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 10 months 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 Monty Bodkin

20:56 PM, 19th August 2020, About 10 months ago

Reply to the comment left by Rob Crawford at 19/08/2020 - 13:35
It is not a cast iron precedent but it's pretty damn good.
It would take an ambulance chaser with very big balls to go up against it.

by Des Taylor Landlords Defence Ltd

14:09 PM, 16th March 2021, About 3 months ago

Hello everyone,

Here is the update and I am pleased to say on 9th March 2021 that the Upper Tribunal Lands Chamber passed down the decision that the Appeal Fails.

This is excellent news and a decision that was correctly made.

Interestingly, it sets a precedent as I understand.

As Judge Elizabeth Cooke agreed with me:

"It would offend any sense of justice for a tenant to be persistent in rent arrears over an extended period and then to choose the one period where the tenant did make some regular payments - albeit never clearing the arrears - and then be awarded repayment of all or most of what the tenant paid in the period."

Yes, we will be publishing more on this and of course, tenants must be stopped from this terrible practice of trying to destroying landlords just because they can.

Mrs Hooley's only income was from that property.

Thanskfully, the amount agreed in the FTT will be deducted (offset) from the tenant's arrears in the money claim at the County Court.

The amount of arrears is also incontestible as it was agreed in the original hearing.

Another great day in the Upper Tribunal as the Judges se the landlord's view objectively.

by Monty Bodkin

18:22 PM, 16th March 2021, About 3 months ago

Reply to the comment left by Des Taylor Landlords Defence Ltd at 16/03/2021 - 14:09
Excellent news Des!
Activist anti landlord housing lawyers wont be happy with this fair and binding decision;

https://www.bailii.org/uk/cases/UKUT/LC/2021/55.html

by Des Taylor & Phil Turtle, Landlord Licensing & Defence

14:20 PM, 17th March 2021, About 3 months ago

Upper Tribunal Appeal FAILED Judge confirms the original FTT decisions STANDS. Rogue Tenant behaviour taken into account and Rent Arrears come off BEFORE rent can be counted for Rent Repayment Order https://www.property118.com/upper-tribunal-decision-underlines-end-of-magic-money-tree-for-rogue-tenants/

by Des Taylor Landlords Defence Ltd

14:34 PM, 17th March 2021, About 3 months ago

Reply to the comment left by Monty Bodkin at 16/03/2021 - 18:22
Hello Monty,

Yes, you are right, activist anti-landlord housing lawyers won't be happy, they weren't happy when the First-tier Tribunal passed down its decision.

Although it was precedent but not a legal precedent, now it is something that will be referred to over and over.

Those firms keep banging on about quantum. They love a Latin word!!

More and more winds. Vadamalayan has not won through.

You can't have the starting point of an award at the maximum as has now been ruled.

Fighting for landlords to stop these nasty tenants and councils from destroying the providers of housing in the PRS both mentally and financially.

This corrupt-like hypocrisy must be stopped. Where will all the homeless go?

Here to get it done.

Des Taylor
Casework Director
Landlords Defence Limited

by Des Taylor & Phil Turtle, Landlord Licensing & Defence

18:42 PM, 22nd March 2021, About 3 months ago

Reply to the comment left by Giles Peaker at 11/08/2020 - 19:26
Good, then, that the Upper Tribunal threw out the appeal and confirmed the FTT decision that arrears should be accounted for first in judging the rent on which RRO should be awarded. https://nearlylegal.co.uk/2021/03/arrears-conduct-and-tribunal-discretion-on-rro-awards/

by Des Taylor Landlords Defence Ltd

18:48 PM, 22nd March 2021, About 3 months ago

Reply to the comment left by Monty Bodkin at 16/03/2021 - 18:22
Hello Monty,

No, you are so right.

Yes, a great win for landlords.

Need to stop these tenants who want to take occupational and not pay for it. Restaurants don't stand for it, yet landlords, seem to be expected to stand for it.

Fantastic that the Upper Tribunal saw sense.

Des Taylor.

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