification of both the tenant who could apply for an RRO and the landlord who could be made the respondent to that application. Otherwise, any tenant in a chain of tenancies could apply against any landlord in the chain.” [23]

“The absence of any express limitation to an immediate landlord is immaterial, because the language used connotes a direct relationship of landlord and tenant.” [25]

It is irrelevant that the offences could have been committed by a superior landlord.