Rent Repayment Order Magic Money Tree is pretty much dead!

by Des Taylor & Phil Turtle, Landlord Licensing & Defence

9:11 AM, 10th August 2020
About 7 months ago

Rent Repayment Order Magic Money Tree is pretty much dead!

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Rent Repayment Order Magic Money Tree is pretty much dead!

“Rent Arrears must be accounted for BEFORE rent is eligible to be reclaimed under a Rent Repayment Order (RRO).”

At a stroke, this Judgement of the First-Tier Tribunal (in a case defended by Des Taylor of Landlord Licensing and Defence) means that the no-win/no-fee become almost worthless for the lawyers, and far fewer Rent Repayment Orders (RRO) will be brought against landlords in the future. Click here to download the full judgement

The Hastings law firm of Holden & Co LLP representing the rogue tenant would have expected 30-50% of the £7,184 amount. Let’s say £2,200 to £3,600.

After Des Taylor’s defence of the landlord against this malicious claim, the Tribunal made just a token RRO award, and so the no-win/why-bother lawyers stand to make just £250 to £420.  In context, that’s 1-2 hours fee for 2-3 days’ work. Not exactly good business!

Thanks to Des Taylor’s ground-breaking win at the First-Tier Tribunal (Housing) the Rent Repayment Order Magic Money Tree so loved by Rogue Tenants is pretty much dead!

Des Taylor a director of Landlord Licensing & Defence, was able to persuade the Tribunal that the tenant making the no-win/no-fee Rent Repayment Order claim was a serial non-payer of rent, and had illegally taken in multiple lodgers whilst sometimes claiming universal credit.

Said Des Taylor, “It is ridiculous that a rogue tenant can attempt to claim over £7,000 in rent repayment order fees which the landlord will be directed to pay to the tenant in cash when the tenant owes the landlord £16,000 in unpaid rent.”

The victory for landlords came in two decisions by the Tribunal

Arrears First

Until this judgement, tenants and lawyers have been able to pick almost any period they like where the tenant paid the maximum amount as the “Relevant Period’ for the claim, and that’s exactly what this tenant did. There was only one period of 7 months when she’d actually paid any significant rent, so that of course was the period her lawyers picked and £7184 was the amount she was attempting to claim for rent repayment.

At the start of this maliciously chosen ‘Relevant Period’ however, the tenant was already £3,132.95 in arrears.

Stating that standard accounting practice must be applied to Rent Arrears, the Judge said in her findings: “The Tribunal is satisfied that it would be standard accounting practice for any landlady/landlord or council/housing association to apply any payments made during the Relevant Period firstly to any arrears that had accrued prior to the date of payment”

This decision that monies received must first go to arrears before counting as “Rent Paid’ for the purposes of a Rent Repayment order meant the Judge slashed the maximum RRO claimable from over £7,000 to just £4201.09.

But that was not all…

Rogue tenant behaviour

Although obviously a Judge cannot use words such as Rogue tenants, it was noteworthy and unusual that she reported in her findings “Mr Taylor submitted it was clear that the account showed the Applicant (tenant) was a person who constantly was in arrears (which had risen from £4,700 to over £13,000), that she was a ‘rogue tenant’ who failed to pay the rent, and then took advantage of the Respondent’s (landlord) ignorance of the licencing requirements.

“He (Taylor) submitted the Applicant had specifically chosen as the Relevant Period a time when rent was being paid, but she was in arrears at the start of that period, and for more than a year from July 2019 had paid no rent at all. He said the Respondent should not be doubly punished by being ordered to repay rent, when the Applicant had not been paying any rent for a substantial period.”

Summing up the Judge said “The Tribunal finds the Applicant’s failure to pay any rent since July 2019 to be a deliberate, persistent and very substantial breach of the terms of the tenancy agreement following the souring of relations between the parties in July 2019. This default has resulted in the rent arrears increasing very significantly.

“The Tribunal finds that as at the date of the hearing of this application, Mrs Awad owed the Respondent a total of £15,538.32 for the six-bedroom property she occupies with her family. She appears to have taken no proper steps to seek advice, to maximise her income or reduce her indebtedness and to have taken advantage of the Respondent’s inexperience. The Tribunal has given this very significant weight when considering the Applicant’s conduct.”

The Tribunal then decided that based on what Taylor had described as Rogue Tenant behaviour they would cut the already significantly reduced Rent Repayment claim by a further 75%.

The Judge said “This is to reflect the Applicant’s (tenant) continued persistent, deliberate and very significant breach of the terms of the tenancy as regards payment of rent and her obstructive behaviour in preventing the Respondent (landlord) from carrying out inspections.

And so the final figure awarded against the Landlord was £849.18 and that not because she deserves it in any way, owing as she does over £16,000 in unpaid rent, but because the legislation says that Rent Repayment Orders are intended to penalise landlords for failing to license property and a few other crimes.

The Landmark Justice for Landlords Decision

Commenting on the judgement, Des Taylor explained, “This judgement has given us two fantastic decisions with which to fight malicious and speculative no-win/no-fee Rent Repayment Order claims.

1) A majority of ‘money grabbing’ claims are brought by tenants in arrears. We now know that with a correctly structures defence we can get the arrears taken off the claim. In many cases this makes the case no-chance-of-fee for the ambulance-chasing solicitors.

2) We also have the highest ever ‘discount’ applied because of the tenant being ‘rogue’.

Click here to download the full judgement (you should!)

Fair Justice

It has to be recorded that the Landlord was, of course, guilty of the crime of not having a licence or the tenant would not have been able to instigate the RRO claim.

Her ignorance of the requirement to licence was, of course, no defence, though through the approach Taylor took in defending her enabled the Judge to agree that this was due to inexperience, was not deliberate and that, responsibly, she had immediately applied for a licence upon realising she needed to have one. Instead of the over £7,000 RRO claim, her punishment, which we agree more fairly fits the crime, is just £849.18, in other words, our defence assisted her to get the fine reduced by 88%.

We now move forward to assist the landlord to successfully evict the tenant and recover the £16,000 arrears.

Final Score

Decent Landlords: 1 Rogue Tenants: Nil

Landlord Licensing and Defence: Helping Landlords get out of trouble when they get into it.

Councils and Tenants are ruthless and unforgiving and will destroy your business in one inspection.

LANDLORD LICENSING AND DEFENCE fights your corner like no other.

Civil Penalties and Rent Repayment Orders are severe and business breaking for most. We cut to the chase and get things sorted.

Anyone can get it wrong; we reduce the chances of it breaking you, psychologically, financially and physically.

Get in touch, with us when the Council or the Tribunal gets in touch with you.

Telephone 0208 088 0788 or http://www.landlordsdefence.co.uk/book  for an initial assessment

Comments

Monty Bodkin

11:21 AM, 14th August 2020
About 7 months ago

Reply to the comment left by Mick Roberts at 14/08/2020 - 10:06
Why are you letting out your properties with 10 foot aquariums Mick?
That's taking fully furnished to a new level!

Des Taylor Landlords Defence Ltd

11:25 AM, 14th August 2020
About 7 months ago

Reply to the comment left by Giles Peaker at 10/08/2020 - 23:35
Hello Giles,

Thanks very much for commenting.

Yes, I agree our Housing Act 2004 is hardly new, really fully grown and of course still fraught with differing opinions and understanding by the authorities and landlords and disagreement ensuing. Rent Repayment Orders are hardly new either, it is just the way things were changed by the Housing and Planning Act 2016 (which is now more than a toddler) that we see what we see.

Of course, we all have opinions and thanks for standing up and I do believe Frederick has addressed this later in the week.

This is turning into as a thread of interest and comment and I encourage others to read fully and understand Rent Repayment Orders fully.

Giles Peaker you are a well-established authority in Housing Act Matters and I read your works with great interest.

Thanks again for commenting.

Des Taylor
Casework Director
Landlords Defence Limited
0208 088 0788
https://www.landlordsdefence.co.uk/book/

Des Taylor Landlords Defence Ltd

11:30 AM, 14th August 2020
About 7 months ago

Reply to the comment left by Mick Roberts at 11/08/2020 - 12:34
Hello Mike,

Thanks for your reading and comments.

The outcome was fantastic for the landlady, who will now consider her options and secure the debt.

Possession after that and a new future as a family home again for one her family.

Whatever the punishment, the best is the application using the Generally Accepted Accounting Practices, that was key in assisting the reduction of the claim.

Then the conduct of the tenant was what made the award more palatable.

Victory for landlords and strong message to tenants.

Thanks again, here to help

Des Taylor
Casework Director
Landlords Defence Limited
https://www.landlordsdefence.co.uk/book/ 0208 088 0788

Des Taylor Landlords Defence Ltd

11:38 AM, 14th August 2020
About 7 months ago

Reply to the comment left by Frederick Morrow-Ahmed at 11/08/2020 - 12:38
Hello Frederick,

Thanks for sharing and yes, there are always stories of the good old days and how they were.

Then like now there were more benefits and more risks.

Less people, less traceability, less procedures and less papers.

As things evolve, we will always have to do more.

Driving has evolved too and more drivers more laws, no more 20 mins test and off you go.

Many recall a rogue non-paying tenant did a moonlight flit. To some this was better, to others it was terrible.

Thanks for commenting back and also for making things clear with Giles Peaker.

Whatever we think, a judgement has been made which turned out well for the landlord and landlords alike.

Thanks for taking the time to read and comment and debate with others.

Des Taylor
Casework Director
Landlords Defence Limited
https://www.landlordsdefence.co.uk/book/ 0208 088 0788

Mick Roberts

16:12 PM, 14th August 2020
About 7 months ago

Reply to the comment left by David at 14/08/2020 - 11:19
Yes I should have probably said Nottingham where we have Draconian Licensing. I'm starting to receive my Licenses this morning 2 TWO years after applying for them & gonna' take me about 2 hours to save them all. That's without their recommendations of reading them all, 3 attachments in each one, 20 pages of text for each house.
And also in Nottingham we have Universal Credit, which when added to Licensing & all the other new rules/regs, makes a recipe for disaster for HB UC DWP Benefit tenants-In Nottingham & similar areas.

Yes I did think in Nottingham tenants could now move or at least apply more for houses with no fees, but again the HB Benefit tenants which is my area, are now getting wise they getting rejected & are starting to learn it's cause they on UC. Shelter will no doubt try & find an answer for that one.

Mick Roberts

16:16 PM, 14th August 2020
About 7 months ago

Reply to the comment left by Monty Bodkin at 14/08/2020 - 11:21
Ha ha yes, I've just added to the same album the photos of the rats & snakes & that in 2016 in the SAME room.
https://photos.app.goo.gl/F4wPEF9Xyh3iV1FJ8

Mick Roberts

16:20 PM, 14th August 2020
About 7 months ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 14/08/2020 - 11:30I think I will be using u soon Des, as I know Nottingham (Well more the Councillor's) would love to come after me for any little misdemeanour. Fortunately (at the moment) I have 99% of my current tenants on my side. Only last week, Licensing are sending overcrowding letters to my tenants, who are writing back to Licensing and asking what they playing at & telling
Licensing they are responsible for extortionate rents & no one being able to move any more.

David

21:58 PM, 14th August 2020
About 7 months ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 14/08/2020 - 10:47
Hi Des,
No criticism of your action , well done, my complaint was with the whole legal system as applied to private landlords.
a) The FTT cannot in RRO cases address arrear, well it should but just wishes to make it as difficult as possible for the landlord.
b)The tenant should not have received 1 penny let alone 12%, she was in arrears but common sense and fair play does not enter here. No justice.
c)The landlord was not prosecuted but I thought some reference was made about her being a criminal and in the eyes of the council they believe that. She was not only "naïve" but totally unaware she had to register.
d)I do hope HMRC and the council will catch up with this scoundrel of a tenant.
e)RRO may have there place if only the same balance applied to badly behaved tenants. Now who would have imagined certain lawyers would find yet another way to shaft the public and heaven forbid councils being underhand so they can issue fines.
f)I believe we have more laws in the UK than anywhere else in Europe and the Housing Act 2004 was just another way for the government to reduce payments to councils by offering them another way of collecting money from the public.The councils are fully aware who need to register so why not do the decent thing and inform them.

Malcolm Ratcliffe

13:26 PM, 15th August 2020
About 6 months ago

Not read this in detail, but I saw the bit about no-win, no fee not being worth while as the £250 - 400 Fees would only cover 1 to 2 hours of the legal charges. These might be the charges, but they do seem totally OTT, on a per hour basis.

Frederick Morrow-Ahmed

15:40 PM, 15th August 2020
About 6 months ago

Reply to the comment left by David at 14/08/2020 - 21:58
Brilliantly put!

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