Property investors frequently delegate day-to-day managerial duties in respect of their portfolios to others. However, as a guideline case concerning an unlicensed house in multiple occupation (HMO) showed, such arrangements are unlikely to absolve them from legal responsibility.
The case concerned a house that had been used as an HMO in that it had been let to five or more tenants comprising two or more households. It was not licensed as required and seven former tenants launched proceedings, seeking a rent repayment order under the Housing and Planning Act 2016. The First-tier Tribunal upheld their application and ordered the owner of the property’s freehold to reimburse the rent they had paid over a 12-month period, a total of £45,043.
In challenging that decision, the freeholder asserted that she was not the property’s landlord. For about two years, the house had been let to a company under a lease which identified her husband as the landlord. The company, which later went into liquidation, sublet the property to the tenants. The freeholder contended that she had no control over the property during that period.
In rejecting her appeal, however, the Upper Tribunal found that she was rightly viewed as the property’s landlord for the purposes of the tenants’ application. Although the terms of the lease placed the usual responsibilities of a landlord on her husband, he had acted as her agent, managing the tenancies and receiving rent on her behalf. In order to make a rent repayment order, there was no requirement that the freeholder had to be the tenants’ immediate landlord.
* Irvine v Metcalfe & Ors. Case Number: RRO/12/2020