Tribunal Clarifies Letting Agent's Liability in Unlicensed HMO

A tribunal judge has clarified whether agents letting rooms in an unlicensed shared house commit an offence.

The decision by Upper Tribunal Judge Martin Rodger KC could unlock a flood of appeals from letting agents wrongly penalised for finding tenants for landlords with unlicensed houses in multiple occupation (HMO).

Epping Forest District Council had fined director Kartal Cetin and his company, Discover Residential Ltd, £7,064 for letting two rooms to tenants in an illegal HMO in Loughton, Essex.

The HMO comprised rooms above a shop.

Cetin appealed the council's civil penalty to the First-Tier Property Tribunal, which decided he was involved in managing the property but reduced the fine by half to £3,532.

No offence

Cetin again appealed the ruling, this time to the Upper Tribunal, where Judge Roger heard that Cetin worked on let-only terms for the HMO owner and was not involved in the management of the property. Cetin argued this meant he could not have committed the offence and should not have been fined.

The judge agreed that paying an agent whose only function is to let the property and who then had no involvement in the continuing management, was not a payment under the scope of the law.

"The purpose of the definition is not served by including an agent who has nothing to do with continuing management. The imposition of the statutory obligations on such a person in addition to the owner would be redundant and might even be counterproductive. It would create ambiguity as it would be difficult to know for how long the status would continue after the single transaction which created it."

The appeal was allowed, and the financial penalty was set aside.

Read the full judgement - Kartal Cetin v Epping Forest District Council

Rent refund loophole lets landlord sidestep justice

A tenant claims landlords are taking advantage of students who must pay rent in advance thanks to a legal loophole.

Tenant Carl Pearton has told the Upper Tribunal that he was one of three students who paid £8,000 rent before moving into a shared flat in Betterton Street, West London.

The £8,000 represented six months' rent in advance for the flat paid on July 20, 2022. A tenancy agreement was signed the day before, but the students did not move in until July 22. The students left on January 21, 2023.

The First-Tier Tribunal agreed the flat was an unlicensed HMO, but decided not to make a rent repayment order because the offence technically took place between July 22, 2022, and January 21, 2023.

Tribunal judge Elizabeth Cooke explained the money was paid before the offence was committed, so no rent repayment order could be made.

She said: " The tenants were required to pay the rent in advance and that that has allowed the landlord to sidestep justice; the principle opens a loophole for landlords to which students are particularly vulnerable because they generally have to pay in advance."

Read the full judgment - Carl Pearton v Betterton Duplex Ltd