The case of Jupet, Dupau & Maschka V Jonathan Krogdahl & Nicky Krogdahl was recently heard in the First-tier Tribunal and was in regard to a rent repayment order. The dispute related to a tenancy of an unlicensed House in Multiple Occupation (HMO) for 12 months, compounded by “maliciously vindictive” conduct by the landlords.

The tribunal was asked to consider whether conduct after the end of the tenancy and during the tribunal proceedings could be considered as conduct of the landlord for the purposes of the rent repayment order. It was held that they could.

The facts

The property was owned by a company, however the tenancy agreements named the directors of the company (who were also shareholders) as landlords. Rent was however paid into the company’s bank account, but the directors/shareholders served notices, and corresponded with tenants using personal details.

The property should have been licenced from August 2021 under the councils additional licensing scheme. Despite this, a licence was not obtained until May 2023. The tenants vacated in October 2023.

For this reason, the tenants applied for a rent repayment order (“RRO”) in the sum of £36,489 against the directors/shareholders in their personal capacities.

The issues

The directors/shareholders tried to argue that they were not the landlords as this was in fact the company.

There was no dispute that the property was unlicenced when it should have been licensed. A rent repayment order was made but the issue was how much, at which point the landlords conduct was considered.

The Tribunal discovered that during the tenancy there was a pattern of intimidation by the directors/shareholders, which included:

  • Serving the tenants a Section 21 notice after discovering the property should be licenced.
  • Sending threatening and intimidating emails in regards to the above situation being ‘tricky to navigate for both parties’.
  • Threats to employment: Threatening to contact tenants’ managers to gather “character references” from employers to support eviction proceedings.
  • Unfounded criminal allegations: Accusations of fraud and blackmail were made, including a police report and a bank complaint that disrupted one tenant’s finances.
  • Retaliatory invoices: After the RRO application, Mr Krogdahl issued invoices totalling £28,303.87, including a fabricated “Contract Breach Penalty Fee”.
  • Attempts to interfere with future housing: Tracked down the tenants’ new landlord and implied the tenants had forged a reference from them.
  • Refused to refund to the tenants an accidental overpayment in rent of £830.62 which they had asked to be repaid, saying it might be viewed as gratitude for being fantastic landlords.

The following behaviour was displayed after the tenancy:

  • An invoice in the name of the company was sent totalling £10,620.90 which allegedly was owed for a defective installation of a light switch in the property. County Court proceedings were issued.
  • Demanded the RRO be dropped as the decision was unjust and they wished to share it with the media and establish a ‘rogue tenant register’.
  • Unjustifiably alleged fraud and blackmail in their witness statements in the RRO proceedings.
  • Told the tenants and tribunal that they had moved to Australia with no forwarding address and deleted the email addresses previously used to correspond with the tenants in an attempt to avoid proper service of the application, and then accused the tenants of not serving the application correctly.

The decision

The tribunal found that as the directors/shareholders were named on the tenancy agreement, and they could have received the rent as disbursements from the company, they had control of and managed the Property.

The tribunal found that the allegations made by the directors/shareholders towards the tenants were false, and that it would offend any sense of justice if they did not take into account the appalling behaviour of the landlords.

The RRO would have been for 50% of the rent due in the unlicensed period for a standard failure to licence. In light of the landlords conduct, this was increased to 70%.

Following the RRO, the landlords wrote to the Tribunal to ask it to order the tenants to pay the awards to shelter, which the Tribunal has no jurisdiction to do so.

Comments

This case makes it clear that behaviour of the landlord during and after the tenancy could be taken into consideration by the tribunals when deciding on the sum of a rent repayment order. It also shows a willingness to hold individuals liable if they are named on the AST, despite the fact the property is owned by a company.

In relation to licensing, the most suitable approach remains to check with the property’s local council and seek their guidance as to whether a HMO, selective or additional licence is required in each instance. Liability is not extinguished where a licence has been obtained after the fact.

If you would like assistance with licensing or rent repayment orders, please do not hesitate to contact a member of our Residential Possession Team.