Goldsbrough & Anor v CA Property Management Ltd & Ors (HOUSING � HOUSE IN MULTIPLE OCCUPATION)

Factual and Procedural Background

The appeal concerns two applications for rent repayment orders (RROs) under section 43 of the Housing and Planning Act 2016, relating to a property at 24 Cowper Gardens, The City. The first appellant is tenant of Room 4 and the second appellant tenant of Room 3. The First-tier Tribunal (FTT) had designated Company A as the correct respondent to both applications. The appellants dispute this, arguing that the freeholders of the property, Mr and Mrs Gardner, should be the respondents—either alongside Company A or instead of it.

The property is a converted five-bedroom house owned by the freeholders who purchased it on 2 November 2017. On 7 November 2017, the freeholders leased the entire property for five years to Company A, which then granted assured shorthold tenancies to the appellants for individual rooms. The appellants applied for RROs on grounds including occupation and control of an unlicensed house in multiple occupation (HMO) and harassment/illegal eviction. The FTT held Company A to be the correct respondent, and this decision is under appeal.

Legal Issues Presented

1. Who is the correct respondent to an application for a rent repayment order under section 43 of the Housing and Planning Act 2016 in relation to an unlicensed HMO: the freeholders or the intermediate lessee (Company A)?
2. Whether the definition of "landlord" under the 2016 Act includes the freeholders or is limited to the immediate landlord granting the tenancy to the appellants.

Arguments of the Parties

Appellants' Arguments

• The correct respondent to the RRO application for failure to obtain an HMO licence is the freeholders, not Company A.
• The freeholders receive the rent passed on by Company A and thus qualify as the "appropriate person" under the 2004 Act.
• Company A acts as a managing agent rather than landlord, lacking sufficient control to obtain an HMO licence.
• If Company A alone is the respondent, the freeholders could evade responsibility, undermining the policy objective of the 2016 Act to address rogue landlords.
• They rely on government guidance stating that RROs can only be sought against landlords entitled to keep the rent, not managing agents.
• They cite a prior First-tier Tribunal decision where the freeholder was designated the respondent instead of the managing agent.

Respondents' Arguments

• Company A contended it was the appropriate respondent, paying rent to the freeholders without remission and not holding rents on trust for them.
• Company A denied being the freeholders' agent.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the statutory framework under the Housing and Planning Act 2016 and the Housing Act 2004. It noted that the 2016 Act does not define "landlord" by importing definitions from the 2004 Act, and the offences triggering RROs are broader than those in the 2004 Act. The court reasoned that the 2016 Act’s different wording was deliberate and simpler, requiring only that the person be a landlord who has committed an offence.

The court agreed with the FTT that Company A holds the reversion to the appellants' tenancies and granted those tenancies, making it a landlord. However, it rejected the FTT’s limitation that only the immediate landlord could be liable for an RRO. The court found no statutory basis for restricting liability to the immediate landlord and noted that the appellants may pursue the freeholders as landlords if they prove they committed the offence.

The court observed that the appellants' applications named the freeholders as respondents for the licensing offence, and it would be for the appellants to prove their liability at the substantive hearing. The court acknowledged the risk that a freeholder could avoid liability by leasing to an intermediate landlord not in control or managing the property, but made no finding on whether this occurred here.

Consequently, the court set aside the FTT’s decision and substituted its own, determining that the freeholders are the appropriate respondents for the licensing offence, while Company A remains the respondent for the harassment offence.

Holding and Implications

The appeal is allowed in part. The court held that for the purposes of a rent repayment order relating to an unlicensed HMO offence under the 2016 Act, the freeholders are the correct respondents rather than the intermediate lessee. Company A remains respondent only in relation to the harassment offence.

The decision clarifies that the 2016 Act’s definition of landlord does not restrict RRO liability to the immediate landlord and does not incorporate the 2004 Act’s concept of "appropriate person." This has the direct effect of allowing tenants to target freeholders in RRO applications even where tenancies are granted by intermediate lessees. The court noted no broader precedent was established beyond the facts of this case.