Global 100 Ltd v Ross & Ors (HOUSING – Rent Repayment Order – para. 2 Sch 14 Housing Act 2004 – s.263(3)(b) Housing Act 2004 – HMO – “person managing” – “arrangement” – “by virtue of which”) (2025) UKUT 264 (LC)

This was Global 100’s appeal of a rent repayment order made by the First Tier Tribunal for a failure to licence a property. The property was owned by London Borough of Haringey. In 2013, Haringey had entered an agreement with Global Guardians Management Ltd (GGM) under which GGM could use the property for occupation by property guardians, for a payment by GGM of £980 per month. GGM then granted Global 100 Ltd (G 100) permission to grant licences to live-in guardians. G 100 did so, including, eventually, for the current respondents. The guardians paid a weekly fee to G 100.

Some of the guardians had applied for an RRO on the basis that G 100 had control of or where managing an HMO which required a licence, but wasn’t licensed. The FTT made the rent repayment order.

Section 263 Housing Act 2004 provides

(1) In this Act “person having control”, in relation to premises, means (unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent.

(2) In subsection (1) “rack-rent” means a rent which is not less than two-thirds of the full net annual value of the premises.

(3) In this Act “person managing” means, in relation to premises, the person who, being an owner or lessee of the premises–

(a) receives (whether directly or through an agent or trustee) rents or other payments from–

(i) in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises; and

(ii) in the case of a house to which Part 3 applies (see section 79(2)), persons who are in occupation as tenants or licensees of parts of the premises, or of the whole of the premises; or

(b) would so receive those rents or other payments but for having entered into an arrangement (whether in pursuance of a court order or otherwise) with another person who is not an owner or lessee of the premises by virtue of which that other person receives the rents or other payments;

and includes, where those rents or other payments are received through another person as agent or trustee, that other person…

G 100 appealed on the basis that the property did not require licensing because the local authority was a person ‘having control of or managing a property’ so the property was exempt from the licensing requirement.

Before the Upper Tribunal, G 100 did not seek to argue that the local authority was a person ‘having control’

because of the decision of the Tribunal in the case of Cottam v Lowe Management Ltd (2023) UKUT 306 (LC), where it was held (paras 48 and 49) that a freeholder who has let property at less than a rack-rent cannot be a person in control, as they are not a person who could, if they chose, grant a lease at a rack-rent.

However, G 100 argued that s.263(3)(b) applied – an arrangement with another person by virtue of which the other person receives the rents.

The FTT had accepted that GGM was not an owner of the property (not having a lease), and that, but for the agreement, the local authority would have received rent from occupiers,  but held that the agreement between GGM and Haringey was not one by which GGM received the rents.

On appeal G 100 argued that the FTT should have considered the whole of the arrangement between Haringey, GGM and G 100. Although no evidence was provided as to money from the occupiers going to GGM from G 100, the FTT could and should have inferred that at least the £980 monthly payments that GGM made to Haringey had come from the occupiers’ rents.

The Upper Tribunal upheld the RRO.

The FTT had rightly considered the agreement between GGM and Haringey as ‘the arrangement’.

There was no evidence at all of any wider arrangement, beyond the agreement, by virtue of which GGM might have received rents or other payments made by the occupiers.  Considering the wider business model, as proposed by the appellant, would not have founded an inference of such an arrangement outside or including the agreement.  The FTT was of course aware that that GGM and the appellant were in business and that money passed from GGM to the local housing authority under the agreement (the £980/month) and that it must have come from somewhere.  But there was no evidential basis for an inference that it came from the respondents; or that it did so by virtue of an arrangement into which the local housing authority had entered.  Assuming money was indeed received by GGM, it may have come from other parties than the appellant with which it did business or had a relationship, or from other occupiers, including other occupiers of other properties; or from its own general mixed funds to which various sources might have contributed.  There was no evidential basis upon which the moneys paid by the occupants might have been traced through to GGM. 

Comment

To come undone on an RRO on the basis of your own intra-company arrangements is… unfortunate. Having one company enter the agreement with the local authority, but another company receive the rents from the property may have some other purpose, but here left G 100 libale for licensing and the RROs for failure to do so.