Case preview: Rakusen v Jepson – Rent Repayment Orders (RROs) and superior landlords in the Court of Appeal
Next month the Court of Appeal will hear an appeal from a landlord in a rent repayment order case, Rakusen v Jepson.
The issue which the Court of Appeal will decide is whether or not tenants can obtain a rent repayment order against a superior landlord.
Some history of the case
The current law is established by two Upper Tribunal decisions:
- Goldsbrough v CA Property Management Limited  UKUT 311 (LC) and
- Rakusen v Jepson  UKUT 298 (LC).
In both cases, the Upper Tribunal found that superior landlords could be the subject of a rent repayment order.
The Housing and Planning Act 2016 specifies that an RRO can be made against ‘a landlord’ without any further definition of landlord. In those two cases, the Upper Tribunal held that the word ‘landlord’ was not limited to the immediate landlord.
The judge in Rakusen, Deputy President of the Lands Chamber Martin Rodger QC, rejected the landlord’s argument that the repayment of rent could only be required from the landlord who was the direct recipient of rent from the tenant making the application :
“As a matter of language there is nothing incongruous in referring to a sum being “repaid” by a person who was not the original payee. The essence of a repayment is that it is a sum paid back to the person who originally made the payment. I do not regard it as indispensable that the person making the repayment should be the same person as received the original payment, or that only two parties should be involved, although both may often be the case.”
As such, the current position is that a tenant may apply for a rent repayment order against a superior landlord.
This interpretation has been welcomed by tenants’ rights campaigners, who note that while the tenant’s direct landlord might not be someone worth suing (such as a limited company with no assets), a superior landlord who owns the property is likely to be a viable target for a claim.
Allowing RROs to be made against superior landlord gives tenants more options and a better chance of actually receiving their rent back.
The Appeal to the Court of Appeal
The landlord’s appeal to the Court of Appeal is due to be heard on either 21 or 22 July 2021. Judgment might be given straight away on the day of the hearing, or there might be a short wait while the court considers the decision further.
The appeal will feature contributions from some characters who will be familiar to readers of the Landlord Law Blog. In addition to hearing from the landlord and tenant’s representatives, the court has agreed to receive written submissions from Safer Renting, an independent tenants’ rights advice and advocacy service, which was co-founded by Landlord Law Blog contributor Ben Reeve-Lewis.
Ben has written a lot, including on this blog, about the problems of ‘rent to rent’ arrangements in the private rented sector, and the difficulties faced by tenants and local authorities when trying to take any sort of legal action against ‘rent to rent’ businesses which are sometimes run through a complex web of limited companies – companies which can simply be dissolved rather than pay any fines or RROs.
Safer Renting are represented by Justin Bates (who acted for the successful landlord in Trecarrell House Ltd v Rouncefield in the Court of Appeal and discussed that case with Tessa in a Legal Cases webinar) and my colleague at Anthony Gold Solicitors, Giles Peaker.
This is a significant case
This is an interesting and important case for housing lawyers – rent repayment orders have never been directly considered by the Court of Appeal before as far as I am aware.
The court’s decision will have important consequences for tenants who want to make applications for RROs, and superior landlords who might prefer not to have to defend one.
Regardless of the outcome in Rakusen v Jepson, landlords should be wary of the ‘rent to rent’ business model. Even where someone is offering to take over a property, pay guaranteed rent, and look after all the management, landlords should be careful to ensure that any property licence which is required has been applied for promptly.
Where landlords do find themselves facing a rent repayment order application, it is important to take early legal advice. There is no ‘duty solicitor’ service provided to landlords in this position, but to meet that need Landlord Law and Anthony Gold Solicitors offer a Rent Repayment Order hotline, which allows landlords to take initial advice in a half-hour phone call for a fixed fee. You can find further details on the Landlord Law website.
This article was written by Robin Stewart, a Senior Associate Solicitor of Anthony Gold Solicitors.