Mr Awolaja owns a long lease of a flat in Camden, at some stage while living there he divided the rooms to create additional bedrooms and rented them out. Prior to him doing so Camden Council had introduced a requirement that where three of more people constituting two or more households live in a property it must be licensed. In August 2018 the appellant began to rent out the rooms and at the start of September 2018 the criteria above was reached so a HMO licence should have been obtained. Over the coming months more people moved in and rent was paid to the appellant.
However, the relationship became strained as the appellant became suspicious of the people who rented the rooms and he claimed they were spying on him. It subsequently transpired that at some point in time in 2018 the appellant was diagnosed with a delusional disorder. By July 2019 all bar one of the tenants had moved out. On 22 May 2019, Council Officers attended to conduct an inspection where it appears as though the appellant barricaded himself in the flat and refused access until it was forced by the police. On 14 June 2019, the council told the appellant that he had been operating an unlicensed HMO and that he should apply for a licence. The appellant then began to take steps towards that but seemingly not the correct steps. Then in September 2019, he was detained for his own safety under the Mental Health Act and was released in October 2019.
The factual and procedural history of the case is complicated; put simply the tenants applied for a rent repayment order as the appellant had been in breach of the HMO obligations. The FTT decided that the defence of insanity could not be made out as there was insufficient evidence and he had no reasonable excuse for not obtaining the appropriate licence. Ultimately, the UT disagreed and allowed the appeal and referred the matter to the FTT to further consider the defence of reasonable excuse and that the FTT would be able to rely on evidence not available at the first hearing.
The appellant on the face of it appears have been in breach of Section 72 Housing Act 2004 and while this is a strict liability issue meaning that intention to breach the section does not matter, there are potential defences. Of particular importance here is that a person can be seen to have a reasonable excuse for being in breach, or in this particular case the person is not guilty of an offence by reason of insanity.
Where a party breaches Section 72 they may face financial penalties outlined in S249A Housing Act 2004, one of which is a rent repayment order which is what the respondents were seeking in this case.
The final particular legal principle that was considered was the well-worn rules in Ladd v Marshall  1 WLR 1489 which concern the admittance of evidence on an appeal. There are three criteria that need to be considered. Firstly, could the evidence have been obtained with reasonable diligence, secondly, would the evidence have an important influence on the outcome and thirdly, is the evidence apparently credible. The judge was seemingly satisfied that the criteria were met in this case. So when the FTT reconsiders the defence they will have fuller evidence as to his mental state and medical issues.
How Birketts can help?
Birketts have a specialist Asset Management Team that are expert at providing advice to local authorities on a wide range of issues, including HMO licencing requirements. In addition, the Asset Management Team comprises leasehold litigation specialists who are experienced in making applications to the First-Tier Tribunal (Property Chamber) to correct any type of existing defects that our clients might already have within their leasehold stock and to deal with any issues arising out of tenants breaching lease provisions.
For further information on how Birketts can help, please contact Clive Adams or another member of the Social Housing Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at December 2021.