COURTS: Landlord wins ‘important’ appeal in rent to rent case

Landlord Amlendu Kumar has successfully appealed against a Rent Repayment Order for his Tooting property after a ‘rent to rent’ company he contracted with turned into an illegal HMO without his knowledge.

Kumar had originally let his Tooting property to guarantee rent company, Like Minded Living Ltd (LML), who then re-let it. Despite a clause stipulating LML could not allow more than three individual tenants to live in the property, five moved in, turning the property into an illegal HMO.

The original case against Kumar was brought by three of the tenants and was heard in the First Tribunal.

Landmark case

Since a landmark case in 2023 only the landlord who receives the rental payments, the immediate landlord, rather than the owner, the superior landlord, would have a rent repayment order made against them. In this case that was LML.

Because the tenants continued to pay LML even after the contract with Kumar had come to an end, the courts deemed that Kumar had unwittingly become the immediate landlord and he rather than LML was hit with a Rent Repayment Order for 60% of the annual rent (£7,549.25).

Kumar then appealed his case and in what leading property lawyer, David Smith, is calling  “an important new Upper Tribunal decision,” his appeal against the original judgement was upheld, the UT ruling the landlord was not liable for the RRO because he had not actually received any money from the tenants.

The Tribunal explained that although it was a technical breach of the law, the intention of all parties was clear. It then added that Kumar had a reasonable excuse for unknowingly having control of an unlicensed HMO as he had no reason to doubt LML who had been recommended to him by Chestertons.

Like Minded Living Ltd appears to have been liquidated in 2023, Companies House records show.

Read the Tribunal decision in full.

Read more about similar cases.