R. (on the application of Kalonga) v Croydon London Borough Council [2021] EWHC 2174 (Admin)

High Court, 4 August 2021

The High Court has held that a local housing authority has no power to accept a request for a review of a decision not to grant another tenancy on the expiry of a fixed-term secure flexible tenancy, if it is not requested within the 21-day statutory time limit as set out in sections 107D(3) and 107E of the Housing Act 1985.

A landlord (London Borough of Croydon) brought a claim for possession against a tenant (Ms Kalonga) who had held a flexible tenancy for a fixed term of five years. Two years into the term, and due to rent arrears and anti-social behaviour, the London Borough of Croydon served notice on Miss Kalonga, seeking termination of the tenancy and possession under the Housing Act 1985. However, Miss Kalonga argued that a flexible tenancy could only be terminated by forfeiture and that there was no forfeiture clause in her tenancy agreement. The High Court and the Court of Appeal found in favour of Ms Kalonga. See Capsticks’ Housing case-law update for February 2021 for details of these rulings. London Borough of Croydon has been given permission to appeal to the Supreme Court; this hearing is being heard on 12 January 2022.

In the meantime, Ms Kalonga’s fixed term came to an end and London Borough of Croydon served the requisite section 107D(3) Housing Act 1985 notice, stating its intention not to grant a further term. The notice was posted to Miss Kalonga, but she claimed that the notice did not come to her attention until after the 21-day deadline had expired because she had been away from the property for several weeks. She requested an extension of time, but London Borough of Croydon rejected the request, stating that it was made after the deadline had expired and it had no power to extend time for her to request a review under section 107E of the Housing Act 1985. Miss Kalonga sought a judicial review of the decision.

The High Court, in dismissing the application, held that a local housing authority has no power (or discretion) to accept a request for a review of its decision not to grant another tenancy term when the fixed term of the tenant's existing flexible tenancy expired, if that request is made more than 21 days after the service of a section 107D(3) notice. The language of section 107E of the Housing Act 1985 contains no express power to extend time. The High Court, however, has granted Miss Kalonga permission to appeal.

The decision confirms that local housing authorities are bound by the express power prescribed in section 107D of the Housing Act 1985. They have no power to accept out of time requests, but may still be subject to judicial review.

A copy of the judgment is here.

Rakusen v Jepsen & Ors [2021] EWCA Civ 1150

Court of Appeal, 29 July 2021

The Court of Appeal has held that an application for a rent repayment order by a tenant under the Housing and Planning Act 2016 can only be made against an immediate landlord of the applicant and not against a superior landlord.

The freeholder of a property granted a lease of a flat to Mr Rakusen. Mr Rakusen and his partner lived in the flat, but then decided to move and in 2016 let the flat to Kensington Property Investment Group Ltd (KPIG) for 36 months. KPIG entered into separate written licence agreements with Mr Jepson and two others (the respondents), each of whom was granted the right to occupy one room in the flat. However, by 2018, there were four people living in the flat, meaning it was now a house in multiple occupation (HMO) and was required to be licensed. However, no license was obtained by KPIG from the local housing authority.

In May 2019, KPIG’s tenancy ended and the respondents applied to the First-tier Tribunal (Property Chamber) for a Rent Repayment Order (RRO) against Mr Rakusen and his partner on the basis that he was in control of an unlicensed HMO. However, Mr Rakusen countered this by arguing that an RRO could only be made against the immediate landlord of the person who had made the application (and he was not the immediate landlord). The First Tier Tribunal struck out the application against his partner on the basis that there was no reasonable prospect of it succeeding. However, It refused to strike out the application against Mr Rakusen, as it considered that it was bound by the case, Goldsbrough v CA Property Management Ltd [2019] UKUT 311, which had determined that an application for an RRO could be made against a superior landlord despite the parties never having been in the either a landlord/tenant or licensor/licensee relationship. Mr Rakusen appealed. The Upper Tribunal (Lands Chamber) dismissed the appeal, finding that the First Tier Tribunal had jurisdiction to make an RRO against any landlord who had committed an offence, including a superior landlord. There was no additional requirement that the landlord be the immediate landlord of the tenant.

The Court of Appeal, in allowing the appeal, held that, as a matter of statutory interpretation, an RRO can only be made against an immediate landlord. It held that the term “landlord” was not defined in the Housing and Planning Act 2016, but that a “landlord” was usually viewed as being the immediate landlord of the tenant. The Court said that “if the intention had been to extend liability to superior landlords, it would have been easy for section 40(2)(a) of the Housing and Planning Act 2016 to say so…”

A copy of the judgment is here.

Ekweozoh v London Borough of Redbridge [2021] UKUT 180 (LC)

Upper Tribunal (Lands Chamber), 29 July 2021

The Upper Tribunal has held that a local authority should have complied with its policy of taking informal action against a landlord before imposing a financial penalty for the failure to obtain a licence for letting a property.

Ms Ekweozoh, who lived abroad, owned a flat which was let out to a tenant for a number of years and managed by a professional agent. The area in which the flat was located became the subject of a selective licensing scheme introduced by the local authority, the London Borough of Redbridge. The scheme required landlords to obtain a licence in order to lawfully let their premises. Ms Ekweozoh was unaware of the introduction of the scheme and the agent did not tell her, claiming that it was also unaware of the scheme. When the flat was let to another tenant without obtaining a licence, London Borough of Redbridge was finally able to successfully contact Ms Ekweozoh and she immediately obtained a five-year licence. However, London Borough of Redbridge served notice of its intention to issue Ms Ekweozoh with a £2,500 penalty for her failure to originally obtain a licence. Ms Ekweozoh appealed to the First Tier Tribunal, arguing that London Borough of Redbridge had not followed its own enforcement policy, whereby informal action (e.g. issuing a warning) would be taken before a financial penalty was imposed. However, this was dismissed, with the Tribunal ruling that informal action had already been taken (i.e. by attempting to contact her several times) and that the financial penalty was appropriate. Ms Ekweozoh appealed.

The Upper Tribunal (Lands Chamber), in allowing the appeal, held that London Borough of Redbridge’s unsuccessful attempts to contact Ms Ekweozoh were not relevant when assessing whether it was appropriate to deal with the offence through informal action rather than a financial penalty. The situation would have been different if Ms Ekweozoh had been aware of the need to obtain a licence and that London Borough of Redbridge had been trying to contact her. The financial penalty was set aside.

A copy of the judgment is here.

Almacantar Centre Point Nominee No.1 Ltd and another v CID Investments Ltd and others (2021) EW Misc 11 (CC)

County Court, 19 February 2021

The County Court has held that a Landlord, whose property was sub-let without authorisation, was not entitled to damages for breach of lease.

Almacantar Centre Point Nominee No.1 Ltd and Almacantar Centre Point Nominee No.2 Ltd (“The Claimants”) are two limited companies which are the joint freehold owners of the tower block, Centre Point, in London's West End. In 2004, the Claimants granted a long lease of a residential apartment in the tower to CID Investments Ltd. The lease contained covenants by the tenant:

In 2016 CID Investments Ltd granted a 24 month sub-tenancy to A.M.M. Properties Ltd, but did not seek prior written consent from the Claimants. The sub-lease prohibited any further sub-letting without consent; however, within 48 hours of entering into this sub-tenancy, A.M.M. Properties granted a sub-sub-tenancy of the apartment. No written consent had been sought or obtained from CID Investments Ltd to enter into this sub-sub-tenancy. Later, A.M.M. Properties sublet the apartment to another limited company, AGP Property Limited, despite having no authority to do so. AGP Property Limited then unlawfully sub-sublet the apartment to three individuals, who used the apartment for short-term lettings on Booking.com and other platforms.

The Claimants’ agents eventually discovered what was happening to the apartment and wrote to CID Investments, setting out the short let use. The Claimants applied for an interim injunction and sought damages.

The County Court held that there had been numerous breaches of lease, but that it was not an exceptional case that would merit disgorgement damages. The judge commented that “where a lease provides that a tenant is not to sublet without the landlord's prior consent, what measure of damages is the landlord entitled to recover from the tenant and/or any sub-tenants if the property, the subject of the lease, is sublet without its consent? The answer in the instant case is none.” Certain tenants that live in social housing may be committing a criminal offence if they sublet their home without their landlord's permission or by breaching their tenancy agreement. However, as this case did not involve social housing, the breach of lease is a contractual (rather than criminal) issue. Consequently, unless it was proved that the Landlord suffered clear financial losses, damages will not be awarded.

A copy of the judgment is here.

Aly and another v Wickham & Anor [2021] EW Misc 12 (CC)

County Court, 6 August 2021

The County Court has held that a fixed service charge was variable and falls within the definition of “service charge” under the Landlord and Tenant Act 1985.

The leaseholders each held a lease of a holiday lodge for 999 years. from 1 January 2003. Each lease contained covenants on the part of the Landlord to maintain the common parts of the estate, maintain communal facilities, provide communal services and maintain a refuse collection point. Each leaseholder had covenants to pay the rent and to pay for all electricity, gas and water. Under the terms of their leases, the leaseholders had to pay a service charge, being the greater of either:

• The sum of £250.00 per annum or, if greater, the sum of £250.00 per annum multiplied by the relevant retail price index (RPI) and divided by the amount of the RPI on 1 January 2003; or

• A sum of one-twentieth of the sum calculated in accordance with the fourth schedule of the lease (which provided a calculation of the service charge).

The Landlords based their service charge under the first option (£250 multiplied by the RPI). The leaseholders asked the County Court (Exeter) to determine whether the estimated service charge was caught by the definition of “service charge” under section 18(1) of the Landlord and Tenant Act 1985. The Court, however, held that the Landlord and Tenant Act 1985 did not apply and therefore the lease had a fixed rather than a variable service charge. The leaseholders appealed.

The County Court (Bristol), in allowing the appeal, held that section 18(1) of the Landlord and Tenant Act 1985 did apply, and that the Landlord could not charge a fixed sum, increasing each year by the increase in the RPI index regardless of the expenditure. The service charge may vary, depending on the costs.

A copy of the judgment is here.