Introduction to Rent Repayment Orders: Guide for Landlords and Property Agents

This is part one of a three part series on rent repayment orders discussing the basis of rent repayment orders and when an application can be made against a private landlord.

 What are they?

Rent Repayment Orders were first introduced under the Housing Act 2004 to cover property licensing offences. However, they have now been widened under Part 2 of the Housing and Planning Act 2016 (“the Act”) to include a broader range of offences under the Criminal Law Act 1977, Protection from Eviction Act 1977, Housing Act 2004 and the Housing and Planning Act 2016.

An application for a rent repayment order can be made to the First Tier Tribunal (Property Chamber) by a tenant or a local authority against a private residential landlord for the repayment of rent if a landlord has committed any of the relevant property offences stated below.

What can be sought?

Tenants can ask the Tribunal to make an order against a landlord for the repayment of rent paid.

If a tenant paid rent through welfare benefits, a local authority can seek an order for repayment of Housing Benefit or Universal Credit paid to the landlord. In addition, where a tenant partially paid rent from their own resources and the remainder was paid through benefits, then the Tribunal can order the landlord to repay the sums collected to the local authority and the tenant.

When can an application be made?

An applicant must demonstrate that the landlord committed any one of the following criminal offences:

• Violent entry of premises under the Criminal Law Act 1977
• Unlawful eviction and harassment under the Protection from Eviction Act 1977
• Failure to comply with improvement notice under the Housing Act 2004
• Failure to comply with a prohibition order under the Housing Act 2004
• Failure to license a HMO or house under the Housing Act 2004
• Breach of a banning order under the HPA 2016

This applies equally to both local authorities and tenants.

Tenant Applications

In addition, a tenant must also be able to demonstrate that the property, which the offence relates to, was let to them at the time of the offence and the landlord committed the offence within 12 months ending with the date on which the application was made. In instances where a landlord has ceased to commit the relevant offence and more than 12 months have passed since the date of the application, the right to make a claim for a RRO may be statute barred.

One key change brought by the Act is that tenants no longer have to wait for a landlord to be convicted of an offence before making an application to the Tribunal.

In relation to properties which are sub-let to tenants or where the property owner enters into a guaranteed rent agreement with another individual or company, a claim may be brought against the head landlord even if they are not the Applicant’s immediate landlord.

This position was confirmed in the case of Goldsbrough v CA Property Management Limited. In this case, the Upper Tribunal held that a tenant could make an application against the head landlord who was also the freehold owner of the property. This is because the Act does not explicitly require the landlord to be a direct landlord of the tenant and as a result, sub-tenants could bring a claim against their direct landlord or any owner of the property. However, in order to bring a successful claim, tenants would have to prove that the owner of the property committed a relevant offence which could be harder to demonstrate.

It is worth noting that rent repayment orders cannot be made against property agents unless they are an Applicant’s landlord.

Further information and commentary from my colleague Robin Stewart on the case of Goldsbrough v CA Property Management Limited can be found here.

Local authority applications

If a local authority becomes aware that a landlord has been convicted of an offence, then it must consider applying for a rent repayment order. In doing so, they must have regard to Government guidance on rent repayment orders which can be found here.

A local authority is also entitled to make an application for a rent repayment order even if the landlord has not been convicted of an offence.

The procedure for a local authority to submit an application to the Tribunal is different from a tenant’s application. Tenants are able to submit an application to the Tribunal so long as they can demonstrate that a landlord committed the relevant offence within 12 months from the date on which the application is made. However, with regards to a local authority, it must first give the landlord a notice of intended proceedings pursuant to Section 42 (1) of the Act. This step is not required by a tenant.

The local authority’s notice must:

• Inform the landlord of the local authority’s proposals to apply for a rent repayment order;
• Give reasons why the application is going to be made;
• State the amount the local authority seeks to recover; and
• Allow the landlord to make representation within a specified period of not less than 28 days.

The notice must be given within 12 months beginning  with the day on which the landlord committed the relevant offence. A local authority cannot apply to the Tribunal until after the 28 day period for making representations has expired and they have considered any representations put forward by a landlord.

While a local authority can make an application to the Tribunal for a rent repayment order, it can also assist and advise a tenant with making an application and represent them in subsequent Tribunal proceedings.

Conclusion

A significant change brought by the Act is that tenants can now apply for an RRO against a landlord even if they have not been convicted of a relevant offence. Tenants are not required to serve a notice of intended proceedings on a landlord before submitting a claim and therefore a landlord may not find out about the tenant’s RRO claim until after the application has been lodged with the Tribunal.  Even if a claim has already been submitted this does not prevent the parties from negotiating a settlement between themselves and we will be exploring this in a future blog.

In the second part of our series on rent repayment orders, we will be discussing the Tribunal’s approach in rent repayment order claims and the factors taken into account by the Tribunal when making a determination.