Hugely important decision on Rent Repayment Orders

by | Jun 17, 2020 | Safer Renting

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For many, housing law is about as enthusing as the prospect of Cher making a new album, unless you are a Cher fan of course, or as in this case, a bit of a housing law geek.

So a document of 13 pages titled “Tribunals, Courts and Enforcement Act 2007” is unlikely to fill most people with the amount of joy that the case of Vadamalayan v. Stewart and Others did for me.

It came my way this morning via 2 sources who also couldn’t believe what they were reading.

Before I brighten your door let me put a frame around it.

Rent Repayment Orders, are the popular flavour of the month that allows a renter or a local authority to claim back 12 months worth of rent or benefit where the property was unlicensed or the landlord breached specific requirements of the Housing and Planning Act 2016.

Very simple idea but one of the biggest problems in practice has always been the decision in Parker v. Waller (2012) where the RPT president commented:-

“An RPT should have regard to the total amount that the landlord would have to pay by way of a fine and under an RRO. There may be a tension between the imposition of a fine and the making of an RRO”

The crude upshot of which means that a tribunal, when considering the size of an award on a RRO claim should be able to first knock off any money paid to the local authority in fines or penalties.

In Parker itself this wasn’t such a devastating decision. The fine was a little over £500 and the RRO award over £15,000, so I doubt that the applicant went home feeling they had been shafted by justice on the day but the principle of deducting fines and penalties before calculating an RRO award has sat there in the procedure ever since,  like Craggy Island’s Father Jack glowering in a convent.

Adding a massive and unwelcome air of uncertainty to the proceedings.

In one case in 2019 that Safer Renting assisted a tenant with, the judge looked ruefully at Sarah, our case worker and said “You should have made the application before the council imposed the penalty”.

Everyone in RRO world has been arguing that since the introduction of the Housing and Planning Act Parker was no longer good law but what we needed was an upper tribunal decision to do it.

Cue church bells across the land, ringing out in celebration not seen since VE Day in 1945 and welcome to the June 9th decision of Vadamalayan v. Stewart.

Some choice comments from the decision of Judge Elizabeth Cooke of the Upper Tribunal.

“it is difficult to see a reason for deducting either a fine or a financial penalty, given Parliament’s obvious intention that the landlord should be liable both (1) to pay a fine or civil penalty, and (2) to make a repayment of rent.”

“The arithmetical approach of adding up the landlord’s expenses and deducting them from the rent, with a view to ensuring that he repay only his profit, is not appropriate and not in accordance with the law”.

“However, as I said above, there is no longer any reason to limit the order to make it in effect a repayment of the landlord’s profits for the relevant period.”

And if anything even needed a bow tying around it, we find it in paragraph 14 of the judgement:-

“The rent repayment order is no longer tempered by a requirement of reasonableness; and it is not possible to find in the current statute any support for limiting the rent repayment order to the landlord’s profits. That principle should no longer be applied.”

I cant emphasise enough how important this decision is to the ability of renters to claim full, or at least nearly full, redress.

Fallon v. Wilson still remains in connection with culpability of renter and landlord but I can live with that, knowing Parker has been kicked into touch.

There will from now on be much more predictability to RRO applications.

We see a lot of referrals for RROs and everyone is very enthusiastic and keen, while we grimace and squirm, not wanting to rain on their parade but just to manage expectations.

Thanks to Vadamalayan we can smile back and who would have thought that the matter would be decided by a landlord appealing against the size of the award?

Life can be an ironic old stick

 By Ben Reeve-Lewis

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The Cambridge House Safer Renting team present the ‘go-to’ blog on the world of the Shadow Private Rented Sector.

We monitor the world of rogue landlord and agent activity, publicise developments, circulate innovative ideas, keep readers abreast of changes in laws and regulations, raising awareness of criminal trends and scams, celebrate successful actions and interview people working in the field, connecting up anyone involved, from tenants and their advisers, to enforcement officers, lawyers and journalists.

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