Rent Repayment Order Magic Money Tree is pretty much dead!

Rent Repayment Order Magic Money Tree is pretty much dead!

9:11 AM, 10th August 2020, About A year ago 67

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“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

by Frederick Morrow-Ahmed

16:15 PM, 15th August 2020, About A year ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 14/08/2020 - 11:16
Hello Des,

Thank you for your very sober, thoughtful, and measured riposte to my perhaps somewhat ott initial comment. Also to my subsequent musings.

There is a lot that could be said but I will desist as I have ranted enough already.

Yes, I guess we all hark back to the ‘good old days’ and see our younger years with rose tinted glasses.

You have earned my respect, as I am sure you have of others on this website.

Regards and best wishes
Frederick

by Smithy @hotmail

20:38 PM, 15th August 2020, About A year ago

Reply to the comment left by Mick Roberts at 14/08/2020 - 10:06
Just out of curiosity Mick - what on earth did you do with all those unfortunate animals?

by Mick Roberts

5:26 AM, 16th August 2020, About A year ago

Reply to the comment left by Smithy @hotmail at 15/08/2020 - 20:38
He took the animals.
She left the rabbits out in 30 degrees heat under blanket I didn't see till worker said there's rabbits outside. I texted her, she did then move 'em.
And the Govt want to pay these people direct & Councils want to give them Rent Repayment Orders.

by Des Taylor Landlords Defence Ltd

16:00 PM, 16th August 2020, About A year ago

Reply to the comment left by David at 11/08/2020 - 13:22
Hello David,

It is sad that things go the way they do sometimes and all things change as more people do them and legislation comes in.

The local councils do what they do and whether it works, is right or wrong, it is there and we must abide by it. The landlord here was naïve and that was stated. The property business is a fully fledged business that can now be done properly by those experienced and knowledgeable to do so.

No law ever stopped the determined do what they wanted, be that the tenant or the landlord. In this case the tenant was clearly never intending to pay the rent and when challenged found the landlady’s error and was able to ensure punishment.

Luckily GAAP prevailed and the moneys were applied correctly. The foolish lawyer has lost too.

The tenant will be pursued for a debt that could so easily have been negotiated, now it is a matter of public fact and one for benefit fraud officers to also investigate the tenant’s income and benefits claims to ensue only that which the tenant was entitled has been claimed paid.

Lessons for everyone.

Des Taylor
Landlords Defence Limited

by Des Taylor Landlords Defence Ltd

16:11 PM, 16th August 2020, About A year ago

Reply to the comment left by Mick Roberts at 14/08/2020 - 10:06
Hello Mick,

Interesting pictures. It is important to be inspecting properties every three month now and HMOs every month.

Anything different and you cannot know what is going on in the property and defend yourself.

Good tenants understand, bad ones, you know early on and know what to do next.

The tenant is a bigger voting pool than the landlord voting pool, so things that win votes are generally Tenant Biased.

When I rent a car, I expect it to be safe etc. and if I smash it up, I expect to pay the excess or insure against it. The renal system needs to accommodate the same and the legislation needs to be amended to deal with that.

Malicious tenants are everywhere and their criminal damage continues often unchallenged.

To that end, we will eventually lobby enough for a system that criminalises tenants who cause damage and will not or cannot pay for their acts.

Until that day, we must fight on.

You need to have representation as good as the tenants does from the likes of Shelter and Citizens Advice Bureaux. Don’t skimp on law and knowing it.

Des Taylor
Landlords Defence Limited

by Des Taylor Landlords Defence Ltd

16:18 PM, 16th August 2020, About A year ago

Reply to the comment left by Mick Roberts at 16/08/2020 - 05:26
Hello Mick,

The payment of rent money to a tenant without financial education, discipline and understanding is the most foolish of decisions made.

The payment directly to the landlord is a sure way of sustained housing for such tenants and more protest needs to be made about this.

A tenant given money to pay rent and using for anything else is a thief. There is no other word for it.

Yet, little does it ever get heard that they are prosecuted.

It is unacceptable and in difficult times the tenants will choose between the landlord and the family needs. Then the thief comes into play.

I don’t have the answers, what I do know is the government can fix it, they could fix it and they don’t for reasons that suit it, not the landlord.

One day, a prime minister will appoint individuals who have staff who understand the reality an will make laws that serve the people who pay the most taxes and those who need the most help rather than just the latter.

My life may be too short to see that.

Until then we win one case at a time against these rogue tenants.

Here to help.

Des Taylor
Landlords Defence Limited.

by Des Taylor Landlords Defence Ltd

16:23 PM, 16th August 2020, About A year ago

Reply to the comment left by Mick Roberts at 14/08/2020 - 16:12
Hello Mick,

Read your licences and the mandatory and the property specific conditions.

Only agree to those property specific conditions which you can comply with.

Do not agree to anything that is beyond your direct control or anything that forces you to make the tenant do anything, to which they could refuse.

There is some personal nonsense comes out from licensing officers and you are entitled to reject and represent. Of course, you have to represent on points of law and fair and reasonableness.

I do hope your licences suit and are fit for purpose.

If not do let me know and we can fix the council if there is any nonsense.

Thanks.

Des Taylor
Casework Director
Landlords Defence Limited
http://www.landlordsdefence.co.uk/book

by Des Taylor Landlords Defence Ltd

16:27 PM, 16th August 2020, About A year ago

Reply to the comment left by Mick Roberts at 14/08/2020 - 16:20Hello Mick,
Yes, you will find they play games which they are doing with their tax payers money to satisfy their personal agendas and whims.
Do not try to fight on your own, they will tie you up in knots and make you say incriminating things that you may regret.
It is important to keep records of everything.
If the council calls or writes to you, get in touch.
Thanks.
Des Taylor
Casework Director
Landlords Defence Limited
http://www.landlordsdefence.co.uk/book
0208 088 0788

by Monty Bodkin

22:13 PM, 16th August 2020, About A year ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 16/08/2020 - 16:11"It is important to be inspecting properties every three month"
Bullshit.
Says who?
3 monthly inspections are totally unnecessary for the vast majority of private tenancies.

by Giles Peaker

22:32 PM, 16th August 2020, About A year ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 14/08/2020 - 11:25
Hi Des

I don't think you have thought through the implications of this decision. I've written it up at https://nearlylegal.co.uk/2020/08/rent-arrears-and-rros/

If the tenant's conduct after the landlord's offence and the relevant period of the claim can be taken into account, so can the landlord's. So, if this was a precedent (which it isn't), you have just opened the flood gates for tenants to raise their landlord's bad behaviour in the period after that which they are claiming for to be taken into consideration in the amount of an RRO.

The pre-existing arrears and accounting set off point is, I think, probably right, unless the payments were specifically hypothecated by the tenant. But the 'post period conduct' point can certainly cut both ways and you may have opened up a serious can of worms for some landlords.


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