Rakusen v Jepsen & Ors

Factual and Procedural Background

The Appellants were occupiers of a flat in The City. They paid licence fees to Company A, which in turn held a short-term tenancy from the Respondent, the long-leaseholder of the property. The flat was an unlicensed house in multiple occupation. Alleging that the Respondent had committed the offence of controlling or managing an unlicensed HMO, the Appellants applied to the First-tier Tribunal (FtT) under section 41 of the Housing and Planning Act 2016 for Rent Repayment Orders (RROs) totalling £26,140.

The FtT struck out the claim against a co-owner but, following Goldsbrough v CA Property Management Ltd, refused to strike out the claim against the Respondent, holding that an RRO could be made against a superior landlord. The Upper Tribunal affirmed that view. The Court of Appeal reversed, holding that only the immediate landlord may be the subject of an RRO. The Appellants appealed to the Supreme Court.

Legal Issues Presented

1. Does Chapter 4 of Part 2 of the Housing and Planning Act 2016 empower the First-tier Tribunal to make a Rent Repayment Order against a superior landlord, or is the remedy confined to the immediate landlord under the tenancy that generated the rent in question?

Arguments of the Parties

Appellants’ Arguments

• Section 40(2) should be interpreted to include superior landlords; the phrase “landlord under a tenancy” is capable of covering any landlord in the chain of title.
• Limiting RROs to immediate landlords undermines the statutory purpose of deterring rogue landlords, because superior landlords can avoid liability by interposing asset-light intermediaries.
• The distinction between “repay” and “pay” in section 40(2) is immaterial; the statute uses the terms interchangeably elsewhere.

Respondent’s Arguments

• The natural meaning of “landlord under a tenancy” refers only to the grantor of the particular tenancy that generated the rent; a superior landlord is not “the landlord under” that tenancy.
• Textual cues such as the word “repay” in section 40(2)(a) presuppose a direct receipt of rent, which a superior landlord lacks.
• Expanding RROs to superior landlords would create practical and computational complexities and would conflict with the principle against doubtful penalisation.

Table of Precedents Cited

Court's Reasoning and Analysis

The Supreme Court focused on the wording of section 40(2) of the 2016 Act. The phrase “landlord under a tenancy of housing in England” was held to denote only the grantor of the tenancy that produced the rent sought to be recovered. Reading sub-paragraphs (a) and (b) together, the Court found a tight textual link between: (i) the landlord; (ii) the particular tenancy; and (iii) the rent or universal credit attributable to that tenancy. A superior landlord, who neither granted that tenancy nor received the rent, falls outside the statutory description.

Additional contextual factors supported this view:

• The predecessor regime in the Housing Act 2004 confined RROs to immediate landlords, and nothing in the legislative history indicated an intention to widen that class.
• While the purpose of RROs is to sanction rogue landlords, Parliament limited the sanction to those directly receiving rent; other enforcement tools (criminal prosecution, civil penalties, banning orders, rogue-landlord database) address superior landlords.
• Including superior landlords would create serious computational and procedural complexities, especially in multi-layered tenancy chains.
• Other statutory provisions explicitly extend “landlord” to “superior landlord” when intended (e.g., Protection from Eviction Act 1977), a drafting technique not used in section 40.
• The pre-legislative materials and explanatory notes consistently described RROs as requiring repayment of rent “paid to the landlord,” reinforcing a direct relationship.
• The principle against doubtful penalisation favoured a narrow construction where any ambiguity existed.

Collectively, these factors confirmed the Court’s “straightforward interpretation” that section 40(2) does not authorise RROs against superior landlords.

Holding and Implications

Appeal DISMISSED. The Supreme Court held that Rent Repayment Orders under Chapter 4 of Part 2 of the Housing and Planning Act 2016 can be made only against the immediate landlord under the tenancy that generated the rent or universal credit concerned; they cannot be made against a superior landlord.

Practical consequence: the Appellants’ claim for RROs against the Respondent fails. Broader implications are limited to clarifying the reach of section 40(2); any extension of RRO liability to superior landlords would require legislative amendment rather than judicial interpretation.