Landlord Wins Long-Running Rent-2-Rent Court Battle
The Supreme Court has ended a long-running case of tenants chasing a landlord of an unlicensed shared house for compensation through a rent repayment order.
The tenants finally ended legal recourse when Britain’s most senior court judges rejected their case.
The ruling in the case - Rakusen v Jepson  UKSC 9 - means a superior landlord is not liable for rent repayment order claims due to the failures of a rent-to-rent landlord.
The court battle started when Rakusen leased a London flat to Kensington Property Investment Group Ltd (KPIG) in May 2016.
KPIG sublet the flat as a house in multiple occupation to three tenants for a total rent of £2,297 a month but failed to licence the property.
In 2019, the tenants started proceedings for a £26,140 rent repayment order because Rakuten had not licenced the flat as an HMO, even though he had leased the home to KPIG, who arranged and managed the letting.
A series of tribunal and court cases followed, culminating at the Supreme Court.
“The Supreme Court unanimously dismisses the appeal. It holds that a Rent Repayment Order cannot be made against a superior landlord,” says the ruling.
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A landlord who has taken care to select a tenant by proper referencing and verification of suitability is unlikely to allow that chosen tenant to sublet, assign or transfer the tenancy to another without the landlord’s permission. In the past, tenancy agreements always tended to prohibit subletting or assignment.