Background
The respondents, Klimas Jurevicius and Emily Arno, purchased a four-bedroom shared house at 31 Rope Street, London SE16 in November 2022 and lived there as resident landlords. The property fell within an additional licensing area designated by the London Borough of Southwark, meaning that occupation by three or more persons in two or more households required a house in multiple occupation (HMO) licence. The appellant, Guillaume Guinard, had been living in the house before the purchase. On 1 December 2022 the second respondent entered into a written Lodger Agreement with the appellant at £775 per calendar month, creating a fourth occupier and triggering the licensing requirement. The respondents acknowledged that they were aware of the licensing rules throughout.
The respondents claimed they had always wanted the appellant to leave, that he had behaved manipulatively, and that they relied on his repeated promises to vacate rather than applying for a licence. They served notice on him in November 2023; he did not leave until March 2024. In February 2025 the appellant and a fellow lodger applied to the First-tier Tribunal (Property Chamber) for rent repayment orders under the Housing and Planning Act 2016, covering twelve months of rent (1 March 2023 – 29 February 2024), totalling £9,300 for the appellant.
The FTT found that a prima facie offence under section 72(1) of the Housing Act 2004 had been committed but accepted the respondents’ defence of “reasonable excuse,” declining to make any repayment order. It added that, had it been required to assess quantum, it would have awarded only a nominal £1 given the appellant’s conduct. The appellant appealed to the Upper Tribunal on three grounds, with Ms Sorlie (the co-applicant) not joining the appeal.
The Court’s Holding
Upper Tribunal Judge Elizabeth Cooke allowed the appeal on all three grounds. On grounds 1 and 2, the judge held that the FTT’s findings in support of the reasonable excuse defence were made contrary to the evidence and were irrational. The respondents had consistently stated in their own witness evidence that they understood the HMO licensing requirements and were not confused by them; the FTT’s contrary finding that Southwark Council’s website had caused confusion was unsupported. More fundamentally, nothing in the facts found by the FTT indicated that the appellant’s conduct had prevented the respondents from applying for a licence. Their own case before the FTT was not that the appellant blocked them from applying, but that they preferred to seek his departure as a cheaper alternative — a position fatally undermined by the second respondent’s choice to execute a written licence agreement and accept rent, thereby actively legitimising his occupation.
On ground 3, the judge held that the FTT’s indication that it would have made only a £1 award was either unexplained or irrational, because it elevated the tenant’s conduct over all other statutory considerations under section 44 of the Housing and Planning Act 2016 without any analysis, and overlooked the respondents’ own responsibility for the unlicensed state of the property. With the parties’ consent, the Upper Tribunal substituted its own decision on quantum rather than remitting to the FTT.
The Tribunal calculated the repayment by deducting utilities (£115 per month) from the £9,300 total, arriving at £7,920. Taking 50% as a starting point for an unlicensed HMO offence (regarded as among the less serious in the statutory list), the judge then reduced the award to 25% to reflect two factors: the appellant’s manipulative conduct in prolonging his occupation and the unusual personal pressure faced by the respondents as resident landlords sharing a home with a conflicted occupier. The resulting rent repayment order was £1,980.
Key Takeaways
- A landlord’s “reasonable excuse” for operating an unlicensed HMO must be grounded in facts that actually explain the failure to obtain a licence; a general account of difficult tenant behaviour is insufficient where nothing prevented the landlord from applying.
- Entering into a formal written licence agreement and accepting rent is inconsistent with a claim of unwilling or inadvertent landlordship, and undermines any argument that the tenant’s conduct caused the licensing breach.
- An FTT cannot reduce a rent repayment award to a nominal £1 based solely on tenant misconduct without engaging with all the factors prescribed by section 44 of the Housing and Planning Act 2016, including the landlord’s own conduct and the purposes of the statutory scheme.
- When quantifying a rent repayment order, utilities included in the rent should be deducted before applying a percentage reduction; the resident-landlord context is a legitimate mitigating factor but does not override the landlord’s statutory obligations.
Why It Matters
This decision clarifies the threshold for the “reasonable excuse” defence under section 72(5) of the Housing Act 2004 in rent repayment order proceedings. It confirms that difficulties with a tenant — however genuine and stressful — do not amount to a reasonable excuse for failing to licence an HMO unless those difficulties can be shown to have actually caused or prevented the landlord from complying. Resident landlords in additional-licensing areas who formalise occupancy arrangements in writing must ensure they obtain the requisite licence; the personal discomfort of shared living will not substitute for statutory compliance.
The decision also reinforces that tribunals must apply the structured Acheampong framework when assessing quantum and must weigh all section 44 factors rather than treating a tenant’s wrongdoing as a trump card justifying a purely nominal award. For legal practitioners, it is a reminder that landlord credibility alone — even where the landlord is found to be a sympathetic and truthful witness — cannot cure a legal conclusion that rests on factual findings unsupported by the evidence.