Was there a reason to award less than the full rent?

An appellant appealed to the Upper Tribunal from the decision of the First-tier Tribunal (FTT) saying that the amount awarded in relation to rent paid was too low.

In the case of Chung Pui Chan v Harminder Singh Bilkhu & Kawaljit Bilkhu, the appeal had to succeed because the law had changed since the FTT made its decision, so the amount of rent repaid had to increase.

The appellant had an assured shorthold tenancy of 267 St George’s Road, Coventry, from 1 July 2018 for 12 months, and lived there with four others in four households.

The FTT found that, throughout the 12 months of the tenancy, the property was a house in multiple occupation (HMO) which should have been licensed but was not actually licensed, and that therefore the offence in section 72(1) of the Housing Act 2004 was committed throughout the year in which the appellant was a tenant.

The FTT found that the appellant had paid £4,482.50 in rent during the 12 months he stayed at the property, and it made an order in the sum of £1,494.17 which it said represented one-third of the rental profit. The appellant appealed on the basis that the order made was inappropriate.

The law had changed in 2016 and the FTT’s practice of routinely deducting amounts that the landlord is paying in order to preserve his own property, such as mortgage payments, or that the landlord is obliged to make in any event under the terms of the lease, was no longer appropriate. The amount ordered to be repaid should be based on the rent paid, not the landlord’s rental profit.

The Tribunal also found however that for one quarter of the tenancy, the house was not a licensable HMO. Only when the regulations changed on 1 October 2018 did it become licensable. The Upper Tribunal said that there would appear to have been a mistake of law on the part of the FTT, which noted the change in the regulations but did not consider its application in this case.

The Upper Tribunal therefore determined that the rent to be repaid was three-quarters of the rent for the year, which amounted to £3,361.87. Subtracting the sum already paid in accordance with the FTT’s order, the respondents were ordered to pay the balance of £1,867.70.