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19/12/2021

Various notes – anniversaries, punishments, evictions and RROs.

A few notes on events and a couple of RRO cases.

Landlord Law, run by Tessa Shepperson, has achieved the remarkable feat of passing its 20th anniversary. That is really quite something for an online service – the online landscape was very different in 2001!. The site became an early membership site, but also provided legal information and tips through the blog which was (and remains) useful to all. Tessa has always taken a ‘plain english’ approach to explaining the law, even very complex law, and as well as providing a valued service for her members, has really been a model of public legal education in that regard.

Tessa has been a keen supporter of Nearly Legal from our earliest days a mere 15 and a half years ago, and very generously provides our web hosting for free, for which we are extremely grateful.

Until 24 December 2021, Landlord Law has a discount on membership, and five free ebook downloads, which you can find at this link. The ebooks are:

  1. Checking and Referencing Tenants
  2. Data Protection for Landlords
  3. Mandatory Inspections – EPC, Gas and Electricity
  4. Tenancy Agreements
  5. Using Section 21 and Section 8 Notices

In other news, and somewhat dramatically, DLUHC announced on Thursday that the Govt was banning Rydon Homes Ltd from access to Help to Buy. This was because of “concerns over unacceptable business practices in their company group” – specifically Rydon Maintenance Ltd, which carried out the Grenfell Tower refurbishment. Rydon has not emerged well from the Grenfell Inquiry (though apart from the residents and the fire fighters on the ground), no-one at all has emerged at all well from the Inquiry. (In the current phase, it is entirely possible that the Govt and civil service will also not be seen to have covered themselves in glory.)

This is an interesting step by Michael Gove, the Secretary of State, following on from his public criticism of the Mercedes F1/Kingspan sponsorship deal (which has since been ended) in view of Kingspan’s practices as revealed in the Inquiry.

Gove is quoted as saying

The development and construction industry should be in no doubt: I will continue to go after those who put lives at risk, are responsible for the building safety crisis and are failing to play their part in fixing it. The Grenfell community and innocent leaseholders deserve better.

This opens up the possibility of the Govt going beyond threats of ‘naming and shaming’ in respect of the cladding and fire safety crisis. Turning off the morphine pump of Help to Buy for developers who do not step up to remediate affected buildings would be a very interesting step indeed. That said, Help to Buy ends in March 2023, so maybe not that much of an incentive…

What there hasn’t been any announcement about is what was rumoured to be a suspension of evictions over the Christmas and New Year period. So, unless we end up in some kind of lock down again (looking increasingly likely, thanks Omicron), evictions will go ahead. (In England, anyway. In Wales, extended notice periods have just now been extended to 24 March 2022.)

A couple of Rent Repayment Order related notes, both of which I’ve been meaning to write up for ages. So, clearing the decks…

AA v Rodriguez & Ors (HOUSING – RENT REPAYMENT ORDERS – defence of “insanity”) (2021) UKUT 269 (LC)

The Upper Tribunal found that in making Rent Repayment Orders for an unlicensed HMO, the FTT had not had sufficient regard to medical evidence and evidence from social workers that strongly suggested the landlord was suffering from serious mental health issues which would mean that he did not know his conduct in operating an unlicensed HMO was unlawful. The FTT’s decision and approach was not consistent (having, for instance, reduced the RRO award by 30% by reason of the mental health issues, but not expressly considering reasonable excuse). It should have been clear, even without the further evidence subsequently provided, that the defence needed full consideration. Appeal allowed. (Justin Bates as pro bono counsel for the appellant.)

6 Bellamy Close, London W14 9UT – Ref ((Housing) Act 2004 and Housing and Planning Act 2016 – Rent repayment orders) (2021) UKFTT LON_00AN_HMF_2020_0061

I’m leaving this FTT decision here as one to read for your own entertainment. There are no great issues of law on this application for a Rent Repayment order for an unlicensed HMO (though it was decided before Rakusen v Jepson in the Court of Appeal, which might have made a small difference), but it is entertaining not only for the attempted subterfuge but the approach of the property owner, Ms Cabo:

Ms Cabo stated during the hearing that she did not want to know about property law, however we do not consider that this constitutes a reasonable excuse

In short, the property in West Kensington was owned by Ms Cabo (a self proclaimed handbag designer to bankers). It was let, long term, to 5 to 6 tenants via a management company, Top Holdings Ltd, which was owned by Ms Cabo’s ‘estranged’ husband, Mr Grasso, but the rent was paid to Ms Cabo’s brother (supposedly as an agent for Top Holdings, though not employed by TH), and a deposit was repaid by her ‘mentee’ in ‘Luxe Designers’, Ms Van Orden.

However, the tenants were given ‘holiday let’ agreements. Mr Grasso, who manages ‘airbnb’ lets, gave evidence saying

On the question of the terms of the letting, he indicated that in his view nobody wanted a six-month AST as they did not want the commitment. They could stay for as long as they liked. Asked about whether the Property should be licensed, he appeared to accept it was a borderline case, but he did not want that burden or the hassle and therefore did not wish to consider the Property was one for which a licence was necessary. In his view the management agreement obviated the necessity for an HMO licence.

Unfortunately, Mr Grasso had sent emails to prospective tenants stating

“The licence may sound like a “concentration camp” but please don’t get spooked by those draconian rules. Ultimately, I don’t live in the flat and I certainly do not want to interfere with your lives. I cater to young professionals like yourself who are mainly focussed on their careers and therefore need a peaceful and tranquil home where they can retire after a long day at work, a home where there is structured environment in place to avoid any potential disturbance.

I still want this flat to be your home where you must be comfortable and feel free to do whatever you want, still with the full respect towards your fellow tenants who will have the same respect towards you.”

And then Ms Cabo denied that she received any income from the rents at all, so was not managing or in control of the HMO. Despite her paying about £2000 per month in mortgage and council tax, she was apparently content for her ‘estranged’ husband to receive some £5000 per month in rent income under the management agreement and not see a penny of it. It did not help their case on estrangement that Mr Grasso and Ms Cabo gave video evidence from the same room (during lock down).

The upshot was an RRO made against Ms Cabo, but the whole is worth a read for the sense of judicial eyebrows being raised throughout and some very dry lines.

Oh, and as a parting note, Richard Davidoff (as ‘nominee director’ of the resident’s management company opposing this FTT RTM application) had rule 13 costs awarded against him (or rather, alas, the RMC) for unreasonable conduct of the matter. The decision is here. A sample of the findings:

It is also clear that the Respondent, through its sole director Mr Davidoff, used inappropriate tactics to try to prevent the leaseholders acquiring the right to manage and to pressurise them to drop their service charge application. The Respondent/Mr Davidoff then opposed the right to manage claim, despite seemingly not having any real grounds for doing so, and then objected to the FTT’s initial determination on the right to manage claim on the ground that the FTT had not acknowledged a request for an oral hearing only then to withdraw that objections once an oral hearing had been arranged.

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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