Rent repayment orders by local authorities – consequences of procedural defects
Where a landlord has committed a relevant housing offence (such as controlling or managing an unlicensed HMO) the local housing authority can apply to the First-tier Tribunal (Property Chamber) (“the FTT”) for an order requiring repayment of housing benefit or universal credit paid to the tenant. The authority can only do so if satisfied, beyond reasonable doubt, that the conduct amounted to a “relevant housing offence”.
Before doing so the authority must give the landlord a notice of intended proceedings (the NIP”). Section 42 of the Housing and Planning Act 2016 requires the NIP must:
- inform the landlord that the authority is proposing to apply for a rent repayment order and explain why,
- state the amount sought, and
- invite the landlord to make representations within a period specified in the notice of not less than 28 days (“the notice period”).
The authority must consider any representations made during the notice period.
This Bulletin focuses upon the consequences of a defective NIP in the light of the Upper Tribunal decision in Younis v Waltham Forest LBC  UKUT 0362 (NIP to be served upon a landlord before an authority imposes a civil penalty for a specified housing offence). The Upper Tribunal held
“The purpose of setting out the authority’s reasons is so that the recipient of the notice of intent can respond to it with representations, which must then be taken into account by the authority. The notice must therefore provide a sufficient account of the authority’s reasons for proposing a financial penalty to enable the recipient to understand what conduct or omission is being said to amount to the offence which has been identified.”
In Younis it was argued the NIP did not set out the authority’s case in sufficient detail. The Deputy President held that the correct approach to defects in the NIP was that in R v Home Sec., Ex p Jeyeanthan  1 WLR 354 where Lord Woolf MR held:
“The questions which are likely to arise are as follows:
- Is the statutory requirement fulfilled if there has been substantial compliance with the requirement and, if so, has there been substantial compliance in the case in issue even though there has not been strict compliance? (The substantial compliance question.)
- Is the non-compliance capable of being waived, and if so, has it, or can it and should it be waived in this particular case? (The discretionary question.) I treat the grant of an extension of time for compliance as a waiver.
- If it is not capable of being waived or is not waived then what is the consequence of the non-compliance? (The consequences question.)”
This approach was refined in R v Soneji  1 AC 340. There Lord Steyn adopted what is now a conventional approach to the problem of a defect in a notice or procedure:
“….That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.”
The Upper Tribunal in Younis appear to have adopted the “substantial compliance” heresy to defects in the NIP. The Soneji principles are subject to due for review in the Supreme Court in 2020. Local authorities would be well advised to give as much detail as is reasonably available when drafting and serving an NIP prior to seeking a rent repayment order. Defects in the NIP may yet be the subject of challenge.
For more details please contact Howard Lederman (HowardL@42br.com).
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